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Depression after business failure doesn't warrant benefits
In New Hampshire, a mental injury for a business failure taken in good faith is not compensable.
Case name: Appeal of Letellier, No. 2010-795 (N.H. 12/15/11). Ruling: The New Hampshire Supreme Court held that a business owner was not entitled to benefits because the stress he suffered after his business failed was not an injury.
Summary: A business owner's steel manufacturing plant was destroyed by a fire and temporarily relocated. The cost of rebuilding the facility exceeded budget projections and the company floundered. Later, the business was closed. The owner developed hypertension and major depression, and his doctors attributed the ailments to the failure of his business and other life stresses. He sought workers' compensation benefits, claiming he had mental stress and severe depression. The New Hampshire Supreme Court held that he was not entitled to benefits. The court explained that a statute does not permit compensation for a mental injury caused by a disciplinary action or "any similar action" taken in good faith by an employer. The court considered the meaning of the term "any similar action" and said that the possibility of a business failure was a normal condition of employment that was often precipitated by poor company performance or general economic conditions. The court found the phrase encompassed a business failure. The court explained that interpreting the phrase not to include a business failure would lead to the absurd result that employees laid off for a business failure would not receive benefits while an owner would be eligible. The court mentioned that the owner's injuries did not arise from the performance of personnel duties that were part of his job. Also, there was nothing to suggest that the failure of the business involved bad faith. Therefore, the owner's depression was excluded from the statutory definition of "mental injury." A dissenting judge opined that the owner suffered from a cumulative stress injury that was caused by the fact that the business was failing, not its ultimate failure. The judge said that a mental injury suffered by the owner of a business that was failing economically should be compensable. Read more at the WorkersComp Forum homepage. January 23, 2012 Copyright 2012© LRP Publications |
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