Karen McAndrew, Robert McKearin, Editors
Dinse, Knapp & McAndrew, P.C.

Vol. 13, No. 5
July 2008

WORKERS' COMP

When is worker entitled to workers' comp for work-related stress?

Most jobs have some degree of inherent stress. All of us from time to time feel overwhelmed by the press of work, annoyed at the behavior of coworkers, displeased with treatment by supervisors, and disappointed by criticism based on performance. But when do the physical and psychological reactions to problems at work cross over to become work-related injuries for which an employee is entitled to workers' compensation? The Vermont Department of Labor recently addressed that question.

Bad chemistry (or poor performance) = stress

In the case, a worker claimed that the stress to which she was subjected in her job as a secretary/receptionist in the loan department of a bank in St. Johnsbury resulted in significant symptoms of stress disorder. The worker, known as J.C. in the decision, began working at the bank in 1996. Her job duties included greeting customers from her seat at the department's front desk, sorting and distributing the department's mail, answering the phone, typing, filing, and performing other secretarial and administrative support tasks for loan officers and nondepartment staff. She was originally hired through a temporary agency and was offered a permanent full-time position, which she accepted on the condition that Cynthia Wheeler, who was an underwriting/loan supervisor, not be her direct supervisor.

During J.C.'s tenure as a loan department secretary/receptionist, she worked for several supervisors and received mixed performance reports. Because of various changes in the office and in spite of the precondition J.C. had imposed when she took the job, Wheeler became her direct supervisor.

The job deficiencies continued. Among other things, it was recommended that J.C. compile a list of "frequently asked questions" so that she could devise appropriate responses to callers. She failed to do so. Other criticisms were made, and she didn't respond well to Wheeler's supervision. J.C. felt that Wheeler was constantly watching her and subjected her to far greater scrutiny than she did any of her coemployees.

J.C. testified at the hearing that Wheeler previously took away tasks she did well and reassigned them to other employees. She stated that "no matter what I did, it wasn't right." She also testified that Wheeler told her that her coemployees didn't like her and chastised her in front of them for mistakes she believed weren't her responsibility. She further alleged that Wheeler reprimanded her for reading the mail before distributing it, even though she needed to do so in order to sort it properly. There were also issues about her ability to participate in office events because she wasn't allowed to leave her workstation. She testified that Wheeler treated her in a hostile, disrespectful, and demeaning manner.

Wheeler testified that the supervisory decisions she made weren't at all personally motivated but rather were required because of J.C.'s role as the first point of customer contact in the loan department. The issue of workstation tidiness was important, as was J.C.'s remaining at her desk during lunchtime because she was allowed to leave earlier at the end of the day. Since the front desk had to be covered at all times, there was a problem with her leaving the reception area.

The deteriorating relationship between J.C. and Wheeler further worsened when, because of a reorganization in the loan servicing department, J.C.'s receptionist duties were reassigned to another employee and she assumed more loan processing functions instead, which, of course, led to more contact with her nemesis. Wheeler requested that all department employees keep a daily log of the job-related tasks they performed and the estimated time spent on each task. J.C. didn't produce her log initially, and when she did submit it, she said Wheeler criticized it in front of a coemployee as being incomplete.

J.C. felt that she was being singled out by Wheeler's criticism and felt tremendous pressure from her to complete the tasks within the appropriate time periods. She testified that Wheeler informed her of her new job responsibilities one afternoon in June 2004 and that she handled the matter unprofessionally, given the significant changes to be implemented in her job. She was informed in the presence of a coemployee just before she was to leave for an appointment. She also testified that she received minimal training from Wheeler before assuming responsibility for performing the daily "block."

J.C. also felt that Wheeler supervised her work product more closely than she did that of other employees. For example, Wheeler required her to produce the files she had worked on throughout the day so Wheeler could review them and document how much work she had accomplished. Again, J.C. felt that Wheeler was singling her out for greater scrutiny without any justification.

In September 2004, Wheeler began meeting with J.C. on a weekly basis to review her progress on various job tasks. The bank's vice president of HR also attended the meetings. J.C. testified that the meetings weren't constructive and that she continued to feel that no matter what she did, it wasn't right.

On November 9, 2004, J.C. went to her primary care physician, complaining of atypical chest pressure and stating that she had been experiencing stress-related symptoms all summer long, including sleep deprivation, chest pains, and hair loss. Her physician, Dr. Sharon Fine, concurred that her symptoms were indeed stress- related and referred her to a mental health counselor for stress management.

On November 19, J.C. left work, stating that "she could not take any more." Wheeler had scheduled a weekly meeting with her and the vice president for the following Monday or Tuesday, but she felt she was "at the end of her rope" and unable to attend. She called Fine, who secured an appointment for her with a mental health counselor. She hasn't worked since November 19, 2004. Initially, the bank placed her on medical leave but ultimately terminated her employment.

Her perception is her reality

The mental health counselor, Catherine Maier, first evaluated J.C. on November 22, 2004, reporting that she was experiencing harassment in a "hostile work environment" caused by a supervisor who treated her with disrespect. As a result, Maier reported, J.C. felt emotionally battered and was exhibiting symptoms of depression and anxiety. The counselor determined that she was temporarily totally disabled from working, a conclusion with which Fine agreed.

