Bray v. Workers' Comp. Appeals Bd.

• Decision Date: 30 June 1994
• Docket Number: No. B075903,ITT-BARTON,B075903
• Citation: 26 Cal.App.4th 530,31 Cal.Rptr.2d 580
• Court: California Court of Appeals
• Parties: Kenneth BRAY, Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD,, et al., Respondents.

Page 580

31 Cal.Rptr.2d 580

26 Cal.App.4th 530

Kenneth BRAY, Petitioner, v.WORKERS' COMPENSATION APPEALS BOARD, ITT-BARTON, et al., Respondents.

No. B075903.

Court of Appeal, Second District, Division 3, California.

June 30, 1994.

Review Denied Sept. 8, 1994.

Cantrell, Green, Pekich, Cruz & McCort and Wayne McCort, Long Beach, for petitioner.

Parker & Irwin and Joan E. Partritz, Pomona, for respondents.

CROSKEY, Associate Justice.

Kenneth Bray("Bray"), a discharged employee, sought workers' compensation benefits, alleging industrial injury to his nerves, psyche and internal system caused by termination from his employment.The workers' compensation judge (WCJ) awarded him compensation.The Workers' Compensation Appeals Board(Board) rescinded the award on the grounds that Bray's injury was not one "arising out of and in the course of the employment," as required by Labor Code section 3600, subdivision (a).¹While it is true that an employee's termination is a matter which occurs in the course of employment, we nonetheless reach the common sense conclusion that for sound public policy reasons a post termination emotional injury, arising solely from the fact of termination, is not compensable.We therefore affirm the decision of the Board.

FACTUAL AND PROCEDURAL BACKGROUND

Bray was employed as a manufacturing engineer from August 1, 1988, to January 23, 1989, by defendant employer ITT-Barton, which was in turn insured by defendantInsurance Company of North America (hereinafter collectively the "defendants").²

On January 23, 1989, Bray's employment was terminated by his employer without warning.According to the evidentiary summary prepared by the WCJ, Bray testified: "[O]n his way home from being terminated, he was completely devastated and had to pull off the freeway.He stopped at a Denny's in Whittier off the 605 Freeway.He sat there for two or three hours contemplating what he would do.He had anxiety, nervousness and sweating.He had been doing this job [engineering] for 40 years and then all of a sudden he's been told that he is incompetent, which was [the] reason for [his] termination."

Bray sought help for his emotional distress from a clinical psychologist, Sivan Caukins, Ph.D., in March 1989.On August 14, 1990, Dr. Caukins reported that Bray felt he had been the victim of age discrimination, that the termination had devastated him and that, as a result, he had been totally temporarily disabled for over a year and was permanently and severely psychologically impaired.³

A hearing on Bray's claim was held June 7, 1991.According to the evidentiary summary, Bray testified at length.He had a long employment history as a "job engineer," going from one company to another on contract for relatively short periods of time.He worked for many companies over a forty-year period.The longest period of employment was seven years.While he had been terminated by several employers since 1980, he had no warning defendant ITT-Barton was going to fire him; he thought he was doing well.⁴It was a blow.He felt particularly hopeless and depressed because he was terminated at age 61 and, given such age, thought it would be difficult to find other work, particularly after being branded incompetent.He had tried to find other work after his termination from ITT-Barton without success.

On September 11, 1991, the WCJ determined that Bray had sustained an injury to his nerves and psyche arising out of and occurring in the course of his employment during the dates August 1, 1988 to January 23, 1989.The WCJ relied on the report of Dr. Feldman (see fn. 3, ante ) in determining that Bray had sustained permanent psychiatric injury of 19.5 percent.While the WCJ had found that Bray had sustained a cumulative industrial injury during his entire employment, her written decision stated: "It is the opinion of both [Bray's] and defendants' doctors that [Bray's] present psychiatric injury is caused by his termination from ITT-Barton.It is found that, in this particular case, termination alone was the causative factor of the psychiatric injury which occurred after [Bray's] termination."(Emphasis in original.)⁵The WCJ declined to find injury to [Bray's] internal system, and did not award further medical treatment nor impose any penalties upon defendants for failure to pay temporary and permanent disability benefits.

Defendants petitioned for reconsideration, declaring that the issue was "whether a termination in and of itself which results in feelings of inadequacy or other psychological symptoms is an industrial injury...."

