Psychiatric Injured Must Be Based On Events Of Employment

The applicant alleged a psychiatric injury based on the firms downsizing among other reasons

The applicant alleged that the company’s stock declined in value causing the applicant stress. It was also alleged that the firm was going to eliminate a significant number of positions that created stress for the applicant. Lastly, the applicant alleged stress from the job itself, including listening to abusive comments from customers.

The Workers’ Compensation Judge (WCJ) ruled the applicant did not suffer a psychiatric injury because work stress was not the predominant cause of the psychiatric injury within the meaning of Labor Code section 3208.3, subdivision (b) (1). The Workers’ Compensation Appeals Board (WCAB) overruled the WC J and found the applicant suffered a psychiatric injury.

The appellate court reviewed the legislative history of section 3208.3. It indicated that you must look at actual events of employment. It stated that an event must be “something that takes place”. The event must be something that arises out of the employee’s working relationship with his or her employer.

They indicated that the public policy to “limit” claims for psychiatric injury should be considered when making an award for the applicant.

They ruled corporate downsizing, without more, cannot support an award for benefits. They also ruled that stock losses are not an event of employment. Work related stress may qualify, but it needs to be more than 50 percent of a psychiatric disability.

Due Diligence During Discovery Means Reasonable Diligence


This is an un-published case but is significant for many reasons. The applicant alleged bilateral carpal tunnel syndrome. The applicant filed a workers’ compensation claim and was referred for treatment. The applicant testified at her deposition that her hands started hurting about a year after going to work for the employer.

The defendant denied the claim. The case went to a mandatory settlement conference at which time both sides listed their evidence in accordance with Labor Code section 5502 (d) (3).

A trial took place and applicant testified at trial that her complaints began in the year 2000. After the trial, but before the judge issued a decision, the defendant did a “master trace”. The defendant discovered the history given to the doctor’s and the testimony at trial and deposition was not accurate. There were records the applicant had been diagnosed with carpal tunnel at the commencement of her employment with the defendant in 1999.

The defendant requested the record be reopened. The Workers’ Compensation Judge (WCJ) did not address the reopening of the record and found for the applicant. The defendant appealed and the Workers’ Compensation Appeals Board (WCAB) denied reconsideration and did not admit the records.

The appellate court indicated that 5502 (d) (3) does not define due diligence. Section 10856 discusses reasonable diligence. Therefore, the court decided that due diligence is the same as reasonable diligence. The court overturned the WCAB because the opinion was not based on substantial evidence since they did not review the prior records.

The court also made an interesting observation that carpal tunnel does not develop over a short period of time. This would be something to have the doctor address at the time of any evaluation.

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