New York’s Landmark Workers Compensation Law for Mental Health Claims
A newly enacted law in New York has opened the door for workers to file claims for workers’ compensation specifically related to mental injuries arising from “extraordinary work-related stress.” Legal and insurance experts anticipate that this change could lead to a significant increase in the number of claims and subsequent litigation.
Senate Bill 6635 and its counterpart Assembly Bill 5745 were signed into law in December after a lengthy seven-year struggle by New York lawmakers to address mental stress injuries within the workers’ compensation framework. These bills received support from over a dozen co-sponsors but also faced considerable opposition, with nearly one-third of lawmakers voting against them.
For years, courts have grappled with defining what constitutes work-related stress, and recent legal cases have underscored the complexity of the issue. The new legislation represents “a major shift for New York,” according to Sarah Thomas, managing partner at the New York-based insurance defense law firm Jones Jones LLC. “We can expect to see a notable uptick in mental health claims being filed.”
One key aspect that may lead to legal disputes is the interpretation of the term “extraordinary” as used in the new law. Ms. Thomas noted, “Claimants will still need to demonstrate an extraordinary circumstance, which has been a topic of litigation before the New York State Workers’ Compensation Board and the Appellate Division.”
According to Todd Jones, a partner at Goldberg Segalla LLP, the law contains “vague statutory language,” which is likely to invite litigation. “For the initial years, businesses will bear the brunt of this law as the staff at the workers’ compensation board decipher the definition of ‘extraordinary’,” he remarked.
Most cases under this law are expected to be complex. Employees will be required to establish “a causal relationship between the workplace or specific work activities and the mental injury being claimed,” explained Mark Goldstein, a partner in the Labor & Employment Group at Reed Smith LLP. “This process will have to navigate through administrative channels and possibly the courts,” he added.
The American Property Casualty Insurance Association has expressed concerns about the potential influx of mental stress claims overwhelming the New York system. Steven Bennett, vice president of workers’ compensation programs and counsel for the association, stated, “We worry that the previous law, which set a high bar based on decades of court rulings, will be undermined. We would have preferred to see that standard maintained.”
In reaction to the new law, two bills have been introduced this year aimed at reversing its provisions by limiting compensable mental injuries from stress to only first responders in situations involving “work-related emergencies.” Notably, first responders already have the ability to file mental injury claims under a presumption established in 2017.
Some experts view the shift towards mental injury claims being processed through the workers’ compensation system rather than civil courts as a positive development. Lisa Griffith, a shareholder in Littler Mendelson P.C.’s Melville, New York office, stated, “While we may see an increase in workers’ compensation claims for emotional distress, the workers’ compensation exclusivity may serve as a defense in some employment litigation cases.”
Mr. Goldstein pointed out that there could be scenarios allowing for dual remedies; in cases of discrimination leading to extraordinary stress, an employee might pursue both workers’ compensation and civil remedies. “The workers’ compensation system would not be the only venue for their case. They could still file a discrimination claim in court,” he explained. “However, any compensation received from workers’ compensation may need to be deducted from potential damages or settlements in a civil case.”
In some instances, accepting a mental stress claim could actually benefit an employer, although much will depend on the specific circumstances surrounding each case. “There’s little advantage in resisting a claim if it doesn’t serve a purpose,” he concluded.
Recent Court Rulings on Mental Trauma Claims
In a notable ruling on January 16, an appeals court dismissed a post-traumatic stress disorder claim from a bus driver who alleged she was assaulted while driving. The court determined that the incident did not fall outside the typical challenges faced by bus operators in New York City.
The driver, who had been employed for 21 years with the Manhattan & Bronx Surface Transit Authority, filed for workers’ compensation benefits after experiencing PTSD following an incident where an unidentified man attempted to board her bus while it was stopped at a red light. The man climbed onto the front bumper, pounded on the windshield, and damaged parts of the bus, as detailed in CV-23-0854 filed in the State of New York Supreme Court, Appellate Division 3rd Judicial Department. Her claim was ultimately denied.
After an independent medical evaluation and a deposition of the driver’s physician, a workers’ compensation law judge initially found that the claimant had sustained a “work-related” mental injury. However, the Workers’ Compensation Board reversed this decision on appeal, ruling that the driver “failed to demonstrate that the stress she experienced from the incident was greater than that encountered by other bus operators in similar circumstances.”
The appellate court affirmed the board’s ruling, stating, “It is anticipated that bus operators may face unruly passengers and damage to their vehicles.”
Similarly, on October 10, another New York appeals court denied a mental stress claim from a field repair technician who alleged that her work environment exacerbated a pre-existing psychological condition. In CV-23-1581, the technician claimed that she was subjected to constant intimidation and harassment, noting that she feared for her safety due to daily encounters with hostile individuals at work.
A workers’ compensation law judge concluded that the technician “failed to establish that her alleged injuries were caused by a workplace incident.” The appeals court supported the Board’s factual finding that the claimant had not experienced stress greater than that which other similar workers typically encounter in their work environments.
