THE ABILITY TO RECOVER DAMAGES from an employer for stress-related disabilities, especially psychiatric disability, is not new to the California workers' compensation system, but the ability to recover for emotional strain wholly unrelated to physical injury is. And despite legislative reforms narrowing the employee's right of recovery, California risk managers are still facing an avalanche of costly occupational stress claims. Although stress claim cases in California are a minority of total workers' compensation filings, litigation surveys suggest these claims are a growing minority- about 99 percent of stress claims are reportedly litigated. In all the claims where there was a stress-related disability, the defense attorneys' bar reported a 700 percent increase in such cases over the last five years. According to the California Workers' Compensation Institute (CWCI), the direct cost of resolving a single stress claim is between $10,000 and $13,000.
California workers' compensation reform legislation, effective in 1990, has attempted to address the growing number of stress claims. The new rule for injuries occurring in 1990 and beyond is that actual events of employment must contribute at least 10 percent to the applicant's disability. Prior to the enactment of this new legislation, the standard for stress cases was established in the leading case of Albertson vs. The Workers' Compensation Appeals Board (WCAB) (Bradley). This 1982 case held that if an employee honestly perceives stress in the workplace and thereby sustains a disability, it is compensable. Compensability is found even if the employee misinterprets the nature of the events taking place or reacts more sensitively than most people.
While the definition of stress in the workplace varies from state to state, there are basically three ways that an employee can acquire psychiatric injuries. The first type of injury arises from the psychological impact of a physical injury, such as in the case of an individual who cannot adjust to the traumatic amputation of an arm or leg. Every state surveyed recognized the so-called physical/mental injury sequelae.
The second type of psychiatric injury is a physical manifestation of mental stress, such as ulcers, heart attacks or high blood pressure. These mental/physical injuries are not always considered to be work-related. Some states, like Arizona and Texas, have very high thresholds for this. type of injury, whereas other states, such as New York and Illinois, are seeing a growing acceptance of these cases as being work-related.
The last type of injury is the mental/mental injury, an example of which would include employees, such as the bank teller robbed at gunpoint, who suffer legitimate, disabling psychological injuries. However, decades of pop psychology have combined with an increasing willingness to blame others for personal problems to produce a new and unique cause of action. Coupled with an increasingly liberal legal system, employers are finding that every employment-related action has an equal and opposite reaction in the workers' compensation arena. One troubling reaction, however, has been the employee disciplined or terminated for poor performance who in turn files a stress case alleging that a supervisor's harassment led to psychiatric injury.
While this article focuses on the alarming rate of stress claims in California, it should be noted that this is not strictly a California phenomenon. Other states also are concerned about the potential increase in mental stress cases. Among the states surveyed, the ones recognizing mental/mental injuries did require the employee to meet a substantial burden of proof, usually, as in New York, Mississippi and Arizona, by requiring the demonstration of unusual or extraordinary stress. Some states also require a specific incident: continuous trauma is not recognized in Illinois, for example. Georgia, Alabama and Texas are among the states that do not recognize mental/mental injuries at all. …