Psychiatric Impairment Arising from COVID-19

This file does not affect the Copyright Notice that actually appears on the site.

To update that Notice, submit a request to Bartsoz, who created the Wiki.

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 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." Because of COVID-19, 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.

An employer is not legally liable for all of these stressors. 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, the phrase “actual events of employment” does not provide clear guidance because it is susceptible of many meanings.

An employee's industrial physical injury constitutes an actual event of employment for the purposes of § 3208.3(b)(1). As discussed below, although there may be issues as to whether COVID-19 is a "physical injury" for the purposes of psychiatric impairment for the purposes of § 4660.1(c), there is little doubt that an employee who contracts COVID-19 would be allowed to obtain treatment for any psychiatric disorder predominantly caused by it. The issue becomes more difficult if an employee's psychiatric condition is caused by stress surrounding the coronavirus, rather than the coronavirus itself.

The courts have held that an employee's subjective misperception that the employment was stressful cannot support an award, because there must be an actual event of employment, and thus the employee must establish objective evidence of harassment, persecution, or other such basis for alleged psychiatric injury.

In Pacific Gas & Electric Co. v. Workers' Comp. Appeals Bd., the Court of Appeal explained that pursuant to § 3208.3(b)(1), there 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. The Court 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.

Application of Actual Event of Employment Requirement to COVID-19

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). Accordingly, an employee's general concerns about his future and the future of the company due to the difficult economic times caused by coronavirus to not satisfy § 3208.3(b)(1). Likewise, corporate downsizing and the loss of value of an employee's company stock due to the coronavirus could not support an award.

However, changes in the workplace in response to the coronavirus which affect an employee could qualify. For example, actual events of employment could include:

1. A change of job assignment.
2. Changes in work duties or working conditions.
3. Stress related to the implementation of a new computer system.

Accordingly, while many employers were required to fundamentally change their business practices in order to comply with the government's stay at home and social distancing requirements, many of those changes could be considered actual events of employment. To the extent employees became anxious and stresses as a result of working form home, adapting to new technology, or having to change their job duties as a result of the coronavirus, they could potentially bring psychiatric claims.

This is not to say that employers shouldn't make changes in response to COVID-19. They need to protect their employees, and ultimately themselves, from the coronavirus. However, employer must recognize that the changes they make could support a claim for a psychiatric injury.

Should Employers Be Liable for Actions Mandated by the Government?

Employers may argue that they should not be held accountable for changes mandated by the government. In effect, employers are potentially being punished for their efforts to keep employees safe. However, so far, the appeals board has held that actual events of employment may include employment actions even if they are not attributable to the employer.

For example, in one case, an applicant-teacher was investigated by a grand jury for misappropriating funds raised by students. No charges were brought, and the applicant alleged she sustained a psychiatric injury. The appeals board concluded the grand jury investigation was an "actual event of employment" because it dealt with the accusations of wrongdoing in the school fundraising activities.

Similarly, in another case, an applicant was tried and acquitted of workers' compensation fraud. She filed another claim alleging injury to her psyche after the acquittal. The board concluded although her arrest and subsequent acquittal did not need to be attributable to management in order to be considered actual events of employment pursuant to § 3208.3(b)(1).

In both these cases, actions at issue were not attributable to the employer but were directly attributable to the government. However, the appeals board still concluded they satisfied § 3208.3(b)(1). Therefore, it is likely that the appeals board will conclude an employer's action taken in response to a government mandates or recommendations will qualify.

COULD COVID-19 BE A VIOLENT ACT?

Although § 3208.3(b)(1) requires actual events of employment to be the predominant cause in order for a psychiatric injury to be compensable, subdivision (b)(2) slightly reduces this threshold to a "substantial cause" if an employee's "injuries resulted from being a victim of a violent act or from direct exposure to a significant violent act." A "substantial cause" is defined as being "at least 35-40 percent of the causation from all sources combined." (Lab. Code, § 3208.3(b)(3).)

Doctors, nurses or other frontline workers who are required to treat COVID-19 patients could potentially argue that they were directly exposed to a violent act. Many news reports and politicians have used war as a metaphor for the COVID-19 crisis. Healthcare workers are being described as soldiers fighting against the coronavirus, with many treating more patients than they can handle often without the personal protective equipment they need.

However, it is unlikely their exposure to COVID-19 qualifies as direct exposure to a significant violent act. A "violent act" is defined as one that is characterized by either strong physical force, extreme or intense force, or an act that is vehemently or passionately threatening." Given this definition, it is unlikely that a healthcare worker's prolonged exposure to COVID-19 patients would qualify as a violent act.

