Some Post-COVID Clarity: Important California Updates on Third-Party Liability, Outbreak Definitions, and Employer Vaccine Mandates

Despite all attempts to put the COVID-19 public health emergency in the rearview mirror, the virus is not entirely gone, and the pandemic was not long ago, at least in the law’s long memory. We can reasonably assume we are nowhere near the end of pandemic-related litigation, particularly as it relates to workplace issues. Notably, California’s ever evolving Emergency Temporary Standards (“ETS”) survive in large part through the COVID-19 Prevention Non-Emergency Regulations (“NER”), which will not expire until February 2025.[1] In other words, employers still face legal exposure for COVID related issues.

Helpfully, however, recent California decisions and public health updates have provided some much-needed clarity on several key issues.

1. Employer Liability to Third Parties: Kuciemba v. Victory Woodworks, Inc.

On July 6, California’s Supreme Court held that in most cases, employers do not owe a duty of care to maintain a safe workplace to employees’ household members in the COVID-19 context. In Kuciemba, an employee contracted COVID-19 at work and passed it to his wife, who became severely ill. The Supreme Court attributed the husband’s infection to the employer’s failure to adhere to protocols and precautions mandated in a county health order which resulted in close contact with workers that had transferred from another site.

The husband and wife sued the employer for their injuries. The Ninth Circuit certified the following two questions to the California Supreme Court: “(1) If an employee contracts COVID-19 at the workplace and brings the virus home to a spouse, does the California Workers’ Compensation Act (WCA; Lab. Code, § 3200 et seq.) bar the spouse’s negligence claim against the employer? (2) Does an employer owe a duty of care under California law to prevent the spread of COVID-19 to employees’ household members?” The Court answered both questions: “no.”

After engaging in a lengthy duty of care analysis, the Court held that while all factors leaned towards extending the employer’s duty of care to an employee’s household members, policy considerations outweighed that analysis. Using language like “floodgates,” “litigation explosion,” and “deluge” and citing decisions from other jurisdictions, the Court held that due to COVID-19’s scope and high transmissibility, the creation of  a duty of care would risk overwhelming the courts and destroying businesses and essential public services. It further noted the procedural burden courts would face by imposing such a duty, including the factual barriers to class actions and the near impossibility of resolving similar cases before trial through mechanisms like dispositive motions. Finally, the Court cautioned that creating such a duty could cause an explosion of insurance costs.

It is important to note that Kuciemba by no means obviates California employers’ obligation to maintain a safe workplace for COVID-19 or other potential risks. Employers should continue to review policies, handbooks, and illness and injury prevention programs, in addition to OSHA and Cal-OSHA regulations, the Non-Emergency Regulations cited above, and other state, local, and federal public health orders. Please contact the authors or any member of Nelson Mullins’ Employment and Labor group with additional questions.

2. CDPH Narrows “Outbreak” Definition

On June 20, 2023, the California Department of Public Health halved the timeline in its definition of “Outbreak” for non-healthcare settings, superseding the prior State Public Health Officer Order. The changes are as follows:
 

As a reminder, in the event of an outbreak, the relevant sections of the NER require employers to implement a series of measures including testing, masking, and investigations. The CDPH justified the change based on the Omicron variant’s shortened incubation period.

3. Guidance on Vaccine Mandate Accommodations: Hodges v. Cedars-Sinai Medical Center

In late April 2023 the California Court of Appeal provided some welcome guidance on whether an employer must accommodate an employee’s request for an exemption to the employer’s vaccine requirement. In Hodges, the employee worked as an administrative assistant at a hospital. She did not work in any kind of patient care capacity. The hospital required her to get a flu vaccine unless certain exemptions applied, including if she could supply documentation of a “contraindication” to the flu vaccine as defined in CDC guidelines--a history of life-threatening allergic reactions to the flu vaccine or its components.

The hospital denied the employee’s exemption request because her only bases were past treatments for cancer, allergies arising from those treatments, and other general allergies. None of these met the CDC’s stated exemptions. When the employee refused to reconsider getting the vaccine, the hospital discharged her. Importantly, the hospital denied the requests of 14 of 24  employees who sought exemptions, all of whom got the vaccine after the denial.

The employee sued the hospital, bringing various discrimination, retaliation, and wrongful termination claims. The Court of Appeal affirmed the lower court’s decision to dismiss the employee’s claims. It held that the McDonnell Douglas burden shifting test did not apply because the employee  produced no direct evidence that the hospital acted with discriminatory animus or pursuant to some other prohibited reason. Accordingly, the burden of proof remained with the employee. The court highlighted the hospital’s policy and record of terminating other employees in the past who refused the flu vaccine and lacked either a religious exemption or medically recognized contraindication. This evidence supported the hospital’s argument that it reasonably believed the employee was not disabled, any minor reaction that she risked by getting the vaccine was not a disability, and she was therefore able to receive the flu vaccine.

The court also held that neither the side-effects the employee feared from the vaccine nor her prior cancer diagnosis rose to FEHA’s definition of a disability, as neither prevented her from performing her job duties or other major life activities.

Finally, the court rejected the employee’s interactive process claim. The court nonetheless cautioned that employers proceed “at their peril” if an employee is later able to prove they are disabled.

In light of Hodges, California employers should consider whether there is any risk of uneven or inconsistent application of their vaccine or other reasonable accommodation policies, and whether they are consistent with guidance from public agencies like the CDC. In Hodges, the hospital avoided liability by its careful adherence to both. The Court of Appeals noted:

An employer is not bound to accept an employee’s subjective belief that she is disabled. Instead, the employer is entitled to rely on other medical information. Here, Cedars relied on CDC guidance, applied by its own physicians, to conclude there was no objective evidence of disability. Contrary to plaintiff's contention, this did not amount to Cedars “playing doctor” and using its status as a healthcare enterprise to evade FEHA. Cedars adopted a policy recommended by the federal agency responsible for limiting the spread of disease in the United States and used that agency’s unambiguous guidance in formulating exceptions. Any employer adopting a similar policy would be capable of ascertaining whether an exemption applicant checked a box corresponding to a medically recognized contraindication.

(Internal citations omitted).

Noting that the employee’s proffered condition and related request were indeed subjective, despite her physician’s support, the hospital was allowed to deny the exemption and enforce its policy.

California employers should see Hodges as an opportunity for clarity but continue to tread carefully in managing employees’ accommodation requests and seek the advice of experienced counsel when necessary.