Building Readiness: Planning, Prevention, Response, and Liability
1. Can employees successfully make workers' compensation claims if they contract COVID-19 at our workplace?*
It’s possible. Workers’ compensation claims are governed by state law, which typically provides compensation for “occupational diseases” that “arise out of and in the course of” employment. Workers’ compensation is a “no-fault” system, meaning that an employee making a workplace injury claim does not need to show that the employer was negligent in any way. Rather, the claim typically depends on the employee showing that he/she was injured at work and that the injury was sufficiently related to the scope of employment. Unless the state provides otherwise, employees typically will still need to show medical evidence to support the claim.
The general test for whether an injury “arises out of and in the course of employment” is whether the employee was performing work that benefited the employer when the employee was exposed to the virus. Thus, even if an employer takes all the necessary precautionary measures to avoid COVID-19 exposure in the workplace, employees may be able to receive workers’ compensation. Employees must show that they contracted the virus after exposure in the workplace or within the scope of employment, suffered an injury, and required medical treatment or time off to recover. An employer may dispute a claim by showing alternate pathways of exposure or that the employee did not contract the virus at the time of performing a work-related activity.
In light of the COVID-19 outbreak, many states have enacted emergency measures that seek to protect essential employees and thus make it easier to successfully file workers’ compensation claims. A typical approach is to amend state workers’ compensation rules such that COVID-19 infections are presumed to be work-related and covered by workers’ compensation. In such states, the burden thus falls on the employer or the insurer to prove that the employee did not get sick at work. Some states have established these rebuttable presumptions through Executive Orders issued by governors. Other states have passed legislation covering specific types of workers. These state measures are often temporary and limited to certain defined groups of “essential workers.” CAAs in states that have established such presumptions should check whether any of their employees are covered.
CAAs should continue to monitor developments at the state level that could extend the duration of temporary measures or expand upon them.
2. What workers' compensation benefits are available for COVID-19 claims?
Likely the same as available for other workers’ compensation claims, but this will be dictated by each state’s worker’s compensation laws and any adjustments that may have been made to address the pandemic. Workers’ compensation benefits are typically limited to the employee’s medical expenses and partial reimbursement of their lost earnings and, potentially, of quarantine time required by the employer or by local, state, or federal agencies. Given that most employees recover from COVID-19 without significant complications, claims involving severe illness or long-term health problems are likely to be limited to employees who are older or have underlying health conditions.
3. Where can I find information about the workers' compensation laws in my state?
Your state Workers’ Compensation Board or Agency, which processes claims and directs insurers to provide benefits and payments to employees, may have information about how COVID-19 claims are reviewed. Your state or local bar association may also have resources on regulatory or legislative action in your state that impacts COVID-19 workers’ compensation claims in your state.
Further, the National Council on Compensation Insurance offers a detailed, state-by-state legislative tracker that monitors and provides updates on relevant workers’ compensation bills. It also offers a chart, which is updated weekly, showing state Executive Orders and legislation that impact COVID-19-related compensability presumptions for workers’ compensation claims. These resources can be helpful if your CAA is seeking state-specific information about workers’ compensation and COVID-19.
4. Can an employee who contracts COVID-19 while on a work-related trip file a workers' compensation claim?
It’s possible. The analysis of whether exposure to the virus “arises out of and in the course of employment” applies. Some states distinguish between “work time” and “down time” on a business trip for purposes of determining whether the workers’ compensation claim is compensable, while other states treat any injury suffered during a business trip as compensable, regardless of whether the employee was actually working at the time. Each claim will be fact-specific and depend on the state’s workers’ compensation requirements.
5. Can an employee working remotely file a workers' compensation claim?
Likely so. Generally, an employee is entitled to workers’ compensation benefits for injuries “arising out of and in the course of” employment, regardless of where the employee is physically working. Some state courts addressing workers’ compensation claims prior to COVID-19 have found that the employer’s lack of control over an employee’s home office premises is not relevant.
Employees typically have the burden of showing that the injury is work-related, though some states have enacted temporary measures shifting this burden to employers (see Liability Question 1). The primary issue will be whether the employee was engaging in an activity that benefitted the employer at the time the injury occurred. Employers can try to mitigate the risks of workers’ compensation liability for teleworking employees by:
- Implementing a Telework Policy that establishes expectations for employees who work remotely.
- Establishing general guidelines for a home office and providing training on workstation setup and safety, such as ergonomics.
