Psychiatric Injuries Caused by COVID-19

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

Some businesses laid off workers due to the uncertainty surrounding COVID-19. Some employers implemented new technology to enable employees to work from home. Some businesses deemed to be essential instructed their employees to maintain physical distance from each other and from customers. Others required their employees to work different hours, staggering 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. Efforts to control the coronavirus do not change the law on 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." COVID-19 has caused many employees to experience a lot of stress. They might be stressed over losing their jobs, or over the threat of such loss. They might be stressed by changes in their working conditions in response to COVID-19. Fear of contracting coronavirus is stressful. Certainly workers who are ill with the disease, or whose family member is ill experience stress.

An employer is not legally liable for all of these stressors. If an employee alleges a psychiatric injury as a result of COVID-19, the parties and doctors must parcel out the different causes of the injury, whether nonindustrial or industrial, and determine whether the causes meet specified thresholds.

ACTUAL EVENT OF EMPLOYMENT

LC 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%. But the phrase “actual events of employment” does not provide clear guidance because it can mean many things. This is discussed in depth in "Sullivan on Comp" 5.30 Psychiatric Injury –– Predominant Cause and Actual Event of Employment.

An employee's industrial physical injury constitutes an actual event of employment for the purposes of § 3208.3(b)(1). As discussed later, although there might be issues as to whether COVID-19 is a "physical injury" for the purposes of psychiatric impairment under § 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 thornier if an employee's psychiatric condition is caused by stress surrounding the coronavirus, rather than by the coronavirus itself.

The courts have held that an employee's subjective perception that the employment was stressful cannot support an award because there must be an actual event of employment, so 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"; that is, it must be “something that takes place” in the employment relationship; and (2) the event must be “of employment”; that is, 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 that 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, such as “outsourcing” of jobs to an overseas workforce for increased profitability, were not actual events of employment. It determined that corporate downsizing alone 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 not support an award because the investment loss was no different from that experienced by the general investing public. It also determined that an employee's concern over the future of his company and his retirement funds did not satisfy the requirement of § 3208.3(b)(1).

The court, however, concluded that due to the employer's downsizing, an employee was reassigned to a new position that required him to interact with irate customers, which could support an award. The court noted that the evidence established that the employee's confrontations with angry, threatening or deceitful customers confined within a small office caused him specific and identifiable work-related stress. It found that the stress was 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

Employees' general concerns about their future and the future of their companies due to the difficult economic times caused by coronavirus do not satisfy the requirements of LC 3208.3(b)(1). Likewise, corporate downsizing and the loss of value of employee company stock due to the coronavirus cannot support an award.

But changes in the workplace in response to the coronavirus that affect employees might qualify. For example, actual events of employment might 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.

So although many employers must fundamentally change their business practices to comply with the government's stay-at-home and social distancing requirements, many such changes probably will be considered actual events of employment. If employees experienced anxiety and stress as a result of working from home, adapting to new technology or having to change their job duties as a result of the coronavirus, they might bring psychiatric claims.

This is not to say that employers shouldn't make changes in response to COVID-19 –– they must protect their employees, and ultimately themselves, from the coronavirus. But they also 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 might argue that they should not be held accountable for changes mandated by the government. In effect, employers could be punished for their efforts to keep employees safe. So far, however, the Workers' Compensation Appeals Board has held that actual events of employment may include actions 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 that she sustained a psychiatric injury. The appeals board concluded that 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 that her arrest and subsequent acquittal needn't be attributable to management to be considered actual events of employment pursuant to LC 3208.3(b)(1).

In both these cases, actions at issue were not attributable to the employer but were directly attributable to the government. The appeals board, however, still concluded that they satisfied the demands of § 3208.3(b)(1). So it's likely that the board will conclude that an employer's action taken in response to a government mandate or recommendation will qualify.

COULD COVID-19 BE A VIOLENT ACT?

Although Labor Code § 3208.3(b)(1) requires actual events of employment to be the predominant cause of a compensable psychiatric injury, § 3208.3(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," per LC 3208.3(b)(3), is "at least 35-40 percent of the causation from all sources combined."

Doctors, nurses or other front-line workers who are required to treat COVID-19 patients might claim that they were directly exposed to a violent act. Many news reports and political figures have used war as a metaphor for the COVID-19 crisis. Health-care workers have been described as soldiers fighting against the coronavirus, and many have treated more patients than they can handle, often without the personal protective equipment they need.

It's unlikely, however, that their exposure to COVID-19 qualifies as direct exposure to a significant violent act. A "violent act" is "characterized by either strong physical force, extreme or intense force, or an act that is vehemently or passionately threatening." This definition makes it unlikely that a health-care worker's prolonged exposure to COVID-19 patients would qualify as a violent act.

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

REFERENCES

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