SAN FRANCISCO--Employee stress resulting from an employer's declining stock value or a downturn in the employer's business is not compensable, a California appeals court ruled Friday.
The decision overturns a workers compensation appeals board finding that daily interactions with irate customers, company downsizing and concern about the employer's future, as well as employer stock value losses and the impact on an employee's retirement funds were predominant causes of a compensable psychiatric injury.
But in Pacific Gas & Electric Co. vs. Worker's Compensation Appeals Board, the San Francisco-based 1st District Court of Appeal noted that, under state labor law, benefits may be awarded only when industrial factors--those related to the specific work the employee is doing-- account for more than 50% of a psychiatric disability.
The appeals court remanded the case for reconsideration after finding the workers comp appeals board improperly relied on certain factors to reach its conclusion. The case involved a 16-year employee who "was forced to leave work" in 2001, after PG&E filed for Chapter 11 bankruptcy, because the pressure on him was so great, court records state. He had about $200,000 in PG&E stock when the company filed for bankruptcy.
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