- Setting a work schedule with clearly defined work and break/meal times, which can later help determine whether an injury occurred “in the course of” employment.
- As appropriate and possible, periodically checking your employee’s home office setups to help identify and eliminate safety risks.
6. Can employees bring wrongful death or personal injury claims due to COVID-19 in the workplace?*
There is a general rule that the workers’ compensation system is the exclusive remedy for work-related injuries, and that an employee cannot sue an employer for a work-related injury if they receive workers’ compensation benefits. However, because workers’ compensation laws vary by state, whether an employee’s COVID-19 claim will be covered by workers’ compensation depends on the requirements where the injury occurs. Some workers’ compensation laws exclude “ordinary diseases of life to which the public is exposed”, which may be interpreted to include COVID-19. If a state’s workers’ compensation law does not cover COVID-19 exposure, private claims of wrongful death or personal injury may be available to employees.
Since workers’ compensation claims are typically capped by statute, plaintiffs’ attorneys may also seek to bypass the workers’ compensation system and bring civil tort claims. Tort claims, which are also governed by state law, may allege the employer’s negligence, reckless, or intentional conduct, in causing the spread of COVID-19 in the workplace. If an employee dies as a result of COVID-19, family members could also bring wrongful death claims.
Damages awarded for a tort claim could include medical expenses, lost wages, as well as pain and suffering, including for members of the employee’s family. Such lawsuits also bring a level of publicity in the community, potentially the right to a jury trial (instead of a hearing officer or administrative law judge, who tends to hear workers’ compensation claims without an audience), and the potential for early settlement or access to general liability insurance funds.
Given employers’ concerns about potential lawsuits related to COVID-19, several states have passed laws that grant immunity to certain businesses from COVID-19 exposure lawsuits. Proposed federal COVID-19 stimulus bills have also included liability shields for businesses. At this point, statutory liability limitations have been enacted on a state-by-state basis, so CAAs should stay up-to-date on current developments in their state.
7. Can an employer be held liable if an employee's family member is infected by COVID-19?
It depends. Another area of potential employer liability is known as “derivative liability”. Some states may permit family members of employees who become infected with COVID-19 to bring claims against the employer. In these states, there is case law establishing that where the harm to the family member is a foreseeable consequence of the employer’s failure to take reasonable precautions in the workplace, the employer owes a duty of care to the employee’s family members and can be held liable for injuries suffered by the family members. Historically, the cases establishing this type of derivative liability have been triggered by toxins that are tangible, such as asbestos or beryllium. However, it’s possible that we will see claims involving COVID-19 and alleging a similar legal theory as businesses reopen, since employers can likely foresee that an employee infected with COVID-19 in the workplace would spread it to family members at home. It is important for CAAs to work with their local counsel to understand the types of claims that are allowed under their state laws.
8. How can employers protect themselves from wrongful death, personal injury, or derivative claims and lawsuits?
One way for employers to protect themselves from wrongful death, personal injury, or derivative claims and lawsuits is to take precautions to prevent the spread of COVID-19 in the workplace. This includes following the CDC’s as well as your state and local public health departments’ guidance for cleaning, implementing social distancing, reconfiguring workspaces and work schedules, and quarantining employees with known exposures to or a diagnosis of COVID-19. CAAs should also continually educate their employees about COVID-19 symptoms and engage with them regarding their concerns about workplace safety, as such employees may be less likely to bring a lawsuit in the event they are exposed to or diagnosed with COVID-19. CAAs should err on the side of transparency when disclosing that an employee is infected and notifying coworkers who were potentially exposed, taking into account the privacy considerations discussed in Response Question 4.
9. Can clients or visitors file claims that they contracted COVID-19 through exposure to our employees or workplace?*
It’s possible. CAAs generally must use reasonable care to make their facilities safe for clients and visitors. Though clients, visitors, and vendors are not covered by workers’ compensation laws or insurance, they may bring private suits, typically via a tort claim, in civil court. The guidance discussed in Liability Question 6 applies. In defense of such claims, your CAA may be required to show that you followed CDC and local, state, or federal agency guidance to reduce the spread of COVID-19. Documentation showing the reasonable efforts your CAA took in light of the risks will likely bolster your defense, including any training conducted, signs posted, procedures implemented, or equipment used in the workplace to protect employees and third parties. Though some states have passed legislation providing businesses with varying degrees of immunity from COVID-19-related tort claims, CAAs should continue to use reasonable care and follow applicable guidelines to make facilities safe.
