New York Law Broadens Scope for Mental Stress Claims
A new law in New York State is poised to change the landscape of workers’ compensation claims. The legislation, which permits employees to seek workers’ compensation benefits for specific mental injuries linked to “extraordinary work-related stress,” is anticipated to lead to a surge in claim filings and subsequent legal disputes, according to insurance and legal professionals.
S.B. 6635 and A. 5745, companion bills, were officially enacted into law in December. The path to passage was long, with lawmakers spending seven years to include mental stress injuries in workers’ compensation. Despite bipartisan support, the measures faced opposition, with nearly a third of the legislature voting against them.
Courts have grappled with defining work-related stress for years. Recent cases highlight the complexities inherent in the issue.
“This is a major change for New York,” stated Sarah Thomas, the managing partner at Jones Jones LLC, an insurance defense law firm based in New York. “The industry is going to see an increase of mental health claims coming in.”
Ms. Thomas anticipates legal battles will arise regarding the interpretation of “extraordinary” in the legislation. “You still have to show an extraordinary circumstance, which is something that’s been litigated quite a bit” before the New York State Workers Compensation Board and the Appellate Division, she explained.
Todd Jones, a partner at Goldberg Segalla LLP, a Garden City, New York-based firm specializing in workers’ compensation defense, described the law as containing “lazy statutory language,” which almost ensures future litigation. “Businesses are going to subsidize the first few years of this law while those folks who work at the (workers compensation) board try to figure out what the word ‘extraordinary’ means,” he said.
Mark Goldstein, a New York-based partner in the Labor & Employment Group at Reed Smith LLP, noted that most cases would not be straightforward. Employees will have to prove “a causal relationship between the workplace, or particular work activity, and the mental injury that’s claimed.” He continued, “Obviously, that needs to be worked through the administrative process and possibly the courts.”
The American Property Casualty Insurance Association expressed concern that the new law could overwhelm the New York system with mental stress claims. Steven Bennett, the trade association’s vice president of workers’ compensation programs and counsel, stated, “We believe that the (previous) law was very clear based on decades of court rulings that distress had to be much greater than the normal workplace.” He added, “We would have liked to see that continue. There has always been a higher standard for mental stress claims” in New York.
Two bills were proposed this year to attempt to overturn the expanded law. The intention was to limit mental injuries to be compensable for first responders only in “work-related emergencies.” Current New York law already permits first responders to file mental injury claims under a presumption enacted in 2017.
Some experts consider it a positive that mental injury claims might be handled within the workers’ compensation system, instead of through civil courts. Lisa Griffith, a shareholder in the Melville, New York, office of Littler Mendelson P.C., observed, “We see that there may be additional workers comp claims for emotional distress, [yet] with regard to employment litigation there’s a potential defense — workers comp exclusivity may apply either as a complete bar or a set-off.”
Mr. Goldstein mentioned the possibility of double recovery. If a case involves discrimination that results in extraordinary stress, an employee could pursue both workers’ compensation and civil remedies. “The workers comp process would not be the exclusive forum in which their case could be heard. They could still bring a subsequent discrimination claim in court,” he said. “That said, the employee who brings that claim may have to offset any claim damages or settlement by the amount of their workers comp payout.”
Accepting a mental stress claim potentially benefits an employer, but much depends on individual circumstances. “I don’t think there’s a benefit to digging your heels in the ground if there’s no point doing that,” he offered.
Court Decisions Set Precedent
Recent court rulings have established a precedent for mental trauma claims in the workplace. An appeals court, for instance, rejected a post-traumatic stress disorder claim filed by a bus driver. The court ruled that the traumatic event did not exceed routine issues faced by bus drivers in New York City. The bus operator, with 21 years of experience, filed a claim for workers compensation benefits, arguing that she suffered from PTSD after an incident. An unidentified man attempted to board her bus, which was stopped at a red light. He climbed onto the front bumper, damaging the windshield and a side mirror. The Workers’ Compensation Board’s decision was reversed on appeal. The court stated the driver “failed to establish that the stress she experienced as a result of this incident was greater than that experienced by similarly situated bus operators.” The court added that it’s “expected that bus operators could be exposed to unruly individuals and property damage to the vehicle.”
Another New York appeals court disallowed a field repair technician’s 2018 workers’ comp claim for mental stress that she claimed worsened a pre-existing psychological condition. The technician alleged that she “was overworked and exposed to constant intimidation and harassment, with people yelling at her on a daily basis when she arrived for work in the morning, to the point where she feared for her safety.” The appeals court upheld the board’s decision, noting the technician “failed to establish that her alleged injuries were caused by a workplace accident.” The court found the technician had not experienced stress greater than what other similarly situated employees experience in the normal work environment.
