April 22, 2017

Mental health compensation bill removes objective standards

The Vermont Legislature appears poised to pass legislation this session that will broaden workers’ compensation coverage of mental injury claims.

The bill, H.197, contains language that would create a presumption that a professionally diagnosed mental health condition arose out of the course of employment for a class of employees including police officers, rescue or ambulance workers, and firefighters. The bill also proposes to expand the ability of the rest of the Vermont workforce to file stress-related claims.

Providing stronger protections in the Workers’ Compensation Act for fire, police and rescue workers is based in sound logic. These people perform some of the most difficult, vital jobs in our society, and on occasion witness horrific scenes that affect them deeply.

From an employer/insurer perspective, it is the other provision, generally broadening compensable mental injuries for all Vermont workers, that is troubling. It raises questions about where the line will be drawn.

In workers’ compensation parlance, there are three categories of what are considered stress-related “mental” injury claims. First, there is the mental stimulus which results in a physical injury, such as when stress causes a heart attack. Secondly, there are those cases where a physical trauma results in a mental injury, which is probably the most accepted classification. These types of injuries are universally considered compensable. The final and most complex category of mental stress claims are those involving a mental stimulus with a resulting mental injury. These are referred to as “mental-mental” claims, and are the type that the Legislature is seeking to address.

For decades, the Department of Labor has required a showing of something other than ordinary stress in the workplace in order for a mental injury claim to be compensable. In the 1995 decision Baker v. Burlington Public Schools, the commissioner held that a psychiatric disability cannot be compensable without evidence the job-related stress complained of actually existed, and that it was the burden of the injured worker to show both that the mental injury alleged was caused by actual conditions at work and those conditions or stressors are of a significantly greater dimension than the daily stresses encountered by all employees. This is referred to as an “unusual stress” test. The adoption of this standard was upheld by the 1996 Vermont Supreme Court decision Bedini v. Frost. The court deferred to the commissioner’s adoption of this test based on “reasonable policy concerns,” including that there is a high degree of uncertainty in diagnosing the cause of a mental injury; that the standard requires more objective inquiry rather than reliance on an injured worker’s subjective impressions; that the standard provides protection against nondetectable fraudulent claims; and that it protects against the conversion of workers’ compensation benefits into general health insurance.

In the 2003 decision Crosby v. City of Burlington, the court further refined the unusual stress test, noting that with the use of the language “all employees,” Bedini had failed to carefully define the control group whose stresses would be compared to the injured worker’s stresses. This decision discussed different standards employed around the country before adopting what is known as the “similarly situated standard.” This standard measures an injured worker’s stress against that of all other workers performing the same job. The court noted that this standard “offers the practical advantage of allowing both parties to focus on producing evidence of actual working conditions in a specific field, ‘rather than trying to take into account the level of stress placed on the workforce as a whole.’”

What is currently being considered by the Legislature will take the law right back to where it stood pre-Crosby by removing the defined control group for comparison of on-the-job stress.   

As the legislation is currently written, the worker claiming a mental condition resulting from a work-related event or work-related stress will have a compensable work injury if they are able to show: 1) the event or stress was “extraordinary or unusual in comparison to pressures and tensions experienced by the average employee across all occupations;” and 2) the work-related event or stress, and not some other event or stress, was the “predominate” cause of the mental condition. However, a mental condition will not be considered a compensable work injury if it results from “any disciplinary action, work evaluation, job transfer, layoff, demotion, termination, or similar action taken in good faith by the employer.”        

Steve Monahan, director of workers’ compensation for the Department of Labor, when asked about the effect this broadening of the language would have by a local news source, was quoted as saying “The definition does appear broader than we’ve applied, and to that extent, it would increase costs, if there were claims. It would raise costs across the board. It’s just hard to predict how much.”

Legislators were quoted in the news in recent weeks rejecting the belief that this change will raise costs for insurers and, eventually, employers, due to increases in premiums. It’s unclear from what position of experience or concrete evidence their dismissive conclusions are drawn.

From a practitioner’s standpoint, the broadening of the language for all employees and removal of an objective standard for measuring stress claims will not only lead to a rise in mental-mental claims being found compensable, but also more claims being brought and litigated at increased costs to employers, carriers and presumably the state.  It also removes any objective measurement of a worker’s stress from the equation. 

In Crosby v. City of Burlington, the court explained why a control group consisting of the entire “working world” was a poor standard. The truth to that rationale hasn’t changed: Using the entire “working world” as the measure “would offer little in the way of assuring the validity of claims. It is difficult to imagine that a claimant or employer under an “all employees” rubric would not be able to produce some witness from the workplace whose “work-related stress is either significantly less or significantly greater than the stress experienced by the claimant.”   

Hopefully, there is still time for wiser heads to prevail this session and leave the “similarly situated” employee standard for mental-mental claims intact. 

Glenn S. Morgan is an attorney with Ryan Smith & Carbine in Rutland, where he is the supervising partner of the firm’s workers’ compensation group. Associate attorney Stephanie P. Romeo contributed to this column. 

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