Ohio Supreme Court Creates New Breed of Workers' Compensation Claim

By Dave McCarty

The Ohio Supreme Court issued a surprising decision that may significantly broaden the scope of compensable workers' compensation claims.

The case of Bailey v. Republic Engineered Steels, Inc., 91 Ohio St.3d 38 (2001), involved an employee who suffered from depression after he accidentally ran over and killed a co-worker while operating a tow motor. The employee's workers' compensation claim was denied by the Industrial Commission because he personally did not suffer any physical injury in the accident. The Commission found the claim to be not compensable because the definition of "injury" in the workers' compensation statute excludes a psychiatric condition unless that condition has "arisen from an injury or occupational disease." That is, the Commission determined that a worker seeking allowance of a psychiatric condition must also suffer some adverse physical condition. The employee appealed the matter to the Stark County Court of Common Pleas, which agreed with the Commission and held that the employee had not suffered a compensable injury. The Court of Appeals, however, reversed and ordered the case reinstated. On appeal to the Ohio Supreme Court, the court of appeals' decision was upheld and, in a 4 - 3 decision, the Court held that the "physical injury" requirement was satisfied by the fact that a third party, the killed co-worker, suffered compensable physical injuries. The Supreme Court's majority decision, as well as that of the well-reasoned dissent, focuses on the Court's interpretation of the legislative intent and the so-called "plain meaning" of the statute.

The Bailey case could result in a significant increase in workers' compensation liability for Ohio employers. The broad language used by the majority is troubling because it is not clear that the Court will even require that an employee seeking allowance of a solely psychiatric claim be a witness to the injury. Even assuming that the Court does impose such a requirement in the future, one serious accident at a worksite could still result in the pursuit of dozens or even hundreds of workers' compensation claims by witnesses to the accident.

It is too early to tell just how adversely employers will be impacted by this case as it represents a "new breed" of psychological claims. We will keep you updated as the Industrial Commission and its hearing officers issue decisions interpreting the decision, and we will attempt to provide recommendations for cutting down on the risk of these claims.