10. Should our CAA require clients or vendors who have physical contact with our employees to sign liability waivers?
At this point, it’s not clear whether a waiver that shields your CAA from liability for COVID-19 exposure claims would be enforceable. A liability waiver is a written agreement in which one party (e.g., the client or vendor) acknowledges the risks of participating in an activity or accepting services from the other party (e.g., your CAA), and waives the right to sue the service provider in the future for injuries or damages arising out of the activity or services.
Though liability waivers are routine in certain activities, there are no clear precedents that indicate whether a COVID-19 waiver would be upheld, as courts have not had the opportunity to weigh in on the issue. Further, the laws governing liability waivers are contract laws, which vary by state. Case law has developed in each state dictating the substance and scope of liability waivers, and waivers must be properly drafted and entered into to ensure they are valid.
While it’s difficult to know with certainty whether a COVID-19 liability waiver would be enforceable, the following are some general principles that courts tend to consider when determining the enforceability of other types of liability waivers:
- Is it clear and unambiguous?
- Does it express the parties’ mutual intent to relieve one party of liability for negligent conduct causing injury or damages?
- Does it clearly indicate that the client or vendor understands the risks associated with the services, as well as the rights they intend to waive (e.g., expressly identifies exposure to coronavirus as a potential risk)?
- Is it fairly bargained for and voluntarily entered into?
Most courts will not enforce waivers of liability that attempt to prospectively waive liability arising from intentional, reckless, or grossly negligent conduct. Each of these standards of care require careful analysis under your state’s laws. Typically, gross negligence is a more significant deviation from the ordinary standard of care than negligence. For example, a CAA employee who visits a client’s home while exhibiting COVID-19 symptoms or being aware of a positive diagnosis could be deemed to have acted grossly negligently, recklessly or intentionally in doing so, and therefore would likely not be able to claim immunity from a claim of exposure, even if the client signs a valid liability waiver.
Further, courts will not enforce waivers that are deemed to be contrary to public policy. This is often the case when a waiver relates to a service that is important to the public and the parties have unequal bargaining power that makes the waiver inherently unfair. For example, some courts have found that waivers purporting to release an employer from liability for negligence resulting in harm to its employees violate public policy. Because COVID-19 affects the public generally, and it is possible that certain client services could be deemed sufficiently important to the public, it isn’t clear at this point whether liability waivers for exposure claims in certain CAA programs would be deemed contrary to public policy and thus unenforceable.
Despite their potential limitations, liability waivers are likely to become more popular as service providers and other businesses use them as a first step to proactively protect against possible liability from COVID-19 exposure claims. If your CAA is considering whether to incorporate these waivers into your services, be sure to work with an attorney in your state to properly draft the language and obtain client consent. Regardless of whether your CAA uses a liability waiver, it should continue to take all reasonable steps to protect against COVID-19 transmission, including following applicable local, state, or federal agency guidance as well as your own workplace safety and hygiene protocols.
11. What other insurance coverage and claims issues should our CAA be thinking about?***
Your CAA should review its existing insurance policies and coverages with a view towards potential claims that may arise during the pandemic. Specifically, be aware of the provisions in your policies that may affect your ability to recover losses related to COVID-19.
General Liability Policies
An umbrella or general liability policy may cover claims brought by third parties for bodily injury resulting from the CAA’s negligent failure to protect against COVID-19 at its place of business. However, the policy may include specific exclusions, such as for viruses, communicable diseases, or pollutants (which could cover viruses). At this point, it is not clear whether a valid claim could be made by a family member who is infected by an employee who is exposed to or contracts COVID-19 at your workplace.
Directors & Officers’ (D&O) Liability Policies
Check your Directors and Officers’ (D&O) liability insurance policy for coverage of claims filed by employees, clients, and visitors. For example, does your policy cover claims brought against directors and officers alleging that they breached their fiduciary duties because of the manner in which they responded, or failed to respond, to the COVID-19 outbreak?
Business Interruption Policies
As CAPLAW previously noted, if you have business interruption coverage as part of your commercial property insurance, check whether the policy requires “direct physical loss” or “damage” to the property. Claims for coronavirus-related business interruptions may not satisfy this requirement, particularly if your premises are uncontaminated and remain habitable, even if your organization is closed as part of a mandatory or voluntary quarantine. Some commercial property insurance policies will also cover losses sustained when a “civil authority” prohibits or impairs access to the policyholder’s premises. Your policy may also have a virus or pandemic exclusion.
