By: John M. Dealy and Michael S. Melville
On October 12, 2013, the Massachusetts Appeals Court decided In re Upton’s Case, which reversed the Commonwealth’s Reviewing Board, and clarified that the “personnel action” exclusion to the personal injury definition of §1(7A) is broader than actions which terminate or alter employment status. In re Upton’s Case, 84 Mass. App. Ct. 411, 997 N.E.2d 126 (2013), review denied, 466 Mass. 1112 (2013).
In defining “personal injury” under the Massachusetts workers’ compensation statute, § 1(7A) declares, in part, that, “No mental or emotional disability arising principally out of a bona fide, personnel action including a transfer, promotion, demotion, or termination except such action which is the intentional infliction of emotional harm shall be deemed to be a personal injury within the meaning of this chapter.” M.G.L. c. 152, §1(7A).
Upton’s Case springs from a factual background that stretches back to the late 1990s. In 1999, Upton was terminated from his employment as a correction officer at the Suffolk County Sheriff’s Department when a disciplinary officer found that he had filed false reports and provided false information during an investigation. Upton filed a grievance, and in 2001, an arbitrator reduced the punishment to a six-month unpaid suspension. The arbitrator further ordered that Upton receive back pay, “less any outside earnings and/or unemployment compensation.”
After all appeals of the arbitration were resolved, Upton signed a document detailing his outside earnings during the relevant time frame, and returned to work. The Sheriff’s Department subsequently acquired information that questioned the veracity of Upton’s signed, outside earnings document. Two investigators from the Sheriff’s Department held a meeting with Upton to discuss the apparent discrepancy.
After this meeting, Upton went to a hospital where he complained of chest pains, shortness of breath, and tingling in his arm. He did not return to work and filed a workers’ compensation claim for incapacity and related medical benefits. An administrative judge from the Department of Industrial Accidents denied the claim, ruling that the claim resulted from a “bona fide, personnel action” under § 1(7A).
On the administrative appeal subsequently filed by Upton, the Reviewing Board reversed the administrative judge’s decision. The Reviewing Board reasoned that since the meeting was not akin to a “transfer, promotion, demotion, or termination,” it did not alter his employment status or terminate his employment relationship, and it was therefore not a personnel action under § 1(7A).
The Sheriff’s Department appealed the Reviewing Board decision to the Massachusetts Appeals Court. Ultimately, the Appeals Court held that the original termination of Upton was a §1(7A) personnel action and that the investigation of Upton’s outside earnings was a part of his reinstatement, and thus, “the final remedial stage of the extended personnel action.”
In its decision, the Appeals Court noted that while §1(7A) expressly lists “transfer, promotion, demotion, or termination” as personnel actions, this list is preceded by the word “including.” The Appeals Court then examined the legislative purpose of the “personnel action” clause of § 1(7A). See Upton’s Case, 84 Mass. App. Ct. at 416-17. Referencing its in-depth analysis of the Legislative amendments to the “personal injury” definition in Cornetta’s Case, 68 Mass. App. Ct. 107, 108, 860 N.E.2d 687, 688-89 (2007), the Appeals Court noted that the personnel action clause was part of “a sustained legislative pattern in the 1980s and 1990s” where the Legislature was intending to restrict coverage for mental and emotional disabilities.
Against this backdrop, the Appeals Court expressed skepticism that the Legislature intended to exclude workers’ compensation coverage for the “serious and formal” employment events—transfer, promotion, demotion, and termination—but allow an employee to collect benefits for the emotional consequences of “preliminary and tentative events of investigation and fact finding.” The Court reasoned that if the Legislature did not wish to compensate an employee for emotional injuries stemming from the more serious events, it did not intend to provide compensation for the “less serious processes” of supervision, criticism, and investigation. The Court further commented that employers must be allowed to regulate “competence and integrity at the workplace” through supervision and investigation without becoming liable under the workers’ compensation system for the emotional consequences of such efforts.
On its face, Upton’s Case broadens the restrictions on an employee’s ability to collect workers’ compensation benefits for emotional injuries arising out of personnel actions under M.G.L. c. 152, §1(7A) by holding that an employer’s conduct need not terminate or alter an employee’s status to constitute a “personnel action.” Rather, a personnel action can include an employer’s investigation, supervision or criticism of an employee that may ultimately lead to an employment status altering event.
However, a subsequent Reviewing Board decision underscores that an analysis of the compensability of emotional injuries stemming from bona fide personnel actions does not end with the employer-friendly holding of Upton’s Case. See Wicklow v. Fresenius Medical Care Holdings, Inc., 035561-09, 2014 WL 1513302 (Mass. Dept. Ind. Acc. Apr. 9, 2014). Wicklow involves the appeal of an administrative judge’s ruling that certain actions of an employer did not fall under the bona fide personnel action exception to § 1(7A). Rather than analyzing whether or not the actions were “personnel actions” under § 1(7A), the Reviewing Board focused on whether the actions were “bona fide,” or done in good faith. Citing the administrative judge’s determination that the actions were not, the Reviewing Board upheld his decision that those actions did not qualify as “bona fide, personnel actions.” In its decision in Wicklow, the Reviewing Board also re-emphasized that once the employee has made the prima facie showing that that the emotional disability was caused by events at work, the insurer bears the burden of establishing the affirmative defense that the emotional distress arose primarily out of a bona fide, personnel action.
With the broadening of a “personnel action” by the Appeals Court in Upton’s Case, the Reviewing Board’s decision in Wicklow may signal a heightened focus on the issue of “bona fide,” or good faith, when an employer seeks to avoid liability for alleged emotional distress injuries on the basis of the “bona fide, personnel action” exception of M.G.L. c. 152, §1(7A).
In re Upton’s Case, 84 Mass. App. Ct. 411, 997 N.E.2d 126 (2013), review denied, 466 Mass. 1112 (2013).
Wicklow v. Fresenius Medical Care Holdings, Inc., 035561-09, 2014 WL 1513302 (Mass. Dept. Ind. Acc. Apr. 9, 2014) .