The State of the COVID-19 Crisis in California

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PANDEMIC

“Who speaks of victory? To endure is all."

      ––	Rainer Maria Rilke

Today and in the coming weeks, Californians –– employers, their insurers and every resident –– are faced with one of the greatest challenges in our history.

As with all great calamities, the hardest part is dealing with the unknown. Without expertise, we are required to fathom and predict the course of a little-understood disease in order to make business and employment decisions at a local level. The same understanding and predicting is required at the state, national and global levels. We gain insight only incrementally, requiring daily revision of action and deepening of thought. Still, there's no promise of correct judgment. We do our best; knowing as much we can about what is going to happen makes planning possible.

We must plan while experts themselves disagree, clumsily gaining knowledge in fits and starts. Experts don't even know if aerosol transmission of COVID-19 should be of concern. Data are scarce because this is a novel virus. Our understanding is hampered by shortages of testing equipment, variations in medical and reporting infrastructure in different countries, and by the political agendas of individuals and governments. The scientific understanding of this virus is immature. Unreliable and insufficient data are all we have.

Some businesses are shut down completely. Those lucky enough to be operating can’t even call a meeting in a normal fashion. Every day brings challenges that stretch our limits. And we don't know how long the challenges will last.

We care about and want to take care of our employees –– their physical and mental health, and their livelihoods. We want to protect and maintain the business that sustains them. Many people are on edge, watching the unemployment claims rise within weeks to the tens of millions, many of which belong to our own. People are scared and hungry for meaningful leadership –– they're looking for answers and guidance.

Novel legal challenges pile on. For many of us who have had to impose layoffs, the specter of increased claims lurks for practitioners of both workers' compensation and employment law. Historically, layoffs are followed shortly by a wave of legal claims, and we're starting to see them now. People who have been working with and tolerating continuous trauma injuries have lost any incentive not to pursue a workers' compensation claim. Workers whose claims have been accepted might have renewed interest in them, and seek to realize value when the claims otherwise would end up administratively closed. Then there are the opportunists who emerge following a layoff –– people with questionable claims who prefer to be on disability than unemployment. Questions about sick leave, wage-and-hour requirements, the Family and Medical Leave Act and many other labor issues are not easily answered as a plethora of new legislation and emergency regulations emerge in an unprecedented rush. Extensive litigation seems inevitable.

Employers who have avoided layoffs and continue to operate are not necessarily in a better position. They, too, are required quickly to develop the legal expertise to stay out of trouble and to manage the trouble that inevitably develops. Gov. Gavin Newsom’s stay-at-home order of March 19, 2020 has us working in the closet, the garage ... whatever space affords us the privacy to do our jobs. Home is the workplace.

We all know our situation is grave. We really are in this together. Businesses with grit, business that can adapt and innovate, will survive. We hope this guide helps California employers and their insurers navigate the challenging and unfamiliar legal terrain. We will update this publication continually, as understanding of the situation improves, as crisis law develops, as innovative thinking maps a successful path through this complex problem.

Employers, insurers and employees can recover from the ravages of COVID-19. We can help.

WORKERS' COMPENSATION QUESTIONS

The implications for workers' compensation claims are vast. What happens when an injury arises in the home environment? Is a fall down the stairs now a compensable injury? What if it happens at night? What if it happens out in the yard, but during work hours? What was that called again –– oh yes, the personal comfort doctrine. Is the entire home a “zone of danger” while the stay-at-home order is in effect, or after it's lifted but while employees are still working from home? Is any claim of injury beyond first aid defensible?

What of the virus itself? Under what circumstances is catching it compensable? What's the status of the various legislative efforts to create presumptions regarding COVID-19? What if a family member is quarantined in the same home where an injured employee is required to work? Would the fact that he or she would have to go home even if he or she was working on-site serve as a defense? What's the standard of proof?

And what of the psychological claims that will inevitably develop around all of this? COVID-19 is stressful for everyone. Uncertainty abounds about the future of the national and global economies, about how long we must endure the virus, about how to restart the economy, about how to balance economic and public health needs. Massive uncertainty reigns in a polarized nation during an election year. The phenomenon lacks the hallmarks of an actual event of employment, but could it be a platform for the defense of psychological claims under the predominant causation requirement of the Labor Code? Is being sent home a personnel action?

If a claim is filed, what if it interacts with a co-morbidity, for example, heart problems? What if the co-morbidity itself is an industrial injury or condition? What if the virus in combination with a co-morbidity causes permanent problems? What if it causes death? If an employee is on modified duty, and gets laid off, is temporary disability appropriate? If it's not provided, is that an LC 132a violation? The implications for the obligation to provide benefits are myriad and complex.

