Approximately three months into the unprecedented pandemic that drastically altered the way of life worldwide, states cautiously began lifting stay-at-home orders. California, one of the states hit hardest by the COVID-19 pandemic, was among these states. The gradual reopening of California’s economy was cut short as a spike in COVID-19 cases in early July 2020 resulted in Governor Gavin Newsom ordering that certain businesses with indoor operations, such as restaurants and movie theaters, cease indoor operations “which promote the mixing of populations beyond households and make adherence to physical distancing and wearing face coverings difficult.[i]” Indeed, the risk of contracting the virus is undoubtedly at the forefront of the minds of both employers and employees as they return to their places of employment. This article explores some of the issues posed by COVID-19 in the context of recent changes to California’s workers’ compensation laws and the impact of these changes on employers, as well as issues concerning employers’ potential exposure to litigation for COVID-19 related claims.

1. A Brief Overview of the California Workers’ Compensation Act

California’s workers’ compensation laws are codified in Labor Code §§ 3200-6200, referred to as the Workers’ Compensation Act. The primary purpose of California’s workers’ compensation statutes is to insure that an injured employee and his or her dependents have adequate means of sustenance while the employee is unable to work[ii]. The laws also promote the employee’s prompt recovery so that he or she can return to the workforce[iii]. Accordingly, the burden of caring for the injured worker and his or her dependents is shifted from society to industry, which assumes the responsibility as a cost of doing business[iv]. The provisions of the Workers’ Compensation Act must be liberally construed in the employee’s favor, and all reasonable doubts as to whether an injury arose out of employment are to be resolved in favor of awarding the injured employee compensation[v].

In order to be eligible for workers’ compensation benefits under California law, two conditions must be present: (1) an employer-employee relationship[vi] and (2) an injury suffered by an employee that arises out of and in the course of the employment relationship[vii].

California defines an employee as every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed[viii]. Any person rendering service for another is presumed to be an employee[ix]. Independent contractors, defined as any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished[x], are specifically exempted from this presumption[xi].

For an injury to arise out of the employment, it must occur by reason of a condition incident to the employment[xii]. That is, the employment and the injury
Continue Reading Legal Issues Posed by Sweeping Changes to the California Workers’ Compensation Act by Executive Order N-62-20: A Primer for Employers

As of July 20, 2020, the Centers for Disease Control and Prevention reported more than 3.7 million COVID-19 cases, resulting in more than 140,000 deaths.  The virus is primarily transmitted person-to-person by droplets, aerosols and fomites. Nursing homes, rehabilitation and long-term care centers and facilities caring for people with psychiatric disabilities assist persons of a wide range of ages, but the majority of residents are elderly. Individuals that require the services of these facilities are particularly vulnerable to respiratory pathogens such as the influenza virus and present environments conducive to infections which can be introduced into these facilities by staff, visitors and new residents with devastating consequences.

Nursing home residents account for nearly one in ten of all COVID-19 cases in the United States and more than a quarter of the deaths.[1]  Data shows that nursing homes have been overwhelmed by the effects of the virus. Nursing homes hold large populations of elderly residents many of whom have compromised immune systems due to pre-exiting medical conditions and age. Given the typical living arrangements which place patients and residents within close proximity to one another and caregivers supporting numerous individuals in the same facility, nursing homes and long-term care facilities present substantial opportunities for the spreading of infections. Nursing homes frequently provide a community-based atmosphere, consisting of “family” meals, entertainment, fitness classes, group activities such as card or board games, and a general encouragement of social interaction.

Within high-risk groups of our population, these environments and related activities offer the perfect opportunity for a virus such as COVID-19 to spread if proper precautions, including social distancing and enhanced hygiene protocols, are not established, initiated and followed. The CDC has set out specific guidance and recommendations for Nursing Homes & Long-Term Care Facilities to address potential COVID-19 exposures.[2]  Failure to follow a prevention and control program in these settings can result in illness, death and litigation.  Oversights in the prevention and control of COVID-19 ultimately leads to potential legal exposure for nursing homes, long-term care facilities, individual healthcare providers, service providers and contractors that provide dining or cleaning services, as well as the individual employees themselves at a higher risk for becoming the target of litigation.

