Vasquez: See's Candies: The Unwitting Supplier to Forrest Gump

Thursday, January 13, 2022 | 0

According to Forrest Gump, “Life is like a box of chocolates — you never know what you’re gonna get.” See’s Candies recently learned that lesson, as explained on Dec. 21, 2021, by the California Court of Appeal.

Davil R. Vasquez

The California Court of Appeal, 2nd Appellate District, certified for publication the case of See’s Candies Inc. v. Superior Court (Ek). The holding in this opinion is worthy of careful consideration by all California employers. It implicates their potential liability for civil, personal injury damages to third parties, arising from work-related infections. In this case, the infection was of the COVID virus, which is now prevalent throughout California.

To put the See’s holding in proper context, since 1917 California law has held that when an employee suffers a work-related injury, that employee’s exclusive remedy is, with very few exceptions, a claim for workers’ compensation benefits against the employer. Such a claim entitles the employee to reasonable compensation for medical expenses, as well as limited compensation for any temporary and permanent impairment to resuming work at full, pre-jury capacity. However, this rarely compensates an employee’s full loss of past earnings or loss of future earnings.

The “workers’ compensation bargain” this law struck entitles employees to these remedies without having to prove any fault on the part of the employer for having caused an injury or illness. In exchange, however, California employers gained immunity from potentially very large liabilities for civil personal injury damages, which often include an award for the injured person’s pain and suffering, full loss of earnings and even punitive damages in cases of outrageous misconduct.

In addition, this bargain has protected California employers from large civil liabilities to the heirs of employees who die as a result of their industrial injuries or illnesses. Indeed, an employee’s heirs cannot recover anything from the employer unless they demonstrate financial dependency on the deceased employee. Even when they can, the remedy does not compensate for the loss of the love, companionship and guidance the deceased employee would have provided his or her heirs, had the employee survived. By contrast, civil juries often highly evaluate such damages when rendering verdicts in civil wrongful death trials.

The California Labor Code Section embodying this civil damage immunity is Section 3600, which states that the workers’ compensation remedy is “in lieu of any other liability whatsoever to any person." In furtherance of this apparent intent to broadly immunize employers from civil liability for industrial injuries — not only to injured employees, but “to others” — the courts have held that a workers’ compensation claim by the injured employee, or by his or her dependents, is also the exclusive remedy “for certain third-party claims deemed collateral to or derivative of the employee’s injuries” (Snyder v. Michael’s Stores Inc. (1997) 16 Cal. 4th 991, 1000).

This “derivative injury doctrine” protects California employers from claims by the heirs of deceased workers for civil wrongful death damages associated with the death of the industrially injured or infected employee. It prevents the spouses of injured employees from suing employers in civil court for loss of consortium damages, which include the loss of love and sexual relations. The See’s case appears to weaken this historically broad immunity.

In the See’s case, employee Matilde Ek claimed she became infected with the COVID virus because See’s allegedly failed to provide its employees with reasonably adequate protection from contracting the virus from co-workers. She alleged that it negligently failed to enforce distancing of employees and to provide “safety mitigation efforts,” despite concerns expressed by employees.

Mrs. Ek alleged that her husband, Arturo Ek, became infected with the COVID virus she brought home from work, resulting in his death. She and her daughters asserted a civil wrongful death lawsuit against See’s.

See’s challenged the lawsuit right from the outset. Its lawyers argued that even if all of the complaint’s allegations were assumed true, the legal immunity afforded by the Labor Code and the derivative injury doctrine precluded the Eks’ claims. To the surprise of many, both the trial judge and the Court of Appeal disagreed.

The thrust of the court’s opinion distinguishes between a third person suffering damage as a direct result of an employee’s industrial injury or illness, which would trigger the derivative injury doctrine, and a third party suffering an injury or illness as a direct result of the employer’s negligence in exposing that third person to a toxin, the exposure to which the See’s court concluded would have occurred whether or not Mrs. Ek herself became sick. The court reasoned that it was not Mrs. Ek suffering from an illness that caused her or their children’s wrongful death damages, but her infection that rendered her a conduit for spreading COVID as a result of See’s alleged negligence.

Stated differently, because the heirs’ damages did not result from any negative effect Mrs. Ek experienced from the infection — such as pain, symptoms of COVID, inability to work or inability to perform as a mother and wife, but instead from her having brought the disease home allegedly due to See’s negligence — the derivative injury doctrine did not necessarily afford See’s exclusive remedy immunity from civil damages.

For employers, there are several important takeaways from the See’s decision. First, the holding further erodes the exclusive remedy rule that protects California employers from civil liabilities arising from work-related injuries. Although it does not go so far as to specifically hold that employers in fact owe a duty of care to family and friends of employees who suffer work-related illnesses, the opinion’s concluding remarks certainly foretell such a conclusion:

“[I]magine that a researcher in a laboratory studying dangerous pathogens inadvertently becomes infected due to the employer’s lax safety protocols. That researcher then boards a bus home and infects all of its passengers with a lethal virus ... Neither the statutory language nor the case law, however, remotely suggests that third parties who, because of a business’s negligence, suffer injuries — logically and legally independent of any employee’s injuries — have conceded their common-law rights of action as part of the societal ‘compensation bargain.’”

Second, employers can take measures to reduce the risk of civil liability to family and friends of employees who may become ill from COVID allegedly because an employee contracted the virus while at work and brought it home. Specifically, the advice here is to 1) adhere to the policies and procedures recommended by Cal/OSHA and by the county, state and federal Centers for Disease Control and industrial safety; and 2) as important, create and preserve documentary evidence of your business’s compliance with these guidelines and regulations.

In the world of legal proceedings, it is often not enough to do the right thing. Managers, supervisors and foremen who train on and enforce safety, and who could testify under oath that they did the right thing, may become unavailable by the time they are needed to testify. Even if they are available, they may innocently forget important facts or details after a year or more passes before trial or a deposition.

Signed written records can often help refresh an employee’s memory or sometimes stand on their own as evidence of compliance with safe workplace protocol. Further, juries tend to believe witnesses whose testimony is corroborated by records created before any loss was suffered or any claim asserted.

In the context of our COVID pandemic, those employers that can demonstrate their compliance with applicable COVID guidelines by producing testimony from managers, and records to corroborate that testimony, should be well-equipped to defend the civil lawsuits now likely to follow in the wake of the See’s decision.

Davil R. Vasquez is a shareholder at Adelson McLean in Newport Beach, California. The firm provides workers’ compensation, general liability, subrogation and employment law services.