By Harlan J. Crossman and Alan S. Baskin
The compensability of mental injuries in workers' compensation cases has been clouded by the recent case of Murphy v. Industrial Commission, 160 Ariz. 482, 774 P. 2d 221 (Ariz. 1989). With the publication of one opinion, the Arizona Supreme Court has overruled cases that were the backbone of mental injury case law, and at the same time repealed A.R.S. §23-1043.01(b). This has left the present state of law in question.
Mental injuries are categorized as: mental-mental injuries (those which are emotional or psychiatric problems caused by mental stress or pressure), and mental-physical injuries (those which are physical problems caused by emotional stress or pressure). In Murphy v. Industrial Commission, the court recognizes this long-accepted distinction, but ignores this distinction in order to reach the results of its decision.
In Brock v. Industrial Commission, 15 Ariz. App. 95, 486 P. 2d 207 (1971), the first mental-mental injury case in Arizona, the Arizona Court of Appeals recognized that work-connected emotional stress, unaccompanied by physical exertion, could result in a compensable disability. In Brock, the claimant was a truck driver who backed up his truck and killed a woman. The issue in Brock was whether mental stress, unaccompanied by physical force or exertion, could be the basis of an accident within the purview of workers' compensation law. The court determined that in Arizona the definition of "injury by accident" included any unexpected injury-causing event so long as it was work-connected. The court noted that the injuries suffered by both the claimant and the deceased arose from the same event. The court concluded that, if the collision and injury were unexpected to the deceased, then the mental injuries incurred by the claimant were also unexpected, and thus accidental.
In Shope v. Industrial Commission, 17 Ariz. App. 23, 495 P. 2d 148 (1972), the court of appeals held that a mental breakdown due to a gradual buildup of emotional stress was not an unexpected injury-causing event. The court distinguished Brock because there was no unexpected injury-causing event, but rather a buildup of emotional stress. In denying benefits in Shope, the court stated:
The conflicts which petitioner experienced were part of the usual, ordinary and expected incidents of his employment. . . [T]o grant petitioner his requested relief would literally open Pandora's Box permitting compensation to any disgruntled employee who leaves his job in a huff because of an emotional disturbance. - Id. at 24, 495 P. 2d at 150.
In Fireman's Fund v. Craig, 119 Ariz. 51, 579 P. 2d 555 (1978), the Arizona Supreme Court nearly opened up Pandora's Box. The Court rejected the argument that a mental-mental injury must be traceable to exertion or physical impact, and held that a disabling mental condition was compensable if it was an injury by accident in a work-connected activity. The court stated:
[B]y definition, an injury is caused by accident when the resulting injury is unexpected. While respondent's office duties were routine, the result of the delegation to her of excessive responsibilities resulted in the unexpected, her mental breakdown. We think that the respondent's disability was sufficiently unanticipated to be called "unexpected" and, hence, accidental within the meaning of §23-102(B). - 119 Ariz. At 53, 579 P. 2d at 557.
This seemed to provide recovery for every work-connected nervous breakdown. The Arizona Supreme Court ignored the fears expressed by the court of appeals in Shope. This broad statement effectively abolished the unexpected requirement because the prospect of an "expected" nervous breakdown is remote at best.
In Sloss v. Industrial Commission, 121 Ariz. 10, 588 P. 2d 303 (1978), decided approximately six months after Fireman's Fund, the Arizona Supreme Court narrowed its holding in Fireman's Fund. In Sloss, the claimant was a highway patrolman who filed two claims. The first claim was for an emotional condition, chronic anxiety. The second claim contended that the chronic anxiety resulted in a physical condition known as gastritis. The gastritis was a physical injury which was caused by mental stress, i.e., mental-physical injury. The court treated this as a mental-mental injury and denied benefits, and in so doing did not distinguish between the two claims. The court specifically limited Fireman's Fund:
Fireman's Fund does not mean that every emotional condition, even though work-related, is compensable . . . [T]o qualify as an injury by accident, the condition must have been produced by the unexpected, the unusual, or extraordinary stress. - 121 Ariz. At 11,588 P. 2d at 304.
