State News : California

This has been an interesting year in the California workers’ compensation community with some interesting Board decisions and legislative changes, as well as a pending Supreme Court opinion that could materially alter the workers’ compensation landscape in California.

Take Home COVID and Possible Employer Liability For Non-Employee Injury Or Death Is Still Up In The Air

The workers’ compensation community is still awaiting resolution of the take home COVID issues raised in the Court of Appeal decision in See’s Candies Inc. v. Los Angeles Superior Court et al. 

This appellate court case appears to be a first in allowing a worker's lawsuit against an employer over a family member's COVID death.  The Court of Appeal determined that the claim was not barred by the derivative injury doctrine.  The state Supreme Court denied the Petition for Review without comment and the case was returned to the trial level where it is still proceeding to trial. 

Shortly after the See’s decision was announced, plaintiffs used it to seek to revive a very similar lawsuit in a Federal Court that was applying California law, Kuciemba et al v. Victory Woodworks, Inc.  That case was dismissed on the basis of the derivative injury doctrine.  The Federal Court certified two questions to the state Supreme Court:

1.            If an employee contracts COVID-19 at his workplace and brings the virus home to his spouse, does California’s derivative injury doctrine bar the spouse’s claim against the employer?

2.            Under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19?

On 6/6/22, the Supreme Court granted the request to answer these questions of state law.  The parties have briefed the issue and the last brief was filed 11/16/22.  A decision is still pending.  The Court’s responses to these questions could open the floodgates to numerous civil suits nationwide.

New Legislation Shortened the Decision Period For Presumptive Claims And Provides For Harsh New Penalties

On September 29, 2022, Governor Newsom signed Senate Bill 1127 into law.  The rules become effective as of 1/01/2023.  SB 1127 changes the California workers’ compensation landscape in three ways:

1. Reduces the decision period from 90 days to 75 days for injuries and illness defined under sections 3212 to 3212.85, and 3212.9 to 3213.2 (i.e., presumptive injuries for specified safety officers);

2. Increases the maximum number of weeks of disability benefit entitlement from 104 weeks to 240 weeks for presumptive cancer claims for specified firefighters and peace officers as defined in LC 3212.1; and  

3. Increases the penalty - up to five times the amount of benefits up to $50,000 - for claims of injury or illness as defined in sections 3212 to 3213.2 (i.e., presumptive injuries for specified safety officers and COVID-19 presumptive claims) that are unreasonably denied. (LC 5414.3)  

While all three of the above-mentioned provisions have an effective dated of 1/01/2023, the increased penalty provision of newly created LC 5414.3 applies retroactively, regardless of whether the injury occurs before, on, or after the effective date. 

The reduced decision period provision affects fewer injuries and illnesses when compared to the increased penalty provision.  However, both provisions apply to specified safety officer claims for hernias, heart trouble, pneumonia, cancer, PTSD, tuberculosis, MRSA, biochemical substances, meningitis, skin cancer, Lyme disease and to the low back under the duty belt presumption. 

By contrast, the penalty provision covers the three COVID-19 presumptions – 3212.86, 3212.87 and 3212.88 – whereas the reduced decision period provision does not. Thus, the timelines for decision-making specified for COVID presumption claims under SB 1159 still apply: 30 days under LC 3212.86 (essential workers with dates of injury before 7/05/2020); and, for qualified employees with a date of injury after 7/05/2020, LC 3212.87 (certain peace officers, firefighters and specified health care workers) allows for 30 days, whereas a decision must be made within 45 days for COVID claims arising under LC 3212.88 during a period of outbreak (for employees not covered by 3212.87).