Cairns v. City of East Orange

Citation631 A.2d 978,267 N.J.Super. 395
PartiesNeil CAIRNS, Petitioner-Appellant, v. CITY OF EAST ORANGE, Respondent-Respondent.
Decision Date29 September 1993
CourtNew Jersey Superior Court – Appellate Division

Barry H. Evenchick, Livingston, for petitioner-appellant (of counsel and on the brief).

Rashidah N. Hasan of the firm of Lofton & Wolfe, Newark, for respondent-respondent (of counsel and on the brief).

Before Judges SHEBELL, LONG and LANDAU.

The opinion of the court was delivered by


This case involves an application of the Workers' Compensation Act (Act) which is one of first impression in New Jersey. Neil Cairns (petitioner) appeals from the dismissal on the merits of his claim petition by the Honoarable Stanley Levine, Supervising Judge of the Division of Workers' Compensation. The petitioner alleged that he sustained emotional distress and mental suffering as a result of receiving a notice of layoff on August 23, 1989, after thirty-three years of continuous employment with the City of East Orange (respondent). In his oral decision of September 22, 1992, Judge Levine concluded that layoff notices are inherent to employment and petitioner's psychiatric injuries could not be regarded as "work-related" or "arising out of employment."

A detailed recitation of the facts is presented because of the unique nature of the case. In 1988, at age 61, petitioner had been a civil service employee of respondent for thirty-three years. At the time his claim petition was filed, he was Superintendent of Public Buildings and Grounds earning approximately $56,000 per year. He supervised about twenty to thirty people.

On or about February 1, 1988, respondent's office of personnel processed and sent out approximately 700 "general layoff notices" to all employees of East Orange, except for police, fire, and certain library workers. Respondent's personnel manager testified that, as required by state law, these general notices included a 45-day layoff notification and were sent because of "fiscal constraints" to all employees within an organizational unit that may be affected by a specific layoff notice at a later time. Petitioner confirmed that the general notice of layoff did not cause him any significant concern because, as a city employee, he recognized it as a notice of potential layoff and he had received several such notifications in the past.

While at work on February 11, 1988, petitioner was hand-delivered a "specific notice of layoff," which informed him that he was being laid off his job on March 31, 1988. It appears that his department had been abolished shortly before he received this layoff notice, and that approximately twenty such notices were distributed to members of his department. The personnel manager doubted whether any "specific notice of layoff" had been sent to employees who had twenty or more years of service. Petitioner was probably one of the ten longest serving employees of respondent at the time he received the specific notice of layoff.

Petitioner asserted that he reacted to the specific notice of layoff with shock and disbelief. He felt there had been some mistake because he had the most seniority of anyone in the department and he thought that the last to be hired was to be the first fired. Upon receipt of this notice, he felt ill and went to see the respondent's authorized doctor within a couple of days. Judge Levine characterized petitioner to be "the most impressively credible witness to ever have appeared before me."

Petitioner was not satisfied with the first doctor so he went to see and was treated by the head psychiatrist at East Orange General Hospital. Along with his shock, anger, and disbelief, petitioner experienced insomnia, loss of appetite (resulting in a weight loss of fifty pounds), inability to concentrate, change in his temperament, and negative effects on his marital relationship. At times, petitioner and his wife were compelled to sleep in different beds because of petitioner's insomnia. Petitioner's wife testified that petitioner no longer helped with chores around the house and had lost interest in his children and grandchildren. Petitioner had never before experienced any of the above mentioned problems nor sought any form of psychiatric counselling.

After the initial consultation, petitioner was treated by the psychiatrist every two weeks. The psychiatrist diagnosed a post-traumatic stress syndrome and major depressive illness related to the anger that petitioner had about being laid off or the potential of being laid off. The psychiatrist advised petitioner to take time off from work. He prescribed an anti-anxiety drug and a sedative.

While the petitioner was not working because of his medical problems, he received a letter dated March 15, 1989, from the New Jersey Department of Personnel advising him as to "demotional or bumping rights" arising from his seniority. Respondent twice extended the date of the layoff, for another forty-five days each time. The layoff notice was thereafter rescinded and petitioner returned to work on or about August 15, 1988, against the instructions of his psychiatrist. As of August 15, 1988, petitioner had been out of work for a total of six months.