What about process? When is an employer obligated to provide a claim form to a sick worker? How can an employer manage all the required letters when claims adjusters are working from home? Is there any functioning court system? As the Workers' Compensation Appeals Board seeks to adapt to stay-at-home practice, use of a popular call-in service is supplanted by the use of appeals board telephones. What can we expect from this alternative system? Early reports indicate that appearance is voluntary –– is there any legal authority for this to be otherwise? What are the immediate practical implications of the alternative process for existing bodies of litigated claims? What should employers and insurers do to innovate in this environment? What of depositions and qualified medical evaluator in-person exams? What’s working?

EMPLOYMENT AND LABOR ISSUES

California is well-known as one of the most (if not THE most) challenging states for employers to comply with the complex body of employment laws. In this new era of COVID-19, employers will be tasked like never before to remain compliant in a minefield of liability traps.

What are an employer’s obligations to maintain a healthy workplace? What is the limit of inquiry into an employee’s health conditions as they relate to COVID-19? Can physical exams, like taking temperatures, be conducted in the workplace? Do these restrictions change when employees are teleworking?

With the onset of new and evolving federal/state/local laws mandating leave benefits to employees, businesses must now decipher which, if not all, apply. How long must paid leave be provided (and at what rate) for employees impacted by COVID-19? Are the company’s already generous paid leave policies enough, or must they now do more? Does the employer pay these new benefits, or government entities? What if the company cannot function if these employees are on leave? In what ways do FMLA/CFRA leave laws interplay with the new FFCRA benefits? What about the furloughed/laid off employees?

Federal and state existing discrimination, accommodation and retaliation laws are similarly implicated in new and complex ways. Is COVID-19 a disability for which an employer is required to make reasonable accommodations? Even if not an actual disability, what are the dangers of regarding or treating an employee as disabled because of COVID-19 related issues? Can “at risk” employees be forced to telework to protect other employees? What new policies can be implemented without running afoul of race and age discrimination statutes? Can new-hires be screened and denied jobs if they test positive for COVID-19?

These are just a few of a universe of issues employers must understand and properly navigate to avoid costly liability exposure in California.

THE SITUATION

A Global Failure to Prepare

In 2015, Bill Gates (now) famously presented a Ted Talk expressing his vision for managing epidemics following the Ebola outbreak in western Africa that claimed 10,194 lives. He noted that “The problem wasn’t that there was a system that didn’t work well enough. The problem was that we didn’t have a system at all.” He noted some key missing pieces that inhibited effective intervention: there was no team of epidemiologists at the ready to see what the disease was and to see how it spread; no medical team at the ready; there was no infrastructure in place to prepare people to manage the outbreak. There was no one there to look at treatment approaches, diagnostics, what tools we could use, such as processed plasma from the blood of survivors. He said that the fact that these key epidemic management tools were not in place was a global failure, and noted that the WHO is funded to monitor epidemics, but not to react to them.

His discussion of the elements that preserved us from a pandemic of Ebola included its lack of airborne transmission, its failure to make it into urban areas, and the fact that by the time a person was contagious, they were so sick as to be bedridden. He warned presciently that should these factors change, we could be beset with a pandemic. World Bank estimates then projected that a worldwide flu pandemic would cause a global loss of wealth of $3 trillion and cost millions and millions of lives. A model of the Spanish flu of 1918 in today's world projected over 33 million deaths worldwide.

He said that perhaps this Ebola epidemic had a silver lining in that we now have the technology to build a robust response infrastructure. He urged that we treat this as a wake-up call to be ready for the next epidemic. His suggested key elements including putting tools into a global health system. Stronger health systems in poor countries where outbreaks are likely to emerge; a medical corps with the training and expertise at the ready to deploy in early stages of the outbreak; pairing of these personnel with the military; do simulations in preparation, and to step up research and development in areas of vaccines and diagnostics. The expected budget was minuscule relative to the potential harm. Bill Gates was of course, unfortunately correct.

A Current Look - California

Enter 2020 and COVID-19. As stated previously, the numbers can be validly criticized due to dramatic testing shortages and serious imperfections in marshalling and properly interpreting data. That said, they are all we have and they are not useless. Meaningful conclusions can still be drawn in the range of available information. Links are going to be imbedded here where it seems like they would be useful.

First, many people are now familiar with Johns Hopkins as an early leader in providing up-to-date information especially on numbers of confirmed cases and numbers of deaths. They also provide a more hopeful metric, which is number of recoveries. This is organized by region. You can select a country and the data drills down to the state and then county levels. Their site is updated more or less by the hour. There are email updates available daily that you can sign up for that give a written summary worldwide. Perhaps most useful is the map they produce and update very close to real time.

