California Courts Weighing In re Employees and COVID-19
California courts recently issued two guiding decisions relating to COVID-19:
In Thai v. International Business Machines Corp., 2023 Cal. App. LEXIS 526, the Court of Appeal held that a government mandate to work from home did not excuse an employer from complying with reimbursement obligations under Labor Code Sec. 2802.
In Kuciemba v. Victory Woodworks, Inc., 2023 Cal. LEXIS 3733, the California Supreme Court concluded that an employer does not have duty of care to nonemployees for contracting COVID-19.
Thai v. IBM: Expense Reimbursement Required During Stay-at-Home Mandate
Following Governor Gavin Newsom’s “Stay-at-Home” order in March 2020, IBM directed its employees to work from home. However, IBM never reimbursed its employees for their home office expenses (e.g., internet, phone, computer, etc.), despite knowing that its employees incurred them.
In December 2020, Plaintiff Paul Thai filed a Private Attorneys General Act (PAGA) lawsuit against IBM, alleging that IBM failed to reimburse employees for work-from-home expenses incurred once shelter in place orders were enacted in March of 2020.
The trial court dismissed Plaintiff’s complaint, reasoning that IBM was not the “direct cause of … the Aggrieved Employees incurring necessary business expenses…” because “IBM was acting in response to government orders,” and, therefore, there was an “intervening cause precluding direct causation by IBM.”
The Court of Appeal reversed, holding that the March 2020 Stay-At-Home Order did not excuse IBM from complying with Labor Code Sec. 2802. (“An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer…”)
The Court reasoned that “the plain language of section 2802(a) flatly requires the employer to reimburse an employee for all expenses that are a ‘direct consequence of the discharge of [the employee’s] duties.’” Therefore:
“… the obligation [to reimburse] does not turn on whether the employer’s order was the proximate cause of the expenses; it turns on whether the expenses were actually due to performance of the employee’s duties.”
Kuciemba v. Victory: Employers Not Liable for Household Infection Spread
Robert Kuciemba contracted COVID-19 at work. He carried the virus home and transmitted it to his wife, Corby. Corby was hospitalized for several weeks and, at one point, was kept alive on a respirator.
In October 2020, the Kuciembas sued Robert‘s employer, Victory Woodworks, Inc.
Corby asserted, in part, a negligence claim. The district court held that Corby’s claims failed because Victory’s duty to provide a safe workplace did not extend to nonemployees, like Corby, who contracted a virus away from the jobsite. The Kuciembas appealed and the 9th Circuit asked the California Supreme Court to answer the following questions:
1. If an employee contracts COVID-19 at the workplace and brings the virus home to a spouse or other household member, does the California Workers’ Compensation Act (“WCA”) bar the spouse’s negligence claim against the employer under the act’s exclusivity provision?
2. Does an employer owe a duty of care under California law to prevent the spread of COVID-19 to members of its employees’ households?
In its July 6, 2023, opinion, the California Supreme Court held that the answer to both questions is, no.
As to the first issue, the Court held that the Plaintiffs’ cause of action against Victory for negligently violating county health orders was not barred by the WCA because Corby’s negligence claims were “not legally or logically dependent on any workplace injury sustained by Robert” and the “link between Corby’s injury and Robert’s exposure to COVID-19 is insufficient, on its own, to render the claims derivative.”
The Court distinguished the facts in Kuciemba from case precedent pertaining to asbestos related injuries suffered by household members who were exposed to asbestos from an employee’s clothing and then developed mesothelioma. In such cases, the duty involves a relatively small pool of defendants. By contrast, the duty to prevent COVID-19 infections would make “every employer in California a potential defendant” and the “pool of potential plaintiffs…enormous….”
Ultimately, the California Supreme Court concluded that the dire financial consequences for employers, possible social impact, and the potential litigation explosion – weigh against imposing a duty of care for non-employees for contracting COVID-19.
On July 25, 2023 following the Supreme Court of California’s decision, the Ninth circuit affirmed the district court’s dismissal of the Kuciembas’ First Amended Complaint.
Tal Burnovski Yeyni and Aspen Ferber-Paxson defend California employers from wage and hour, and other employee claims.