DAN WALTERS: ‘Grand cut price’ of employees’ compensation underneath siege | Opinion

The COVID-19 pandemic, we have been told, is changing everything, and that includes possibly one of California’s oldest social support systems, employee compensation.

Legal tinkering and a potentially disruptive lawsuit threatens to undo a so-called “big deal” in workers’ compensation that closed more than a century ago.

Employers agreed to indemnify workers suffering work-related illnesses and injuries through medical care and cash payments as an “exclusive remedy” to protect employers from individual disability lawsuits.

Employers either take out insurance to cover their potential liabilities or insure themselves like most larger corporations and government agencies do.

From time to time lawmakers have changed the system for certain professions, particularly police officers and firefighters, creating the assumption that if they were affected by certain disabling conditions, including cancer and post-traumatic stress disorder, they would be entitled to workers’ severance pay, without this having to be proven professionally.

However, the big deal stayed with the vast majority of workers and their employers, at least until the pandemic broke out.

Last year the legislature passed and Governor Gavin Newsom signed a bill creating a “rebuttable presumption” that health workers and public safety workers infected with COVID-19 are entitled to workers’ compensation benefits, and that presumption applies to all employees expands whose workplace has experienced an “outbreak” of the disease.

The law deviates significantly from the long-standing procedural rule that an employee who uses benefits must prove that the disability is work-related. It was backed by a coalition of trade unions and rejected by employer groups who viewed it as a potentially costly loophole.

Meanwhile, a lawsuit against See’s Candies, a centuries-old California institution, could make an even more fundamental change to the employee compensation system and its “exclusive remedies” provisions.

Matilde Ek, a worker at the See distribution center in Southern California, contracted COVID-19 and apparently infected her 72-year-old husband Arturo, who died. Ek said she was working on the lake’s packaging line without proper social distancing or other protective measures, although some workers were coughing, sneezing and other showing signs of COVID-19 infection.

She and her daughters sued See’s, claiming the company was liable for his death because their workplace was not adequately protected against infection.

See’s, now owned by Berkshire Hathaway Corp. of billionaire Warren Buffet, admitted that Ek’s illness was work-related, but argued that the company has since been protected from liability for her husband’s death under the “only cures” doctrine.

However, Los Angeles Superior Court Judge Daniel M. Crowley refused to dismiss Ek’s lawsuit and agreed that Ek’s attorney agreed that her husband’s death was a separate event from her workplace infection.

Crowley’s ruling has brought the matter to appeals courts and has drawn the attention of large California and national corporate groups who see it as potentially undermining a fundamental principle of the employee compensation system.

“The judgment of the court of first instance, if upheld, could potentially expose employers across the state to unlimited criminal liability for alleged workplace injuries that lawmakers sought to address under the employee compensation system,” a coalition of corporate groups explained briefly on their appeal to the court. “Given this prospect, the potential impact … can hardly be overestimated.”

The money invested in workers’ compensation, about $ 20 billion a year, creates constant political competition between affected interests such as employers, unions, insurers, medical providers, and lawyers.

Their quarrels over the division of the cake have never fundamentally changed the 108-year-old system. However, the legislature and the courts can go in that direction, for better or for worse.

Email Dan Walters of CalMatters at [email protected]. CalMatters is a non-partisan, nonprofit journalism company dedicated to explaining California politics and politics. Additional columns from Walters can be found at Calmatters.org/commentary.

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