Bray opposed the petition and relied on Shoemaker v. Myers(1990)52 Cal.3d 1, 20, 276 Cal.Rptr. 303, 801 P.2d 1054("Shoemaker ").In that case, our Supreme Court barred civil suits based on wrongful termination (with some exceptions which do not apply here) and held that employees wrongfully terminated were limited to the exclusive remedy of workers' compensation because they had sustained an industrial injury.The court specifically held "that both the act of termination and the acts leading up to termination necessarily arise out of and occur during and in the course of the employment."(52 Cal.3d at p. 20, 276 Cal.Rptr. 303, 801 P.2d 1054.)Defendants responded that Shoemaker was factually distinguishable from the present case because it involved a long-term employee who had suffered from a series of injurious acts which had occurred prior to his termination.

The WCJ recommended denial of reconsideration.While she agreed that Shoemaker was different factually, she pointed out that the decision nonetheless declared that the court wanted to avoid the "evidentiary nightmare" which would result from differentiating between pre-termination injuries and injuries caused by the termination itself.It was for this reason that the Shoemaker court had concluded that both types of injuries would be compensable pursuant to section 3600, subdivision (a).⁶

The Board, however, granted reconsideration and, on February 19, 1993, issued an opinion reversing the WCJ on the ground that Bray's injury was not industrial.The Board stated that Shoemaker had not ruled on the question of whether the act of termination followed by injury was compensable.It noted that in Gantt v. Sentry Insurance(1992)1 Cal.4th 1083, 4 Cal.Rptr.2d 874, 824 P.2d 680("Gantt "), the Supreme Court observed that the Shoemaker court had expressly reserved this issue when it stated, "[W]e need not decide whether workers' compensation applies where the injuries arise 'only after the termination.' "(Id., at p. 1097, fn. 8, 4 Cal.Rptr.2d 874;emphasis in original.)The Board concluded: "The Board does not believe that such after-the-fact reactions [such as that allegedly sustained by Bray] constitute an injury 'arising out of the employment' or occurring during the course of the employment.If such injuries were compensable, then every worker who was emotionally upset at his employer for being fired or laid off would be entitled to workers' compensation benefits and this program would become a substitute for the unemployment insurance program, with longer and higher benefits."

Bray filed an amended petition for reconsideration, pointing out that the whole rationale for Shoemaker was that emotional distress and psychiatric injury claims generated by wrongful termination of employment belonged in the compensation system rather than the civil courts.On May 3, 1993, the Board denied reconsideration, again pointing out that neither Shoemaker nor Gantt supported the view that an injury arising after job termination was compensable pursuant to section 3600, subdivision (a).Bray then successfully sought a writ of review in this court.

DISCUSSION

Section 3600, subdivision (a), provides, in pertinent part, that "[l]iability for ... compensation ... shall, without regard to negligence, exist against any employer for any injury sustained by his or her employees arising out of and in the course of the employment...."One of the requisite conditions for compensability is found in subdivision (a)(3), "[w]here the injury is proximately caused by the employment, either with or without negligence."Section 3602, subdivision (a), provides that "[w]here the conditions of compensation set forth in Section 3600 concur, the right to recover such compensation is, ... the sole and exclusive remedy of the employee or his or her dependents against the employer, ..."

"Ordinarily, injuries arising from termination of employment arise out of and occur in the course of employment within the meaning of Labor Code section 3600.[Citations.]If the actions of the employer in terminating the employee 'constitute a normal part of the employment relationship,' injuries which result are subject to the exclusive remedy provisions of Labor Code section 3602.[Citation.]This is so even if the injuries flow from intentional misconduct by the employer, and even if such conduct might be characterized as egregious, manifestly unfair, outrageous, or intended to cause emotional disturbance resulting in disability.[Citations.]"(B & E Convalescent Center v. State Compensation Ins. Fund(1992)8 Cal.App.4th 78, 89-90, 9 Cal.Rptr.2d 894.)⁷

However, as one legal commentator recently put it, "... the California Supreme Court has yet to decide whether or not workers' compensation applies when the injuries resulting from termination arose only after the termination."(1 Hanna, Cal.Law of Employee Injuries & Workers' Compensation (2d ed. 1993), The Relationship Between Injury & Employment, § 4.65, pp. 4-80 through 4-81;fns. omitted.)⁸

The law summarized by Hanna draws heavily on a series of recently decided California Supreme Courtcases.The fundamental policy decision to relegate most wrongful termination issues to resolution within the workers' compensation system has come at a time when there has also been a perceived need by the Legislature to limit the...