For employers who have had to deal with hard economic times these past few years, there’s a bit of good news: a California appeal court has rejected an employee’s plea for workers’ compensation benefits stemming from stress over the employer’s poor financial situation and downsizing.
Stressful Jobs
For 13 years, Clifford Bryan worked for Pacific Gas & Electric Co. (PG&E) as a “collector,” visiting homes of delinquent customers to collect money or turn off the gas and electric service. Eventually, Bryan’s collector job was eliminated and he was moved to a front counter job in a PG&E office. Bryan said he found this position—which involved serving customers who didn’t like the company and made abusive and sometimes violent comments to him—even more stressful than his prior job.
Employer Has Financial Woes
A couple of years later, PG&E began to downsize because of financial problems. And a series of electricity brownouts and blackouts throughout the state led to an upswing in customer complaints. Bryan began having chest pains and sought medical attention.
Workplace pressures increased further, according to Bryan, when PG&E filed for bankruptcy. Bryan was particularly concerned because he had more than $200,000 in retirement funds invested in PG&E stock. A few months later, the pressures became too much for Bryan and he quit.
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Psychiatric Evaluations Differ
PG&E sent Bryan for a psychiatric evaluation, which concluded that 60 to 65 percent of Bryan’s stress came from personal, non-work-related stressors. But Bryan’s own physician found his stress resulted entirely from his job.
The Workers’ Compensation Appeals Board (WCAB) ruled Bryan was entitled to benefits based on four factors it said primarily caused Bryan’s psychiatric injury: 1) the downsizing; 2) Bryan’s daily interactions with irate customers; 3) the lost value of PG&E stock; and 4) Bryan’s concerns about PG&E’s future and his retirement funds.
No Benefits, Says Court
A California Court of Appeal reversed the WCAB decision. The court explained workers’ comp benefits may be awarded for a psychiatric injury only if the employee demonstrates that “actual events of employment”—arising out of the employee’s working relationship with the employer—account for at least 50 percent of the injury.
The court found the WCAB properly considered Bryan’s having to deal with irate customers as a work-related stress factor. However, the WCAB improperly considered the other three factors, as follows:
- Downsizing. Corporate downsizing alone doesn’t support a benefits award. All employees who work for a troubled company experience some stress, so allowing employees to recover benefits for psychiatric injuries caused by this stress would subject employers to virtually unlimited liability.
- Stock losses. Bryan voluntarily invested his retirement funds in PG&E stock, so his investment loss was no different from the general investing public’s and wasn’t an employment event. (Note the court didn’t specify if the result would have been different had PG&E required that retirement funds be invested in its own stock.)
- Concern over company’s future and his own retirement. Bryan’s anxiety over PG&E’s future implied a fear of lost job security, but this fear would have been common to all PG&E employees. And Bryan’s concern over retirement fund stability and value couldn’t support an award of benefits because he had made a personal decision to invest his retirement funds in PG&E stock.
The court sent the case back to the WCAB to reconsider whether having to deal with irate customers was a predominant cause of Bryan’s stress injury.
Taking Aim At Stress
This decision helps limit the circumstances when employees can prevail on workers’ compensation claims for job stress resulting from tough economic times. But keep in mind that employee stress can have other negative impacts on your workplace besides workers’ comp benefits. Employees who are stressed over downsizing may have a difficult time being productive or even coming to work on time each morning. You can also obtain a free booklet on managing workplace stress from the http://www.cdc.gov/niosh/docs/99-101/ or by calling (800) 356-4674.