An example of the potential scope of legal liability faced by nursing homes and similar facilities as a result of the pandemic can be seen in a proposed class action filed in the United States District in Massachusetts pursuant to the Fourteenth Amendment and 42 U.S.C. § 1983.  Sniadach, et. al. v. Walsh, et. al., stems from COVID-19 infections and deaths afflicting 160 Veterans that resided at the Soldiers’ Home in Holyoke, Massachusetts resulting in the deaths of 76 Veterans.  The proposed class action alleges that the Soldiers’ Home, its management and staff failed to follow proper COVID-19 procedures.

The Holyoke facility was investigated and a report entitled “An Independent Investigation Conducted for the Governor of Massachusetts” was published on June 23, 2020 which examines the causes of the outbreak.[3]  The report
Continue Reading COVID-19’s Impact on America’s At-Risk Population: Risk & Legal Exposure – Liability & Immunity

As phased reopening plans are initiated across the country, many business owners are fearful that reopening may bring with it the possibility of significant liability exposure for COVID-19 related lawsuits. Businesses already feeling the impact of a national economic crisis could face an even more devastating financial impact absent some type of protection. It is inevitable that members of the public will continue to contract COVID-19, despite the precautionary measures in place and those contemplated by businesses that have yet to open. Many argue that in order to seriously consider reopening, businesses must be afforded some legal certainty that they will not face a flood of lawsuits from individuals that contract the virus. While it may be difficult for a plaintiff to ultimately prove that they contracted COVID-19 from a particular business, rather than from some other source, the costs associated with defending such lawsuits could place some businesses in financial jeopardy. In an effort to address these concerns and provide businesses with the confidence to reopen, a growing number of states have considered legislation aimed to immunize companies in various sectors from liability for potential lawsuits by individuals that contract COVID-19.

In the early stages of the pandemic, many states granted immunity to health care providers through legislation or executive order. More recently, states have both considered and enacted legislation that extends immunity to a much broader scope of businesses and other entities. For instance, North Carolina has enacted legislation offering limited immunity from civil liability for essential businesses in the state with respect to claims by customers and employees for injuries or death alleged to have been caused as a result of contracting COVID-19.[1] Emergency response entities are also afforded this immunity in North Carolina. There are, however, limitations to the immunity provided. There is no immunity if the injuries or death were caused by an act or omission of the essential business or emergency response entity that constituted gross negligence, reckless misconduct, or intentional infliction of harm.

Oklahoma offers even broader protection, as its recent legislation affords anyone who conducts business in the state immunity from liability in any civil action involving allegations of exposure or potential exposure to COVID-19 if the act or omission alleged to violate a duty of care was in compliance or consistent with federal or state regulations, executive orders, or guidance applicable at the time of the alleged exposure.[2] If two or more sources of guidance are applicable to the conduct or risk at the time of the alleged exposure, the person or business will not be liable if the conduct was consistent with any applicable guidance.

Similarly, Wyoming has passed legislation that provides immunity from liability for any health care provider or other person, including a business entity, who in good faith follows the instructions of a state, city, town, or county health officer or who acts in good faith in responding to the public health emergency.[3] Immunity does not, however, apply to acts or omissions that constitute
Continue Reading State Legislation to Immunize Businesses from Liability for Contraction of COVID-19

For all Americans, the beginning of June brings with it the lifting of stay-at-home orders and the reopening of the economies of every state. Yet, many experts warn that it could be months or even years before everyday life returns to normal. While the “new” American way of life is uncertain at best, recent trends in litigation provide some insight into the types of claims that are likely to arise out of the COVID-19 pandemic. One trend highlights an emergence in litigation involving consumer protection statutes and COVID-19.

Unfair and Deceptive Acts and Practices (UDAP) statues exist in all fifty states and the District of Columbia to protect consumers from unfair, deceptive, predatory and unscrupulous business practices.[1]  However, there exists little uniformity among UDAP statues. Some states such as Massachusetts provide for liberal coverage, extensive damages, and attorneys’ fees. Other states, such as Rhode Island, exempt most lenders and creditors from UDAP coverage.[2] By way of example, Massachusetts’ UDAP statute, known as “Chapter 93A” broadly prohibits “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”[3] Chapter 93A Section 9 provides for a private right of action for a claimant who is a consumer and Chapter 93A Section 11 provides for a private cause of action for an entity engaged in trade or commerce.[4] The Massachusetts UDAP statute provides for actual damages, multiple damages for knowing or willful violations, and attorneys’ fees to a prevailing claimant.[5]