Sloss' claims were non-compensable because Sloss was exposed to stress no greater than that experienced by other highway patrolmen.
In 1980, the Arizona Legislature, in order to prevent another Firemen's Fund, codified Sloss insofar as Sloss pertained to mental-mental injuries, and added an additional requirement that the unexpected event be a substantial contributing cause of the mental injury. A.R.S. §23-1043.01(B) provides:
A mental injury illness or condition shall not be considered a personal injury by accident arising out of and in the course of employment and is not compensable pursuant to this chapter unless some unexpected, unusual or extraordinary stress related to the employment or some physical injury related to the employment was a substantial contributing cause of the mental injury, illness or condition.
Although the legislature failed to enact a similar provision regarding mental-physical injuries, the courts followed Sloss' cue. In Pima Community College v. Industrial Commission, 137 Ariz. 137, 669 P. 2d 115 (Ct. App. 1983), the claimant, like the claimant in Sloss, sought benefits for stress-induced abdominal problems. The claimant was a male librarian under the supervision of a female supervisor. The supervisor singled out the clamant, because of his gender, for abuse and harassment. Among other abuses, claimant's supervisor swore and threw things at him. These highly stressful job conditions aggravated claimant's pre-existing abdominal problems.
The Arizona Court of Appeals held A.R.S. § 23-1043.01(B) inapplicable because the stress had resulted in a physical injury and not a mental injury. The court followed Sloss and held that a physical injury caused by mental stress and strain was compensable if the employee suffered stress and strain that was greater than that experienced by his co-workers. The stress had to be unexpected, unusual, or extraordinary. The court found the claim compensable because the claimant experienced unexpected, unusual, and extraordinary stress in comparison with his co-workers. Unlike Sloss, Pima Community College revealed a claimant who was exposed to much more than "usual, ordinary and expected incidents of his job."
In LaPare v. Industrial Commission, 154 Ariz. 318, 742 P. 2d 819 (Ct. App. 1987), the claimant had been a Trailways bus driver for over twenty years. In June or July of 1984, Trailways informed its drivers that the company was undergoing financial hardship, and that the company wanted to reduce the drivers' pay. Over the course of the summer, the claimant heard several rumors regarding, among other things, the possibility of pay cuts and layoffs. After an impromptu meeting in El Paso, Texas, the claimant suffered a nervous breakdown due to stress caused by the fear and anxiety of losing his job. He sought benefits under A.R.S. § 23-1043.01(B). The Arizona Court of Appeals denied benefits on the grounds that the stress the claimant was exposed to was no greater than that experienced by his fellow employees. The court reasoned that notice of a possible job loss or reduction in pay was not sufficiently unusual, unexpected, or extraordinary in modern society to warrant compensability as an industrial injury.
Thus, before the Arizona Supreme Court's decision in Murphy v. Industrial Commission, Arizona had precisely codified and refined its law regarding mental-mental and mental-physical injuries. The courts had developed an easily applied method of jurisprudence in these areas. Mental-mental and Mental-physical injuries were only compensable if the stress causing the injury was unusual, unexpected, or extraordinary.
MURPHY V. INDUSTRIAL COMMISSION
Kenneth Murphy worked at Honeywell for ten years. Murphy was a good employee who never complained and who enjoyed his work. During the summer of 1985, Honeywell was experiencing financial difficulties. Word spread through the plant that Honeywell had to lay off or displace a number of employees. Murphy feared being laid off, or a possible pay cut. He also was concerned about being transferred to another unfamiliar job with Honeywell. Murphy was so preoccupied with these rumors that he had been unable to sleep for two months prior to his injury.
