COVID-19 Workers' Compensation Litigation Guide

Many essential medical workers have no choice but to risk contracting COVID-19 as they work to save the lives of others. At other companies, however, corporate leadership decisions may be exposing workers to unnecessary health and safety risks.

Current workplace health and safety concerns include employer failure to comply with CDC guidelines for safe working conditions, lack of sufficient personal protective equipment (PPE), inability to practice social distancing measures, and inflexible or non-existent paid sick leave policies.

A wrongful death lawsuit against retailer Walmart was filed in Illinois on April 6, 2020, alleging that Walmart’s “willful and wanton misconduct and reckless disregard” for the health and safety of its workers caused the death of a stock and maintenance department employee. Walmart is considered an “essential business” under the Department of Homeland Security’s guidance. But the company is also responsible for adhering to OSHA and CDC guidelines in order to protect their thousands of employees working through a pandemic. The lawsuit against Walmart claims that the company failed to meet any of these standards.

Other companies may face similar lawsuits, as well as workers’ compensation claims related to employee illnesses. Amazon has made headlines recently for allegedly firing a whistleblowing employee who staged a walkout demanding paid leave and deep cleaning of the warehouse in which he worked. Similarly, over 200 Spectrum Cable employees tested positive for COVID-19 after the company refused to let them work remotely, ignoring social distancing guidelines. More recently, Tyson Foods has come under fire for its failure to protect employees from contracting COVID-19 in meatpacking plants across the country. Nearly 5,000 of Tyson’s employees have fallen ill with COVID-19, and 18 have died.

Even in the midst of record unemployment, workers’ compensation is directly impacted in the frequency and severity of claims. In analysis by the National Council on Compensation Insurance, injury claims are more likely to be filed by workers who fear for their job security and want to receive these benefits while they still are employed.

Alternatively, some employees may choose to defer claims for less technically severe injuries during the pandemic. As a result, there could be a surge in compensation claims once medical resources are not being prioritized to COVID-19 treatment. While hospitals remain inundated with coronavirus patients, this also contributes to delayed resolution on currently open claims.

Adding insult to injury, OSHA has also offered lackluster assistance to workers reporting unsafe workplace conditions. The government agency—designed to oversee occupational health and safety conditions—has actually loosened guidelines for nonmedical businesses during the pandemic. As a result, workers are experiencing lax viral protections and delayed compensation should they be injured on the job.

For Essential, Nonessential, and Federal Workers

Essential Workers’ Eligibility

Workers’ compensation insurance focuses specifically on covering illnesses and injuries sustained in a workplace environment. Employers offer this coverage either from state-run agencies or private insurance brokers. During the public health crisis, workplace injuries stemming from the novel coronavirus have been a constant concern for essential workers.

Contagion is a daily occupational threat, especially for frontline healthcare providers. Many states recognize the threat the coronavirus poses to the very services we deem essential. As such, states are moving to ensure their claims will be paid out. In California, Governor Gavin Newsom recently issued Executive Order N-62-20 which grants “rebuttable presumption” that an essential worker’s COVID-19 illness was contracted during the course of their employment, for the purpose of workers’ compensation. Similar workers’ compensation policies have been passed in Alaska, Arkansas, Illinois, Kentucky, Minnesota, Missouri, and Wisconsin.

Non-Essential Workers’ Eligibility

Nonessential workers may have a tougher time proving they contracted the virus directly through their work. According to the National Council on Compensation Insurance (NCCI), whether COVID-19 is compensable under state workers’ compensation acts is still an open question. The NCCI says, that “while workers compensation laws provide compensation for “occupational diseases” that arise out of and in the course of employment, many state statutes exclude “ordinary diseases of life” (e.g., the common cold or flu). There are occupational groups that arguably would have a higher probability for exposure such as healthcare workers. However, even in those cases, there may be uncertainty as to whether the disease is compensable.”

Federal Workers’ Eligibility for Workers’ Compensation

Under the Federal Employees’ Compensation Act (FECA), all federal employees who develop COVID-19 while in the performance of their federal duties are entitled to workers’ compensation coverage. This includes politicians, their staff members, military personnel, and numerous civilians, including postal workers.

Workers’ compensation is largely considered an “exclusive remedy,” meaning claiming these benefits forfeits civil litigation against an employer. However, as employees come up against roadblocks to compensation, they may resort to far more aggressive action in the form of negligence suits seeking punitive damages.

Employer negligence and workers’ compensation coverage remain separate concerns in determining liability and damages during the coronavirus crisis. Yet the two questions are likely to arise simultaneously in a number of cases and should be considered together for the ways in which they impact one another.

For example, all COVID-19 workers compensation claimants will face the burden of proof: was their infection contracted while they were on the job? For essential workers, many states have already guaranteed these claims will be honored. For other nonessential workers, connecting the infection to a work-related cause may be a steeper undertaking.

Negligence claims levied against companies like Walmart and Amazon may also play a role in handling future COVID-19-related workers’ compensation claims, insofar as they become legal benchmarks to establish causational factors of a worker’s illness.

To illustrate, imagine a hypothetical lawsuit against Spectrum Cable by employees who caught COVID-19 after being told they had to work from the office. If this lawsuit establishes that working at the office was the cause of the employees’ illness, that fact may help support the employees’ separate workers’ compensation claim by showing that they contracted COVID-19 in the course of their work.

But given the current bottlenecks of the workers’ compensation process, employees may find employment class action built on exposure liability claims may be the preferred legal alternative. In fact, the U.S. Chamber of Commerce calls exposure liability, “largest area of concern for the overall business community” as the economy reopens. Though this liability will depend upon individual protections on a state by state basis, the volume of evidence presented in a class action format could prove reasonable causation of occupational coronavirus.

Many such claims will benefit from the inclusion of expert witnesses. Experts in epidemiology or infectious disease may establish the biological facts regarding how the coronavirus can spread in a workplace. Occupational health and safety experts, as well as OSHA experts, will also be critical to understanding where employers were lacking in their protective measures for employees. And of course, workers’ compensation experts will be key for comprehending coverage policies and how recent state legislation has altered these terms.

The number of coronavirus related claims for workers compensation coverage is likely to rise as long as the risk of contracting the virus remains prominent. Early consideration of the connections between workers’ compensation and other COVID-19 claims can help legal teams build a cohesive strategy to address them.