Petitioner's treatment continued after he returned to work, but his depression worsened and the doctor again recommended that he stop work. Petitioner left his job at the end of July 1991. He officially retired in April 1992. Petitioner testified that he would not have retired at that date, but for the medical problems he was having at the time. Judge Levine found that petitioner's receipt of the specific notice of the layoff was the "causal triggering mechanism for [petitioner]'s medical problem and disability."

Judge Levine correctly stated that the central issue is whether a layoff notice can be considered "work-related" or "arising out of employment" for purposes of workers' compensation. The Act requires an employer to pay an employee compensation for personal injuries, occupational disease, or death, "arising out of and in the course of his employment." N.J.S.A. 34:15-30 and N.J.S.A. 34:15-7. Thus, whether the claim is considered one for accidental injury or occupational disease is of no consequence here as the Act only requires payment of benefits if the injury "arises out of employment." This phrase is not defined in the Act, however, the following appears to represent a satisfactory outline of its perimeters:

An accident arises out of the employment when it is something the risk of which might have been contemplated by a reasonable person when entering the employment as incidental to it. A risk is incidental to the employment when it belongs to or is connected with what a workman has to do in fulfilling his contract of service. Moreover, a risk may be incidental to the employment when it is either an ordinary risk directly connected with the employment, or an extraordinary risk which is only indirectly connected with the employment, owing to the special nature of the employment. [Furda v. Scannell China Co., 17 N.J.Super. 339, 347, 86 A.2d 39 (Law Div.1952). ]

Whether a layoff notice would satisfy the requirements of the definition of "arising out of employment," most likely depends on underlying policy considerations rather than the clear language of the Act. See Williams v. Western Electric Co., 178 N.J.Super. 571, 588, 429 A.2d 1063 (App.Div.1981). No New Jersey case law is directly on point. However, two New Jersey cases involving fear of loss of employment were discussed by Judge Levine and are relevant.

In Walck v. Johns-Manville Products Corp., 56 N.J. 533, 267 A.2d 508 (1970), compensation was denied an employee who suffered a fatal heart attack. It was alleged in part that the attack was caused by decedent's feeling of insecurity about the job and fear that he might lose his job. Id. at 557, 267 A.2d 508. Our Supreme Court held [I]f the nature of the employee is such that he is a worrier, the mere fact that he becomes unnecessarily tense and nervous as to whether he is going to keep or lose his job, without more, would not make a heart attack compensable, even if the attack did result from that worry. [Ibid.]

The petitioner in Walck had a subjective fear about some possible future loss of his job, whereas the petitioner in the present case actually received a layoff notice thereby precipitating his concern.

In Walck, the applicable principle under the Act was stated as follows:

Put in conventional terms, the heart attack, to be compensable, must arise out of the employment. That is, must be due in some realistic sense and material degree to a risk reasonably incidental to the employment; the attack must issue from or be contributed to by conditions which bear some essential relation to the work or its nature. [56 N.J. at 556, 267 A.2d 508.]

Our Supreme Court in Walck espoused a policy against making employers insurers of all risks which might arguably be related to the employment setting. Regarding fear of job loss, the Court stated:

That kind of anxiety or tension cannot be considered a risk arising out of the employer's work. If worry, about job security alone, which produces a heart seizure would establish compensability, the employer would become an insurer against such attacks. Id. at 557, 267 A.2d 508.

In Goyden v. State Judiciary, 256 N.J.Super. 438, 607 A.2d 651 (App.Div.1991), aff'd o.b., 128 N.J. 54, 607 A.2d 622 (1992), the petitioner suffered severe depression resulting from the stress he felt on the job and from fear that his superiors were taking steps to remove him from his job. Even though the judge of compensation found petitioner to be 100% disabled because of the depression attributable to his employment, we reversed because the plaintiff's stress was deemed to be "subjective" and did not satisfy the requirement that there must be "objective" evidence of working conditions sufficiently stressful...

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    ...Mutual, but held that coverage was not precluded by the employee exclusion. Extending the reasoning of Cairns v. City of East Orange, 267 N.J.Super. 395, 631 A.2d 978 (App.Div.1993), the court determined that Picciallo's termination did not "arise out of his employment" and concluded that t......
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