Nevertheless, § 3208.3(b)(2) only slightly reduces the threshold for a psychiatric injury from greater than 50 percent to 35-40 percent. It is easy to imagine frontline healthcare workers developing post-traumatic stress disorder (PTSD) or other psychiatric conditions as a result of treating COVID-19 patient. The percentage of causation for a psychiatric injury is determined by medical doctors, and it is difficult to imagine a situation where doctors would find such workers had PTSD but did not meet the required threshold.

GOOD FAITH PERSONNEL ACTION

As discussed above, many actions taken by an employer in response to the coronavirus will be considered "actual events of employment" for the purposes of § 3208.3(b)(1). However, not every action taken by an employer will result in liability for a psychiatric injury.

Section 3208.3(h) states, "No compensation under this division shall be paid by an employer for a psychiatric injury if the injury was substantially caused by a lawful, nondiscriminatory, good faith personnel action." It establishes what is commonly called the good faith personnel action defense.

The Court of Appeal has explained, "[T]he Legislature's 'good faith personnel action' exemption is meant to furnish an employer a degree of freedom in making its regular and routine personnel decisions (such as discipline, work evaluation, transfer, demotion, layoff, or termination). If a regular and routine personnel decision is made and carried out with subjective good faith and the employer's conduct meets the objective reasonableness standard, section 3208.3's exemption applies."

Analysis for Good Faith Personnel Action

In Rolda v. Pitney Bowes, Inc., the appeals board en banc established the required analysis when the good faith personnel action defense pursuant to § 3208.3(h) is asserted:

1. The WCJ must determine whether the alleged psychiatric injury involves actual events of employment, and if so, whether competent medical evidence establishes the required percentage of industrial causation.
2. If these first two conditions are met, the WCJ must then decide whether any of the actual employment events were personnel actions.
3. If so, the WCJ must next determine whether the personnel action or actions were lawful, nondiscriminatory and made in good faith.
4. If all these criteria are met, competent medical evidence is necessary as to causation; that is, the personnel action or actions must be a substantial cause, accounting for at least 35 to 40 percent, of the psychiatric injury.

This analysis has been approved by the Court of Appeal. Thus, while judges must determine legal issues regarding whether an employee's psychiatric injury was caused by actual events of employment, whether the events were personnel actions, and whether the personnel actions were lawful, nondiscriminatory and in good faith, causation of the psychiatric injury is a medical issue and the doctor must break down the causes, both industrial and nonindustrial, into percentages.

Personnel Action Defined

A personnel action has been defined by the courts as "conduct either by or attributable to management including such things as done by one who has the authority to review, criticize, demote, or discipline an employee." Therefore, in order to satisfy § 3208.3(h), the action must be undertaken by a supervisor or someone else in a position of authority. However, although a personnel action must be the action of a person in a position of authority, not every action by those people qualify as personnel actions.

The courts have explained, "An employer's disciplinary actions short of termination may be considered personnel actions even if they are harsh and if the actions were not so clearly out of proportion to the employee's deficiencies so that no reasonable manager could have imposed such discipline." "It is unnecessary, moreover, that a personnel action have a direct or immediate effect on the employment status. Criticism or action authorized by management may be the initial step or a preliminary form of discipline intended to correct unacceptable, inappropriate conduct of an employee. The initial action may serve as the basis for subsequent or progressive discipline, and ultimately termination of the employment, if the inappropriate conduct is not corrected.”

Although the courts have explained that what constitutes a personnel action depends on the subject matter and factual setting for each case, they have provided examples personnel actions. Specifically, "Personnel actions may include but are not necessarily limited to transfers, demotions, layoffs, performance evaluations, and disciplinary actions such as warnings, suspensions, and terminations of employment."

On the other hand, the appeals board has held that changes in an employee's working conditions do not to constitute personnel actions. Therefore, it has held that increased workloads or changes in job duties are not personnel actions. Similarly, the implementation of of a new computer system was not consider a personnel action, because it merely changed how the employees were required to complete their duties. Although these actions did not qualify as "personnel actions" pursuant to § 3208.3(h), and thus could not be used to defend a claim, they were considered "actual events of employment" for the purposes of § 3208.3(b)(1), and thus could be used to support a claim.

Therefore, to the extent an employee's psychiatric injury was caused by a termination, layoff, transfer, or reassignment related the COVID-19 crisis, these would likely be considered personnel actions. Shift changes related to the coronavirus would also likely be considered a personnel action.

However, any stress related caused by changed working conditions related to COVID-19 would not be considered personnel actions. Stress related to changes in job duties, new computer systems, or requirements to maintain physical distance are not likely barred by § 3208.3(h). It is also unlikely that requiring an employee to work from home would qualify as a personnel action since this only changes where and how a job is performed.

