Report Title:

Stress-related Workers' Compensation Claims

Description:

Expands prohibition of stress-related claims for workers' compensation to include all lawful personnel actions. Establishes a good-faith standard for the disallowance of stress claims resulting from lawful personnel actions. Effective February 31, 2050. (HB387 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

387

TWENTY-SECOND LEGISLATURE, 2003

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO WORKERS' COMPENSATION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that Act 224, Session Laws of Hawaii 1998 (Act 224), sought to limit the types of claims for which employees could receive workers' compensation benefits by excluding stress-related claims arising out of good faith disciplinary actions imposed by an employer. Act 224 was enacted to address concerns raised in the aftermath of Mitchell v. State Department of Education, 85 Haw. 250, 942 P.2d 514 (1997).

In Mitchell, the Hawaii supreme court held that a stress related injury caused by disciplinary action for misconduct within "the course of employment" is compensable under the State's workers' compensation law, as it existed prior to the enactment of Act 224.

In an effort to ensure that employers may exercise their lawful right to reprimand employees in good faith without fear of economic reprisal in the form of inflated workers' compensation insurance costs, the legislature in 1998, enacted Act 224. However, Act 224 stopped short of prohibiting workers' compensation claims for all lawful personnel actions, disallowing only good faith disciplinary actions from such claims.

In December of 2002, the Hawaii supreme court rendered an opinion in the case of a firefighter against the city and county of Honolulu fire department, Davenport v. City and County of Honolulu, Honolulu Fire Department, Hawaii No. 23141, (2002). In Davenport, the supreme court opined that, under the "unitary" test, a stress-related injury that stems from an essential function of the employer and results from an activity that serves an important interest of the employer is compensable. In Davenport, the promotion process was an essential function of the employer and served an important interest of the employer. Thus, an injury that stems from such a process is compensable. Consequently, the supreme court held in Mr. Davenport's favor.

The legislature believes that lawful personnel management actions of employers, especially those relating to the promotion process, should not be subject to stress-related claims for workers' compensation benefits.

The purpose of this Act is to disallow compensation for work-related mental impairments that are the result of lawful personnel management actions.

SECTION 2. Section 386-3, Hawaii Revised Statutes, is amended to read as follows:

§386-3 Injuries covered. (a) If an employee suffers personal injury either by accident arising out of and in the course of the employment or by disease proximately caused by or resulting from the nature of the employment, the employee's employer or the special compensation fund shall pay compensation to the employee or the employee's dependents as provided in this chapter.

Accident arising out of and in the course of the employment includes the wilful act of a third person directed against an employee because of the employee's employment.

(b) No compensation shall be allowed for an injury incurred by an employee by the employee's wilful intention to injure oneself or another by actively engaging in any unprovoked non-work related physical altercation other than in self defense, or by the employee's intoxication.

(c) [A claim for mental stress resulting solely from disciplinary action taken in good faith by the employer shall not be allowed; provided that if a collective bargaining agreement or other employment agreement specifies a different standard than good faith for disciplinary actions, the standards set in the collective bargaining agreement or other employment agreement shall be applied in lieu of the good faith standard. For purposes of this subsection, the standards set in the collective bargaining agreement or other employment agreement shall be applied in any proceeding before the department, the appellate board, and the appellate courts.] No compensation shall be allowed for mental injury or illness proximately caused by a disciplinary action and investigation into possible disciplinary action, counseling, work evaluation or criticism, job transfer, lay-off, promotion, demotion, suspension, termination, retirement, or other action associated ordinarily with personnel administration; provided that nothing in this subsection shall be construed to limit the development of the common law or to preempt any common law right or remedy as it may pertain to intentionally inflicted physical or mental injury.

(d) A claim for physical or mental stress resulting solely from personnel action taken in good faith by the employer shall not be allowed."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on February 31, 2050.