J.C. continued to undergo weekly counseling sessions. The symptoms didn't abate and in fact appeared to worsen with social withdrawal, agoraphobia, anxiety attacks, nightmares, and difficulty focusing even on simple tasks. Maier diagnosed her as suffering from posttraumatic stress disorder. J.C. also treated with Dr. Zimmerman, a psychiatrist, who diagnosed her as suffering from traumatic sleep disorders, somatization disorder, and adjustment reaction with physical symptoms similar to those present with posttraumatic stress disorder.

None of J.C.'s treatment providers ever spoke directly with Wheeler or any other bank personnel about the stressful environment she described and on which they based their diagnoses. None of them was able to testify about any independent verification of the conditions at work. The Vermont Department of Labor noted that the record did supply some objective verification of Wheeler's supervisory style and the stress it might have triggered among her subordinates, including J.C. Generally, however, her performance evaluations were favorable and reflected steady growth in both supervisory responsibilities and leadership qualifications. Wheeler admitted that her relationship with J.C. was "not an easy one" and that at times she perceived J.C.'s demeanor to be "defensive." Other employees testified that in their experience with J.C. , she was resistant to change.

J.C. had no significant medical history of depression, anxiety, or other psychological issues before November 2004. Although she had had other psychological stressors in her life since that time, none affected her in the way that her experience at the bank did.

But it wasn't enough to meet her burden of proof

The Department of Labor found that the evidence established that J.C.'s perception of her work environment was so stressful that it resulted in a psychological injury.

In these types of cases, the worker has the burden of establishing that she suffered a psychological injury at work. This type of claim falls into the category of "mental-mental health claims." For such a claim to be compensable, the employee first must show that the workplace stress she faced was significant and objectively real. In addition, she must establish that the stress was unusual or extraordinary that it amounted to something "of significantly greater dimension" than that encountered by other employees performing similar work. When there hasn't been a physical injury or a physical manifestation of an injury (e.g., a rash, headaches, or other physical manifestation), the worker has a higher burden to overcome.

With that standard in mind, the Department of Labor has previously held that stress resulting from bona fide personnel actions isn't compensable. In addition, decisions to hire, fire, transfer, reallocate workforce resources, or impose disciplinary action can't be used by themselves to establish a compensable mental stress claim, no matter how inherently stressful the events might be.

In this case, J.C.'s stress claim was based on the allegation that Wheeler misused her role as supervisor to bully, demean, and mistreat her beyond the reasonable exercise of her supervisory authority. She claimed that Wheeler went beyond her role of supervisor and trespassed instead into malicious, spiteful, or morally reprehensible behavior. The Department of Labor noted that "all employees must expect to deal from time to time with supervisors whose management style exasperates them, or with whom they simply do not see eye to eye. . . . No employee, however, should have to subject him or herself to behavior that is so malevolent or deliberately harmful as to undermine any legitimate managerial motive whatsoever."

In this case, the department determined that J.C. failed to establish that Wheeler's treatment crossed over that line. Her actions were legitimate policy considerations, were specific to her job duties, and represented reasonable managerial responses to her job performance. The fact that Wheeler could have been a little softer in her manner and could have tried to work with J.C.'s personality wasn't sufficiently extraordinary or outrageous by itself to establish a compensable stress claim.

The Department of Labor concluded by stating: "[The] stress to which [J.C.] was subjected may have been both significant and objectively real. It is not difficult to believe that when one's job duties necessitate differential treatment or when the quality of one's job performance is questioned, work-related stress might result. Having been precipitated by bona fide business and managerial considerations, however, stress of this kind is not so unusual as to be of a 'significantly greater dimension' than that experienced by other similarly situated employees. Although work related, it is not compensable." J.C. v. Passumpsic Savings Bank (March 11, 2008).

Take-away for employers

Although this worker wasn't able to establish entitlement to workers' comp benefits under these facts, employers and supervisors need to be aware of the effect their treatment of employees might have on their psyches. Obviously, blatantly unfair, discriminatory treatment in which workers are singled out from other employees must be avoided at all costs. However, even treatment below that level that's demeaning, rude, disrespectful, and consistently and unnecessarily cruel can't be tolerated.

There are always medical providers, as in the case with J.C., who will support the worker's contention that she has been unfairly discriminated against in such a way that is extraordinary and goes beyond normal work behavior. The defense to those claims is that (1) the treatment wasn't extraordinary or unusual and (2) it constituted bona fide personnel actions necessary to the employer's business. Even though the worker has the burden of establishing that type of claim, the time the employer spends defending it and the risk of substantial exposure to significant workers' comp benefits should make all employers aware of the need to educate their supervisors and managers about the importance of treating employees fairly and respectfully. Of course, whether that would have made a difference in this case is an open question at best. Maybe J.C. was just in over her head and shouldn't have gotten the position in the first place.

You can research job-related stress or any other employment law topic in the subscribers' area of www.HRhero.com, the website for Vermont Employment Law Letter. Access to this online library is included in your newsletter subscription at no additional charge.

Copyright 2008 M. Lee Smith Publishers LLC

VERMONT EMPLOYMENT LAW LETTER does not attempt to offer solutions to specific problems, but rather to provide information about current developments in Vermont and federal employment law. Inquiries about specific problems should be addressed to the labor or employment law attorney of your choice. Vermont does not certify lawyers as specialists in labor and employment law or other areas of concentration.