Ohio Supreme Court Provides Guidance on Compensability of Psychiatric and Psychological Conditions Under Workers’ Compensation System

December 28, 2005

On Wednesday, December 28, 2005, the Ohio Supreme Court issued its opinion in the case of McCrone v. Bank One Corp., 107 Ohio St.3d 272, 2005-Ohio-6505.  This decision resolves (for now) the issue of compensability of psychiatric injuries/conditions under Ohio’s workers’ compensation system.  In a 5-2 decision, the Court held that 1) psychological or psychiatric conditions that do not arise from a compensable physical injury or occupational disease are excluded from the definition of “injury” under R.C. 4123.01(C)(1) and from workers’ compensation coverage, and 2) R.C. 4123.01(C)(1) does not violate the equal protection clauses of the United States and Ohio Constitutions by excluding from the definition of “injury” psychological or psychiatric conditions that do not arise from a compensable physical injury or occupational disease.

While working as a teller for Bank One, Kimberly McCrone witnessed two robberies.  After the second robbery, in which she was the teller involved, McCrone was diagnosed with post-traumatic stress disorder and did not return to work for the bank.  She sought workers’ compensation benefits, but those benefits were denied because she had not suffered a physical injury.  After exhausting her administrative remedies, McCrone appealed to the Stark County Court of Common Pleas.  She argued that, to the extent R.C. 4123.01(C)(1) excluded psychological injuries from workers’ compensation coverage, the statute violated both the Ohio and U.S. Constitutions.  The Stark County Court of Common Pleas held R.C. 4123.01(C)(1) unconstitutional.  The Court of Appeals for Stark County affirmed and Bank One appealed to the Ohio Supreme Court.

Writing for the majority, Justice Lanzinger reaffirmed the Court’s position that “in the absence of a clearly expressed legislative intent to recognize mental conditions caused solely by work-related stress as occupational diseases within the purview of the Worker’s Compensation Act, such mental conditions are not compensable as occupational diseases.”  In defending the constitutionality of this legislative enactment, the Court noted the difficulty in proving the existence of, as well as the cause of mental injuries, and pointed to the State’s interest in making the most efficient use of a finite fund.  The Court concluded, “It is reasonable to expect government to protect the self-supporting nature of the Workers’ Compensation Fund, to distribute available resources so that benefit payments are kept at an adequate level for covered injuries rather than at an inadequate level for all potential disabilities, and to maintain a contribution rate not unduly burdensome to participating employers.”

In its decision, the Court also cast serious doubt on the viability of Bailey v. Republic Engineered Steels, Inc. (2001), 91 Ohio St.3d 38, 40, 741 N.E.2d 121.  In Bailey, a claimant sought workers’ compensation benefits for depression that resulted when the claimant accidentally killed his co-worker.  Although the Court in Bailey held that “[a] psychiatric condition of an employee arising from a compensable injury or an occupational disease suffered by a third party is compensable under R.C. 4123.01(C)(1),” the Court in McCrone referred to this holding as “atypical” and an “aberration.”  The Court observed, “When the entire definition of “injury” in R.C. 4123.01(C) is examined, it is clear that workers’ compensation covers physical injuries and psychiatric injuries that arise directly out of physical injuries or occupational disease to the claimant.“

The Ohio Supreme Court’s decision in McCrone confirms longstanding principles of Ohio’s workers’ compensation system and clarifies many recurring issues concerning the compensability of psychiatric and psychological injuries.   If you have any questions about the impact of the McCrone decision on your business, or any other workers’ compensation issues, please contact an attorney in our Labor and Employment Department for further details.

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