On August 8, 1985, Murphy's supervisor, Jim Enk, informed Murphy that he was being transferred to another job. Enk also told Murphy that his salary would be cut by one-third and that Murphy would have to work for a new manager who was known to be difficult to work with. Murphy asked Enk about taking early retirement, but Enk told him he still had a job with Honeywell. After this discussion, as Enk walked away, Murphy fell over backwards, struck his head on a tile-covered concrete floor, and suffered an epidural hematoma. The administrative law judge adopted the testimony that
Murphy fainted because of the emotional shock he suffered upon hearing the news of his displacement. Murphy has been in a coma since he fell and is expected to remain in a vegetative state permanently. The administrative law judge held that A.R.S. § 23-1043.01(B) governed, and denied compensability.
The Arizona Court of Appeals affirmed the administrative law judge, but on different grounds. Murphy v. Industrial Commission, 157 Ariz. 493, 759 P. 2d 639 (Ct. App. 1988). It reasoned that § 23-1043.01(B) was not applicable because Murphy suffered a physical injury rather than a mental injury. However, after reviewing Sloss and its progeny, the court held that a physical injury caused by mental stress is compensable only when the stress is unusual, unexpected, or extraordinary. The court reaffirmed the notion that, although layoffs and plant closures may expose workers to emotional distress, they are not sufficiently unusual, unexpected, or extraordinary to warrant compensability as an industrial injury. The court quoted the following excerpt from Larson on Workmen's Compensation Law:
Apart from some distinctly unusual accompanying circumstances, such as being under investigation, mere anxiety over job loss has failed to produce awards in the great majority of reported cases. The basic idea is that, in a private enterprise system, the possibility of job loss is a normal and expected feature of employment life, as is also the attendant insecurity and worry. - 157. Ariz. at 496, 759 P. 2d at 642.
The court noted the evidence established that all Honeywell employees were aware of pending layoffs and changes. It also noted that on the day Murphy fell, other plant employees, some from the same floor, also learned of layoffs, pay cuts, displacements and transfers. The court held that Murphy's physical injury was not compensable because it was not brought on by unusual, unexpected, or extraordinary stress.
The Arizona Supreme Court reversed the court of appeals and held Murphy's claim compensable. It agreed with the court of appeals' determination that A.R.S. § 23-1043.01(B) was not applicable to Murphy's injury. However, it found the claim compensable under the general compensation statute, A.R.S. § 23-1021, which provides that every employee is entitled to workers' compensation if they have an injury which arises out of and in the course of employment.
The court distinguished Sloss, Pima Community College, and LaPare by finding that there was no "accident" in those cases. Relying on the broad definition of "accident" found in Firemen's Fund, the court determined that Murphy's injury was "by accident" under A.R.S. § 23-1021. It held that any injury was by accident when either the external cause or the resulting injury were unexpected. The court then stated the obvious, that Murphy's injury was caused by the fall, which was caused by Murphy's reaction to being transferred. Murphy's injury was by accident because both the external cause (the fall and the work stress) and the injury were unexpected.
The court concluded that the accident arose out of and in the course of Murphy's employment. The injury met the arising out of requirement because it resulted from work-related stress.
MURPHY OVERRULES SLOSS AND PIMA COMMUNITY COLLEGE
In Murphy, the court attempted to distinguish Sloss and Pima Community College. It reasoned that the facts in Murphy were distinguishable because, unlike Sloss and Pima Community College, Murphy involved an accident under A.R.S. § 23-1021(C). The distinction is without substance. Sloss, Pima Community College, and Murphy all involved mental-physical injuries, even though the court in Murphy designated Sloss as a mental-mental case. The main difference between these three cases is that the court in Murphy rejected the unusual, unexpected, and extraordinary requirement for mental-physical injuries set forth in Sloss and Pima Community College.