Ultimately, it will be up a physician to determine whether an employee has psychiatric injury, and if so, break down the different causes of the injury, whether industrial or nonindustrial. If the industrial causes predominate, then the courts will need to determine whether any of the industrial causes were personnel actions, and if so, whether they were a substantial cause of the injury.

Personnel Action Must Be Lawful, Nondiscriminatory, and in Good Faith

Because of the difficult economic times caused by the coronavirus, employers have been forced to make tough personnel decisions. Some employers have laid off some or all of their workforce. Others have been required to transfer and consolidate their workforce. Even though these actions would be considered personnel actions, § 3208.3(h) requires an employer to prove the personnel actions were lawful, nondiscriminatory and in good faith.

The Court of Appeal has explained, "If a regular and routine personnel decision is made and carried out with subjective good faith and the employer's conduct meets the objective reasonableness standard, section 3208.3's exemption applies." It further explained that "[a]ny analysis of the good faith issue ... must look at the totality of the circumstances, not a rigid standard, in determining whether the action was taken in good faith. To be in good faith, the personnel action must be done in a manner that is lacking outrageous conduct, is honest and with a sincere purpose, is without an intent to mislead, deceive, or defraud, and is without collusion or unlawful design."

The appeals board has defined "discrimination" as "[a] failure to treat all persons equally where no distinction can be found between those favored and those not favored." It adds that "the real issue is whether the employer treated applicant differently than others similarly situated without justification..

In deciding which employees to layoff, employers must be careful not to discriminate against an employee. For example, it would not be permissible to layoff only disabled employees while keeping only able bodied workers. Such employees could argued that they were discriminated against in violation of Labor Code § 132a as well as state and federal anti-discrimination law. Additionally, such employee could potentially file stress claims in relation to the layoff which would not be barred by § 3208.3(h) if the actions were deemed to be unlawful and discriminatory.

SIX-MONTH RULE FOR PSYCHIATRIC INJURIES

Generally, in order to bring a a claim for a psychiatric injury, pursuant to § 3208.3(d), the employee must have been "employed by that employer for at least six months." Section 3208.3(d) makes an exception, however, when the "psychiatric injury is caused by a sudden and extraordinary employment condition." The courts have been clear that § 3208.3(d) applies to "all claims for psychiatric injury." The question then becomes whether an employee, who worked less than six months but contracts COVID-19 on an industrial basis, is barred from receiving benefits for a psychiatric injury resulting from the exposure.

A "sudden and extraordinary employment condition" has been described as "the type of event[] that would naturally be expected to cause psychic disturbances even in a diligent and honest employee. In one case, the Court of Appeal noted that "sudden" was defined as "happening without previous notice or with very brief notice : coming or occurring unexpectedly : not foreseen or prepared for." It also defined "extraordinary" as "going beyond what is usual, regular, common, or customary”; and “having little or no precedent and usu[ally] totally unexpected.” However, the court then proceed to broadly state that if "the event or occurrence that caused the alleged psychiatric injury was something other than a regular and routine employment event or condition, that is, that the event was uncommon, unusual, and occurred unexpectedly, the injury may be compensable even if the employee was employed for less than six months.

In another case, the Court of Appeal held that the nature of an injury is not considered in determining whether the psychiatric condition is caused by a “sudden and extraordinary employment condition.” Thus, in order to qualify as an sudden and extraordinary employment condition, the work condition, not the resulting medical condition, must be uncommon, unusual or totally unexpected.

For example, in one case, an contracted a bacterial infection while working at an animal theme park, which ultimately manifested as Guillain-Barre Syndrome, which was described as a rare condition. The appeals board found nothing unusual, uncommon, or unexpected about his employment activities that caused the injury.

The COVID-19 outbreak is certainly "extraordinary," but it would be difficult to classify it as "sudden." Therefore, it is unlikely that contracting COVID-19 alone would constitute a sudden and extraordinary employment condition. Although it is possible to imagine an a scenario where this exception could be met (e.g., contracting COVID-19 after being attacked by someone who has the disease), it would be the underlying employment event, not the COVID-19 diagnosis, that would support the exception. Thus, it is likely that most employee's who contract COVID-19 at work during the first six months of employment would be able to pursue a claim for psychiatric injury.

Nevertheless, even if a psychiatric injury is barred by § 3208.3(d), an employee could still receive psychiatric treatment. This is because of the general rule that an employer is required to treat a nonindustrial condition if it is necessary to cure or relieve an employee from the effects of an industrial injury. So, even if an employee has worked for less than six, he or she could potentially receive treatment for a psychiatric injury flowing from a COVID-19 diagnosis.