In comparison, California has two UDAP statutes. First, California’s Unfair Competition Law, prohibits any unlawful, unfair or fraudulent business practice, as well as depictive or misleading advertising.[6] Though the Unfair Competition Law does not exempt particular businesses, consumers may not seek damages or multiple damages and are limited to restitution.[7] Private causes of action under California’s Unfair Competition Law are also limited to consumers who have “lost money or property.”[8] California’s other UDAP statute is the Consumers Legal Remedies Act, California Code sections 1750-1784.[9] The Consumer Legal Remedies Act applies to consumer transactions involving the “sale or lease of goods or services.”[10]

In addition to general provisions that prohibit unfair or deceptive acts, many UDAP statues give the attorney general or a state agency authority to adopt rules and regulations to enforce the act. For example, Massachusetts’ Chapter 93A provides that “[t]he attorney general may make rules and regulations interpreting the provisions of subsection 2(a) of this chapter.”[11] As such, on March 20, 2020, Massachusetts Attorney General Maura Healey announced an emergency regulation banning price gouging of essential products and services in light of the COVID-19 pandemic.[12] Attorney General Healey’s amendment sought to supplement Massachusetts’s Chapter 93A statute, which previously regulated only the sale of gasoline and petroleum.[13] The amendment now prohibits price gouging of all essential goods necessary to prevent the spread of the pandemic (e.g., masks, soap and hand sanitizer). By contrast, California’s Unfair Competition Law does not provide a
Continue Reading Consumer Protection in the Age of COVID-19

In our 240+ year history as a country, we have endured numerous tribulations that have in some way, threatened our way of life. The COVID-19 outbreak has forced us to engage in new behaviors, including social distancing and the consistent use of face masks outside of our homes. Moreover, several companies are working tirelessly to develop potential treatments for a virus that has infected approximately 1.25 million Americans and killed approximately 75,670.[1] Among other efforts, entities are repurposing equipment and physicians are prescribing medication for “off-label use.” Surgeon General Jerome Adams has even gone so far as to compare the COVID-19 outbreak to national emergencies like Pearl Harbor and the September 11, 2001 attack on the World Trade Center.

Indispensable to facing these challenges are private-sector entities. World War II is an excellent example, during which President Franklin Roosevelt declared, “[p]owerful enemies must be out-fought and out-produced.” Shortly after the attack on Pearl Harbor, many manufacturers were repurposed to manufacture war items such as aircraft, aircraft engines, trucks, and tanks. Though a pandemic is certainly different than a war, several companies have altered their normal courses of business to help contribute towards the collective fight against COVID-19. Today, the businesses supporting efforts to curb COVID-19 include pharmaceutical companies, medical device companies, medical technology companies, and more. Despite their good faith contributions, which include activities such as repurposing equipment and medication for “off-label” use, these companies will almost certainly face litigation related to the products they have manufactured in an effort to combat the crisis we face today. Nonetheless, companies may be insulated from liability pursuant to the Public Readiness and Emergency Preparedness Act (“PREP”), if they meet certain criteria.

PREP, signed into law in 2005, authorizes the Department of Health and Human Services (“HHS”) to issue a declaration that provides immunity from liability for entities and/or individuals involved in the development of “countermeasures” meant to fight a public health emergency. On March 10, 2020, the HHS issued a declaration providing “liability immunity for activities related to medical countermeasures against COVID-19,” absent willful misconduct (“COVID-19 Declaration”). Entities/individuals covered under the COVID-19 Declaration (“Covered Persons”) include those involved in the following activities: manufacturing, testing, development, distribution, administration, prescription and/or use of “Covered Countermeasures.”[2]

“Covered Countermeasures” under the COVID-19 Declaration

Certain products fall under the “Covered Countermeasures” category. Covered Countermeasures include:

  1. Qualified pandemic or epidemic products;
  2. Security countermeasures[3]; or
  3. Drugs/products authorized for emergency use by the Food and Drug Administration (“FDA”).

Qualified Pandemic or Epidemic Products

To qualify as a qualified pandemic or epidemic product, the drug, device, or biological product must be approved or cleared by the FDA, licensed under Section 351 (42 U.S.C. § 262) of the Public Health Services Act (“PHS Act”) as a biological product, or authorized for emergency use by the FDA.

In addition to the one of the foregoing prerequisites, the drug, device, or biological product must be:

  1. Manufactured, used, designed, developed, modified, licensed or procured to diagnose, mitigate, prevent, treat, or cure


Continue Reading The PREP Act and COVID-19