Sloss involved a mental-physical injury similar to Murphy. The claimant in Murphy sustained a physical injury when he fell and hit his head. The claimant in Sloss suffered from gastritis. Gastritis, by definition, is "an inflammation of the stomach," Dorlands Illustrated Medical Dictionary, 633-634 (25 th Ed. 1974), and physical injury is "an injury to the body, not to the mind." Webster's New Twentieth Century Dictionary, 2 nd Ed., 1983. Obviously, Sloss' claim for gastritis involved a mental-physical injury. In Sloss, the claimant's emotional and physical injuries were not compensable because they were not brought on by unexpected, unusual, or extraordinary stress.
In Pima Community College, the librarian suffered from a work-related stress that aggravated his abdominal condition. The claimant's injury was considered a mental-physical injury because the mental stress caused an abdominal condition, which is a physical condition. The court in Pima Community College relied on Sloss for the proposition that, to be compensable, a mental-physical injury must be brought on by unusual, unexpected, or extraordinary stress. The court awarded benefits after determining that the stress suffered by the librarian was unusual and extraordinary stress compared to that experienced by his fellow employees. Before Murphy, mental-physical injuries were compensable only if they were brought on by unusual, unexpected, or extraordinary stress. In essence, Murphy revived the reasoning used in Firemen's Fund. In Firemen's Fund, the court held that the resulting emotional condition was an injury by accident so as to meet the unexpected requirements. The court held that Murphy's injury was "by accident" under A.R.S. § 23-1021 because the "external cause and the resulting injury were unexpected." The external cause was the job stress, while the resulting injury was the fall.
The court in Murphy failed to explain why the injuries in Sloss and Pima Community College were not similarly unexpected. In both of those cases, work-related stress led to an unexpected event; gastritis in Sloss, and an abdominal condition in Pima Community College. In Murphy, the court has ostensibly abolished the unusual, unexpected, or extraordinary requirement for mental-physical injuries. Under a Murphy analysis, the claims in both Sloss and Pima Community College would be compensable. The second-to-last paragraph in Murphy bears out this proposition:
Furthermore, it is settled law that an employer takes his employee "as is," that is, with whatever peculiar vulnerabilities to injury the employee may have, and that "an identifiable incident or strain need not be unusual or severe to support compensation if the particular employee succumbs to it." - 160 Ariz. at 486, 774 P. 2d at 225.
If one doesn't need an unusual, unexpected, or extraordinary stress as stated in Murphy, and our court has readopted the Firemen's Fund reasoning, then Sloss and Pima Community College have been overruled.
MURPHY OVERRULES LAPARE AND JUDICIALLY REPEALS A.R.S. § 23-1043.01(B)
LaPare was a mental-mental injury case decided under A.R.S. § 23-1043.01(B). A mental-mental injury is compensable under § 23-1043.01(B) if the stress causing the injury is unusual, unexpected or extraordinary. The LaPare court held that a bus driver's nervous breakdown due to the fear of losing his job was not compensable because unusual, unexpected, or extraordinary stress was not a substantial contributing cause of the breakdown.
The injuries in LaPare and Murphy were brought on by nearly identical situations:
1. Both claimants feared losing jobs they had held for most of their working lives;
2. Both claimants were aware of a possible job loss or job change several months before they suffered their injuries;
3. Both claimants were victimized by general work force reductions due to economic hardships; and
4. Both claimants were injured by stress brought on by the possibility of losing their present jobs, not stress related to their performance of those jobs.
The court in Murphy abruptly dismissed these similarities and distinguished LaPare as a mental-mental injury case, while Murphy was a mental-physical injury case. In Murphy, the cause of claimant's hitting his head was a demotion and a change in position, which in LaPare was held not be compensable because it was not unusual, unexpected, or extraordinary.
The court in Murphy argued that the physical injury is an accident because it is unexpected. In Brock and Firemen's Fund, both mental-mental cases, the court held that mental breakdowns were injuries by accident because the results were unexpected. By accepting the reasoning of Brock and Firemen's Fund, the court is disregarding or overruling the LaPare case. After declining to follow LaPare, the court in Murphy relied upon a Massachusetts case entitled Kelly's Case, 394 Mass. 684, 477 N.E. 2d 582 (1985).
