For purposes of this defense, the employer must first prove that at least 35 percent to 40 percent of the psychiatric injury was caused by the personnel action or actions. Next, a physician must determine the approximate percentage of causation from each causative factor. Finally, the trial judge then determines whether the factors were lawful and nondiscriminatory, and whether the causative factors were “personnel actions.”2

The WCAB has defined a “personnel action” as conduct either by or attributable to management (including those who have the authority to review, criticize, demote, or discipline an employee). It is not necessary for the personnel action to have a direct or immediate effect on the employment status. Personnel actions may include but are not necessarily limited to transfers, demotions, layoffs, performance evaluations, and disciplinary actions such as warnings, suspensions, and terminations of employment.3 It is for this reason that an employer should document these types of personnel events in writing. The best evidence is written documentation, rather than after-the-fact testimony in court without documentation.

Example: A school teacher was entitled to workers’ compensation for a psychiatric injury where the evidence showed that 15 percent of her injury was caused by non-industrial factors, 51 percent by her activities as a classroom teacher, and 34 percent by the lawful, non-discriminatory, good faith personnel actions of the school principal. In order to use the defense, the law requires that the personnel action must be a substantial cause of the psychiatric injury “from all sources combined,” including non-industrial factors. Because only 34 percent of all sources that combined to cause the psychiatric injury were due to the good faith personnel actions, the injury was found to be compensable.4

A California Court of Appeal ruled that the good faith personnel action defense extends to work-related stress injuries that manifest themselves in physical symptoms, such as gastrointestinal problems or headaches.5

John McCoy worked as an automated systems technician for the County of San Bernardino. He filed a workers’ compensation claim alleging injury to his psyche over a six-month period. He included a claim of injury in the form of migraine headaches. McCoy claimed that the injuries arose at work as a result of on-the-job stress caused by friction with his supervisor.

The county argued that the injuries were caused by lawful, nondiscriminatory, good faith disciplinary actions and were barred by the good faith personnel action defense.

The court of appeal agreed with the county, and found the migraines were barred by the defense. The court concluded that section 3208.3(h) precludes recovery for physical manifestations, migraines in this case, which “are directly and solely resulting from the psychological injury suffered as a result of good faith personnel actions.” To hold otherwise, according to the court, would undermine the intent of the law to limit stress claims because of their potential for fraud and abuse.

The court emphasized that its decision is limited to cases where there is no evidence the employee suffered on-the-job stress apart from that caused by the good faith personnel action. If the work stress and its related physical symptoms are caused by bad faith actions, such as outrageous, objectively unreasonable conduct on the part of a manager, those injuries would still be compensable.

1. Lab. sec. Code 3208.3(h)

2. Rolda v. Pitney Bowes, 66 Cal. Comp. Cases 241 (2001) (en banc); Rice v. Automobile Club of Southern California, Cal. Wrk. Comp. P.D. LEXIS 93 (2022)

3. Larch v. Contra Costa County, 63 Cal. Comp. Cases 831 (1998) (Significant Panel Decision)

4. San Francisco Unified School District v. WCAB (Cardozo), 190 Cal. App. 4th 1 (2010)

5. County of San Bernardino v. Workers’ Compensation Appeals Board, 203 Cal. App. 4th 1469 (2012)