Plaintiff Maria Chavez is the widow of Leodegario Chavez Alvarado, who worked for Alco Harvesting, LLC as a foreman and bus driver. Alco provided decedent and other Alco workers housing at the Hotel Santa Maria. The company, 210 Nicholson, LLC, operated the hotel.

Plaintiff filed a wrongful death case against her husband’s employer and alleged her husband died of COVID-19 complications after contracting the disease while working for Alco. Plaintiff claimed that some of the Alco employees were placed in close living quarters that precluded social distancing. Alco was aware such placement facilitated the transmission of COVID-19. Alco was aware such placement facilitated the transmission of COVID-19.

According to the allegations in her second amended complaint it “was no surprise that a COVID-19 outbreak soon began at the Hotel Santa Maria.” Alco and 210 Nicholson became aware of a COVID-19 outbreak at the hotel well before decedent’s viral exposure. The outbreak was unknown to decedent. Alco failed to report the outbreak to the health department, notify its employees, or “implement adequate safety measures or measures to prevent or curb the outbreak.”

Decedent began feeling ill on or about June 26, 2020, and his symptoms “were those associated with a COVID-19 infection.” Decedent immediately reported feeling unwell to his supervisors. Plaintiff alleged that by virtue of their superior knowledge regarding the outbreak, “Defendants knew, even before [d]ecedent, that he had contracted the virus.” Plaintiff further alleged decedent “was unaware that he had contracted COVID-19. However, upon notifying them of his symptoms, Alco and 210 Nicholson had actual knowledge of [d]ecedent’s illness . . . .” Alco nonetheless failed to inform decedent of the outbreak or that his symptoms were that of COVID-19.”

Decedent tested positive for COVID-19 on July 2, 2020, a week after he had reported his symptoms to Alco. On that date, decedent was placed at a Motel 6. Decedent waited for medication to arrive, but none did. On July 7, 2020, he died of COVID-19 complications. Plaintiff alleged that because of the outbreak, decedent “was exposed to COVID-19 and fell ill. Alco’s deliberate concealment of the outbreak and the nature of decedent’s illness resulted in the aggravation of his illness to the point that he was unable to recover and succumbed to the disease.”

The trial court sustained Alco’s demurrer to the second amended complaint without leave to amend. Plaintiff appealed. The Court of Appeal reversed in the published case of Chavez v. Alco Harvesting, LLC -B329282 (June 2024).

Plaintiff argued that her second amended complaint sufficiently pleaded all elements of the fraudulent concealment exception to the workers’ compensation exclusivity rule. The Court of Appeal agreed.

As a general rule, an employee injured in the course of employment is limited to the remedies available under the Workers’ Compensation Act.

An exception exists “[w]here the employee’s injury is aggravated by the employer’s fraudulent concealment of the existence of the injury and its connection with the employment . . . .” (Lab. Code, § 3602, subd. (b)(2).)2 Thus, three elements comprise this exception: “(1) the employer knew that the plaintiff had suffered a work-related injury; (2) the employer concealed that knowledge from the plaintiff; and (3) the injury was aggravated as a result of such concealment.” (Palestini v. General Dynamics Corp. (2002) 99 Cal.App.4th 80, 90 (Palestini); see also Jimenez v. Mrs. Gooch’s Natural Food Markets, Inc. (2023) 95 Cal.App.5th 645, 658.)

The employer must have actual knowledge of the injury; constructive or imputed knowledge is insufficient. (Hughes Aircraft Co. v. Superior Court (1996) 44 Cal.App.4th 1790, 1796.). In Foster v. Xerox Corp. (1985) 40 Cal.3d 306 (Foster), the California Supreme Court analyzed the pleading requirements for the fraudulent concealment exception. The Court recognized the statutory injunction to “liberally construe pleadings with a view to achieving substantial justice between the parties. (Ibid.; Code Civ. Proc., § 452.) ”

Thus, with respect to the first element of the exception, the Court of Appeal concluded that “Construing the pleadings liberally as Foster did, plaintiff’s SAC fairly apprised Alco of the action’s basis – namely, that Alco knew decedent had contracted COVID-19 from his employment and concealed that knowledge from him, thereby aggravating his illness.”

With respect to the second element of the exception, Alco also argues plaintiff does not allege it “fraudulently concealed the alleged massive outbreak with the intent to induce [d]ecedent to continue working for any benefit.” The Court of Appeal disagreed, and said this “argument fails because the intent to extract more labor is simply not a requirement of the fraudulent concealment exception.”

The SAC sufficiently pleaded the final element of aggravation. The SAC alleged a week elapsed between decedent reporting his symptoms to Alco and a positive COVID-19 test. He died five days after that positive test. The SAC alleged “Alco’s deliberate concealment of the outbreak and the nature of [d]ecedent’s illness resulted in the aggravation of his illness to the point that he was unable to recover and succumbed to the disease.” Alco faults the SAC’s references to aggravation as conclusory.

The Court of Appeal responded by saying this “critique ignores Foster’s guidance that we should liberally construe the SAC, which may be pleaded in general terms. (Cf. Palestini, supra, 99 Cal.App.4th at pp. 89-90.)

“In sum, the SAC survives Alco’s demurrer because it states a cause of action under section 3602, subdivision (b)(2).”