The claimant in Kelly's Case had been employed by Raytheon Corporation for twenty-two years. She ran the company's training center and got along well with her supervisor. On Friday, August 19, 1977, Kelly's supervisor informed her that she would be laid off due to cutbacks in her department. Kelly became very upset and went home early. When she returned to work on Monday, Kelly learned that she could transfer to another department and work there as a foreman. She did not want to work in a different department. On that same day Kelly became depressed, developed chest pains, and was taken to the hospital. She experienced a nervous breakdown shortly afterwards.
The issue before the court in Kelly was whether a job change that caused a nervous breakdown was compensable. In a 4-3 decision, the court awarded her workers' compensation benefits. The court specifically declined to impose any requirement that the disability must result from an unusual and objectively stressful event. The Massachusetts court stated:
We reject any contention that Kelly is not entitled to workers' compensation unless her emotional disability resulted from an unusual and objectively stressful or traumatic event. "Our decisions place injuries attributable to specific events at work within the business risks covered by the act, even when employment does not expose employees to an unusual risk greater than that experienced by the general public." - 394 Mass. at 686, 477 N.E. 2d at 584.
The dissent argued the claim was not compensable because this breakdown was caused by a change of jobs, which is an ordinary employment decision. The dissent further argued that there must be something unusual, unexpected, or extraordinary to be compensable. The issues were clearly delineated by the Massachusetts court.
With the clear-cut split, the Arizona Supreme Court agreed with the majority opinion that one need not show unusual, unexpected, or extraordinary events to be compensable. In Kelly's Case, the claimant clearly suffered from a mental-mental injury, as did Mr. LaPare.
In LaPare, the court said the stress must be objectively determined, but in Kelly's Case, the court said "an identifiable incident or stress need not be unusual or severe to support compensation if the particular employee succumbs to it." The Arizona Supreme Court has overruled LaPare by adopting Kelly's Case, which had similar facts with a totally different result.
After Kelly's Case, Massachusetts passed legislation in 1985 that declared that a job demotion or change was not compensable. Mass. Gen. Laws Ann., ch. 152, § 1 (7A) (Law. Co-op 1985). The court in Murphy quoted from Kelly's Case with approval, even though it was no longer law in Massachusetts. Its reliance and agreement with the majority opinion in Kelly's Case, instead of LaPare, demonstrates that LaPare is no longer law.
If our court agrees with Kelly's Case, then A.R.S. § 23-1043.01(B) has been effectively repealed because one does not need the requirement of unusual, unexpected or extraordinary stress in mental-mental injury cases.
CONCLUSION
What is the status of mental injury cases in Arizona? Has the distinction between mental-mental injuries and mental-physical injuries been so blurred that there is not difference? If so, then A.R.S. § 23-1021 is applicable to all situations and A.R.S. § 23-1043.01(B) is left with only the requirement that there needs to be substantial evidence and a work connection before a mental injury case is compensable. Does there still remain a requirement that the emotional stress of the job be unusual, unexpected, or extraordinary stress to be compensable in Arizona? If the answer is in the affirmative, then does that apply only to mental-mental injury cases? Is there a requirement that the unusual, unexpected, or extraordinary stress be determined by an objective standard, or do we use a subjective standard based upon the reaction of the particular claimant?
The opinion by the Murphy court has created more questions than it has answered. One must hope that the Arizona Supreme Court, in its next decision, will define, refine and narrow the Murphy decision with its broad, all-encompassing language.
Harlan J. Crossman is an Attorney at Law in Phoenix, Arizona. B.A. 1962, J.D. 1965, University of New Mexico. Certificate of Specialization in Workers' Compensation 1979. State Bar of Arizona Section on Workers' Compensation Adjunct Professor of Law in Workers' Compensation at Arizona State University.
Alan S. Baskin graduated from the Arizona State University College of Law in 1990.