It should be noted that due to the testing shortages and due to the fact that many people infected are asymptomatic (up to 50% some think!) or lightly symptomatic, that the true numbers of cases are thought to be 5-50 times actual confirmed cases. There is no way to know. This multiplier will also change as more testing takes place. Perhaps it is sufficient to say that there are an awful lot more cases than reflected in this dashboard. It’s still a good place for some existing data, however limited.

California seems to have done a rather fantastic job of flattening the curve. It’s not immediately clear why, but we benefited from being affected a bit later in the development of the disease and from the growing public knowledge of the experiences of China, Italy and then New York. Early shelter in place orders in California (March 19, 2020) certainly had an important if unmeasurable contribution. Early on, it was thought that most people in California were not properly anticipating what was going to happen, likely because of reluctance to accept the economic implications of having the proper insights and because our instincts tell us to think in a linear instead of an exponential manner. There was reason to think this, but mercifully, it hasn’t borne out.

A very well circulated blog article on the importance of understanding exponential math may have contributed to public behaviors that curbed the spread of the virus; there were over 40 million views. A very well respected source of data for COVID issues overall is found at Our World in Data.

California had 2,628 confirmed cases on March 24. On or about the same day, Gavin Newsom advised that CA would need 50,000 hospital beds to deal with coronavirus. We do have a sharp increase in number of confirmed cases to 28,392 by mid-day April 17. However, one must keep in mind that due to the incubation period of the virus, this number represents infections occurring up to 14 days previously.

On April 8, an analysis argued persuasively that California had “bent the curve” already. A later analysis by the same author concludes that the curve is bent in California with reference to hospital data in support, and turns to discuss recommendations for careful emergence from stay at home. California appears to have bent the curve downward rather magnificently. Peak usage of hospital beds was recently expected to be on April 17, 2020, with a mere 2,004 beds then anticipated be required on that date. It seems we were using more than predicted on that date, but not by much. With present social distancing measures, this analysis expected us to taper to zero COVID related hospital bed usage on May 28, 2020. There’s even better news because there is a long tail; for example on May 11, a mere 87 beds will be needed. This is per a model published by the Institute for Health Metrics and Evaluation (IHME), a University of Washington independent global health research center:

Interestingly, and giving us some reason for hope, social distancing in California seems to have been much more effective than Governor Newsom had predicted.

A Look Forward

While California appears to be doing well, the global pandemic remains. There are warnings about the food supply especially in poor countries. We are all familiar with the economic impacts as the stock market makes the news nearly every day. California of course remains susceptible as the global pandemic rages. Even if we can resume some limited economic activity, any flare up could prove worse than the original problem. We must remain vigilant and aware of the continuing threat.

On April 17 Johns Hopkins summarized the global numbers as follows: "The WHO COVID-19 Situation Report for April 16 reports 1,991,562 confirmed cases (76,647 new) and 130,885 deaths (7,875 new). Assuming that the total reaches 2 million cases in this afternoon’s Situation Report, it will have taken 13 days to go from 1 million cases to 2 million. By comparison, it took 8 days to go from 500,000 cases to 1 million and 7 days to go from 250,000 cases to 500,000. On a global scale, the doubling time is slowing (at least in terms of reported cases), but the pandemic is still growing steadily. Notably, in the 13 days it took to double from 1 million to 2 million cases, the number of reported deaths increased 130% (from 56,986)." By afternoon on the day of the same report, 2,224,426 cases were reported globally by 2:38 PM.

No one knows how this will play out, and we have to live with that. Many experts note that the behavior of individuals is largely what will determine the outcome. California's success, to some extent, is the result of our local culture's ability to understand required social behavioral changes necessary to stop the virus from spreading. It's something to be proud of.

There is also some good news. Private industry and philanthropists are coordinating efforts as history may have never seen. The Bill and Melinda Gates Foundation Gates has already put $250 million toward fighting this virus including development of vaccines even as conspiracy theories abound online about Bill's involvement in COVID's generation or distribution. Apple and Google have launched a joint effort to systematically track infections and warn people about exposure while simultaneously protecting our privacy. Here's a link to a cartoon explanation for computer laypersons that really explains this well: https://ncase.me/contact-tracing/. It's impressive to see what a focused effort by the best and the brightest on the planet looks like.

We'll see what happens. In the face of the enormity of this problem, and all of the devastation wrought by COVID-19, there are some truly incredible and beautiful moments of humanity that we would all do well to take notice of. Actor John Krasinski has assembled some of them in a quirky but fantastic ad hoc online "news" show, called Some Good News. If you have a moment to change your focus, you should watch it. It's positive, and it helps.

Now, back to business. Here's our best on how to understand the relevant law in California relating to COVID-19.

INTRODUCTION

EMPLOYMENT AND LABOR LAW

WORKERS' COMPENSATION LAW

The State of the COVID-19 Crisis in California

From Navigating COVID-19

Contents