PSYCHIATRIC IMPAIRMENT ARISING FROM COVID-19

Even if an employee is able to establish a psychiatric disability as a result of COVID-19, there will be issues as to whether the employee could receive permanent impairment for it. For injuries on or after Jan. 1, 2013, Labor Code § 4660.1(c) states that “the impairment ratings for sleep dysfunction, sexual dysfunction, or psychiatric disorder, or any combination thereof, arising out of a compensable physical injury shall not increase.” This statute reflects the Legislature's intent as part of SB 863 to eliminate questionable claims of disability when alleged to be caused by a disabling physical injury arising out of and in the course of employment.

COVID-19 as a Physical Injury

As discussed above, COVID-19 can results in psychiatric injury in multiple ways. An employee could be stressed from having contracted COVID-19 or could be stress by workplace changes in response to COVID-19. Because § 4660.1(c) only bars impairment for a psychiatric disorder "arising out of a compensable physical injury," it only applies to psychiatric injury as a compensable consequence of his physical injury. It does not apply to psychiatric injuries directly caused by the employment.

Psychiatric injuries caused by "actual events of employment" pursuant to § 3208.3(b)(1), other than physical injuries, would not be barred. That is, psychiatric injuries caused by changes in work duties or working conditions due to COVID-19 would still be compensable. Furthermore, post traumatic stress disorder suffered by hospital workers or other emergency personnel handling COVID-19 patients would not be barred.

It is also highly questionable whether COVID-19 would constitute a "physical injury" for the purposes of § 4660.1(c). Employers could argue that because COVID-19 causes physical symptoms, it could be considered a "physical injury." The appeals board has held that industrially-related obesity qualifies as physical injury under § 4660.1(c), because it is physical manifestation, even if it did not arise out of a physical trauma. Therefore, if the accepts that physical manifestations are enough to satisfy the physical injury requirement, COVID-19 could be considered an occupational disease.

However, the Labor Code differentiates between injuries and diseases. Section 3208 specifies an injury includes "any injury or disease." (Emphasis added.) Likewise, §§ 5412 and 5500.5 use the phrase "occupational diseases or cumulative injuries." (Emphasis added.) Section 3208.1 defies a cumulative injury as resulting from "repetitive mentally or physically traumatic activities." Moreover, the courts have distinguished between occupational diseases which require "exposure," and cumulative injuries which require "trauma." Therefore, because the law recognizes a distinction between injuries and diseases, injured workers can argue that § 4660.1(c) does not apply to psychiatric injuries flowing from COVID-19, because COVID-19 is a disease not a physical injury.

Limitation Only Applies to Permanent Impairment

Even if COVID-19 is considered a physical injury, § 4660.1(c) only precludes permanent impairment. It expressly provides that it does not limit the ability of an injury employee to obtain treatment for a psychiatric disorder that is a consequence of a physical injury. It also does not limit an employee's ability to receive temporary disability benefits.

Exceptions to the Bar on Permanent Impairment

Additionally, even if COVID-19 is considered a physical injury under § 4660.1(c)(1), subdivision (c)(2) allows an employee to receive an increases impairment rating for psychiatric injury flowing from a physical injury if the psychiatric injury resulted from either:

1. Being a victim of a violent act or direct exposure to a significant violent act; or
2. A catastrophic injury, including, but not limited to, loss of a limb, paralysis, severe burn, or severe head injury.

In Wilson v. State of CA Cal Fire, the appeals board en banc held the first exception focuses on the mechanism of the injury, while the second exception focuses on the nature of the injury. In that case, the appeals board defined a "violent act" pursuant to § 4660.1(c)(2)(A) as "an act that is characterized by either strong physical force, extreme or intense force, or an act that is vehemently or passionately threatening." The appeals board held that a firefighter who fought a wildfire for several hours, during which time he had prolonged exposure to fumes and smoke resulting in an adverse physical reaction in multiple body parts, did not sustain an injury that resulted from a violent act.

Because COVID-19 is passed insidiously from person to person, it will be difficult for employees to establish the first exception is met. Short of contracting COVID-19 after being attacked by someone who has the disease, it is unlikely that psychiatric injury resulting from COVID-19 exposure would qualify as a violent act.

However, COVID-19 could potentially be a "catastrophic injury." While most people have minor symptoms and fully recover from COVID-19, for some people, the disease could cause permanent damage to the lungs. In Wilson, the appeals board concluded the firefighter's injury was catastrophic where the evidence established his injury was serious and life-threatening, he was placed in a medically-induced coma, he suffered both renal and respiratory failure, and his physical injury resulted in permanent disability that rated at 66 percent.

Thus, it is foreseeable that even if COVID-19 is considered a physical injury under § 4660.1(c)(1), some employees will be able to receive impairment for a psychiatric injury flowing from it, if the disease results in significant hospitalization and permanent impairment. This would depend on the factual setting for each case.