Pollution or Environmental Policies
Some CAAs may have pollution or environmental coverage. Viruses may be specifically covered as a “pollutant”, which would trigger coverage for these policies. Even if they are not explicitly listed, the generic definition of a “pollutant” under many of these policies—”a hazardous substance”—may be sufficiently broad to include COVID-19. Such policies often cover business interruption losses due to pollutants, decontamination necessitated by pollutants, as well as third-party claims such as disease or sickness caused by pollutants.
Event Cancellation Policies
If your organization has to cancel a previously scheduled event, such as a conference or fundraiser, determine whether you have event cancellation policies that apply to the specific event, and the applicable coverage amounts. Covered losses in a typical event cancellation policy may include accident or illness and unavoidable travel delay. However, if you cancel an event because attendees and/or organizers are afraid of traveling and catching or spreading the coronavirus, but no government-imposed travel restrictions are in place, the claim may not be covered. Many policies also require you to mitigate losses by making a reasonable effort to postpone or reschedule the event. Business interruption insurance policies, which may be a part of your existing property insurance, typically would not apply to cancelled events. If you don’t currently have event cancellation coverage, consider whether to purchase additional insurance, taking into account the cost of coverage and the expense of having to cancel or reduce the size of your event.
Your CAA may also consider discussing options to purchase additional coverage with your insurance broker. At this point in the pandemic, it may be difficult to do so at commercially reasonable rates, given that many businesses are reevaluating the sufficiency of their insurance coverage for risks they may incur operating during the pandemic. When renewing a policy, be sure to discuss with your broker how the pandemic is affecting the CAA’s operations and any contingency planning or risk mitigation strategies the CAA is undertaking.
12. Can we use our federal grant funds to pay for COVID-19 related losses not covered by our insurance?**
Generally, actual losses which could have been covered by permissible insurance (through a self-insurance program or otherwise) are unallowable, unless expressly provided for in the federal award. However, costs incurred because of losses not covered under nominal deductible insurance coverage provided in keeping with sound management practice, and minor losses not covered by insurance, such as spoilage, breakage, and disappearance of small hand tools, which occur in the ordinary course of operations, are allowable. 45 C.F.R. § 75.447(c); 2 C.F.R. § 200.447(c).
Though previously the Office of Community Services and Administration of Children and Families allowed for certain administrative flexibilities with respect to costs incurred during the pandemic, those flexibilities have now largely expired, especially as they relate to the payment of wages and salaries. For additional information on this, please see CAPLAW’s News Flash on Office of Head Start Limits Wage and Benefit Flexibility, as well as CSBG IM-2021-159 COVID-19 Flexibilities Extended FY 2020 issued by OCS.
13. Could collecting temperatures and other health information subject us to an invasion of privacy claim?
It depends on whether the claim is brought by a client/member of the general public or an employee.
With respect to clients and members of the general public, whether an invasion of privacy claim exists will depend on your state’s laws. Most states have a right of privacy statute establishing that a person has a right against unreasonable, substantial or serious interference with his/her privacy. Typically, state courts have found that an individual’s right of privacy diminishes in areas that are open to the general public. An individual usually has no reasonable expectation of privacy when he/she is in a public space. During a nationally declared pandemic and because of state and local directives, there is a strong public health and safety argument that obtaining temperatures and health information from the general public is critical if CAAs are to provide essential services. However, beyond the pandemic, it is unclear whether health and safety concerns would outweigh an individual’s right to privacy.
With respect to employees, the EEOC has issued guidance that clarifies that employers may screen employees for COVID-19 symptoms. This guidance is applicable during the COVID-19 pandemic and may change if current transmission patterns shift, and we expect that the EEOC would update its guidance accordingly at that time.
*Updated October 15, 2020
**Updated December 4, 2020
***Updated April 15, 2021
This resource is part of the Community Services Block Grant (CSBG) Legal Training and Technical Assistance (T/TA) Center. It was created by Community Action Program Legal Services, Inc. (CAPLAW) in the performance of the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Community Services Cooperative Agreement – Grant Award Number 90ET0467-03. Any opinion, findings, conclusions, or recommendations expressed in these materials are those of the author(s) and do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration for Children and Families.