Are Claims For Work-Related Stress Stemming From A Personnel Decision Compensable?

New York’s Workers’ Compensation Law allows for stress related mental injuries to be found compensable in certain situations.

In general, Workers’ Compensation Law §2(7) precludes claims for mental injuries based upon work-related stress “if such mental injury is a direct consequence of a lawful personnel decision involving a disciplinary action, work evaluation, job transfer, demotion, or termination taken in good faith by the employer.”

A recent Appellate Division case, Matter of Haynes (Catholic Charities), (N.Y. App. Div. 3d Dep’t Jan. 28, 2016) presented this very issue. In that matter, the claimant alleged a psychological condition was the result of being assaulted by a client at work. The employer argued the claimant’s mental condition was instead related to two warning letters issued to the claimant in good faith. The employer’s argument being the psychological condition was due to the disciplinary action and therefore not a compensable condition/injury under the law. The claimant asserting the psychological condition pre-existed the disciplinary action, due to a specific work incident, and therefore was a compensable mental injury.

The Board found the claimant’s mental injury stemmed from work-related stress (assault at work) and was being treated for her condition prior to the issuance of the two employment related warning letters.

“Whether an employer’s actions constitute a lawful personnel decision undertaken in good faith is a factual issue to be resolved by the Workers’ Compensation Board.” Miles v. State Ins. Fund, 267 A.D.2d 511 (N.Y. App. Div. 3d Dep’t 1999). Under the specific circumstances of this case, the Court affirmed the Board’s ruling.

Had the Board found the claimant’s psychological condition was actually related to the warning letters the outcome of this case would have been significantly different.

Declan is an attorney licensed to practice law in New Jersey, New York and the U.S. District Court of New Jersey. Declan is a Partner at Lois LLC where he defends employers and carrier in New York workers’ compensation claims. He can be reached directly at dgourley@lois-llc.com or 201-880-7213.