Psychiatric Impairment Arising from COVID-19

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PSYCHIATRIC INJURIES

In response to the coronavirus, the government issued an order requiring all California residents to stay home, except for those workers deemed to be essential. As a result, employers were required fundamentally change their business practices.

Some laid off workers due to the uncertainty surrounding COVID-19. Some implemented new technology to allow employees to work from home. For businesses deemed to be essential, some instructed their employees to maintain physical distance from other employees or customers. Others required their employees to work different hours due to staggered shifts.

Although such efforts are necessary to protect employees and the community at large from the spread of COVID-19, they do not insulate employers from liability for injuries sustained as a result of such work. These efforts to control the coronavirus do not change the law on legal liability for injuries.

In the current environment, employees are understandably going through a lot of stress. They may be stressed because they've lost their job or are in danger of losing their job. They may be stressed by changes in their working conditions in response to COVID-19. They may also be stressed as a result of fear from the coronavirus itself.

In California, Labor Code § 3208.3(a) provides, "A psychiatric injury shall be compensable if it is a mental disorder which causes disability or need for treatment." If an employee alleges a psychiatric injury as a result of COVID-19, it will be up to the parties and doctors to parcel out the different causes of the injury, whether non-industrial or industrial, and determine whether those causes meet specified thresholds.

ACTUAL EVENT OF EMPLOYMENT

Labor Code § 3208.3(b)(1) states, "In order to establish that a psychiatric injury is compensable, an employee shall demonstrate by a preponderance of the evidence that actual events of employment were predominant as to all causes combined of the psychiatric injury." The phrase "predominant as to all causes" means more than 50 percent. On the other hand, it has been noted that the phrase “actual events of employment” does not provide clear guidance because it is susceptible of many meanings.

In Pacific Gas & Electric Co. v. Workers' Comp. Appeals Bd., the Court of Appeal explained it must be: (1) an "event"; i.e., it must be “something that takes place” in the employment relationship; and (2) the event must be “of employment”; i.e., it must arise out of an employee's working relationship with his or her employer. It concluded that "broad societal events or trends do not satisfy this requirement of section 3208.3 subdivision (b)(1) because they cannot reasonably be said to be events which arise out of the employment relationship."

In that case, the court determined generalized anxiety over one's future in a company struggling to survive during difficult economic times and fear of job loss due to management strategies to achieve increased profitabilty, such as “outsourcing” of jobs to an overseas workforce were not actual events of employment. It determined corporate downsizing, without more, cannot reasonably support an award of benefits, because "Allowing employees to recover benefits for psychiatric injuries caused by this type of stress would subject employers to virtually unlimited liability." The court determined that an employee's stock losses could nto support an award because the investment loss was no different from that experienced by the general investing public. It also determine an employee's concern over the future of his company and his retirement funds did not satisfy § 3208.3(b)(1).

However, the court concluded an employee's reassignment to a new position due to the employer's downsizing which required him to interact with irate customers could support an award. The court noted the evidence established the employee's confrontations with angry, threatening or deceitful customers packed in large numbers in a confining small office caused him specific and identifiable work-related stress. It found these stresses were a direct consequence of the new work assignment, an event of his particular employment, and a compensable cause of his psychic injury.

Thus, although broad societal events or broad concerns over a company's struggle during difficult economic times do not qualify as “actual events of employment” pursuant to § 3208.3(b)(1), changes in the workplace which affect an employee could qualify.