On appeal from final decision of New Jersey Department of Labor, Division of Workers' Compensation.
Shebell, Long and Landau. The opinion of the court was delivered by Shebell, P.J.A.D.
[267 NJSuper Page 396] This case involves an application of the Workers' Compensation Act (Act) which is one of first impression in New Jersey. Neil Cairns (petitioner) appeals from the dismissal on the merits of his claim petition by Stanley Levine, Supervising Judge of the Division of Workers' Compensation. The petitioner alleged that he sustained emotional distress and mental suffering as a result of receiving a notice of layoff on August 23, 1989, after thirty-three years of continuous employment with the City of East Orange (respondent). In his oral decision of September 22, 1992, Judge Levine concluded that layoff notices are inherent to employment and petitioner's psychiatric injuries could not be regarded as "work-related" or "arising out of employment."
A detailed recitation of the facts is presented because of the unique nature of the case. In 1988, at age 61, petitioner had been a civil service employee of respondent for thirty-three years. At the time his claim petition was filed, he was Superintendent of Public Buildings and Grounds earning approximately $56,000 per year. He supervised about 20 to 30 people.
On or about February 1, 1988, respondent's office of personnel processed and sent out approximately 700 "general layoff notices" to all employees of East Orange, except for police, fire, and certain library workers. Respondent's personnel manager testified that, as required by state law, these general notices included a 45-day layoff notification and were sent because of "fiscal constraints" to all employees within an organizational unit that may be affected by a specific layoff notice at a later time. Petitioner confirmed that the general notice of layoff did not cause him any significant concern because, as a city employee, he recognized it as a notice of potential layoff and he had received several such notifications in the past.
While at work on February 11, 1988, petitioner was hand-delivered a "specific notice of layoff," which informed him that he was being laid off his job on March 31, 1988. It appears that his department had been abolished shortly before he received this layoff notice, and that approximately twenty such notices were distributed to members of his department. The personnel manager doubted whether any "specific notice of layoff" had been sent to employees who had twenty or more years of service. Petitioner was probably one of the ten longest serving employees of respondent at the time he received the specific notice of layoff.
Petitioner asserted that he reacted to the specific notice of layoff with shock and disbelief. He felt there had been some mistake because he had the most seniority of anyone in the department and he thought that the last to be hired was to be the first fired. Upon receipt of this notice, he felt ill and went to see the respondent's authorized doctor within a couple of days. Judge
Levine characterized petitioner to be "the most impressively credible witness to ever have appeared before me."
Petitioner was not satisfied with the first doctor so he went to see and was treated by the head psychiatrist at East Orange General Hospital. Along with his shock, anger, and disbelief, petitioner experienced insomnia, loss of appetite (resulting in a weight loss of fifty pounds), inability to concentrate, change in his temperament, and negative effects on his marital relationship. At times, petitioner and his wife were compelled to sleep in different beds because of petitioner's insomnia. Petitioner's wife testified that petitioner no longer helped with chores around the house and had lost interest in his children and grandchildren. Petitioner had never before experienced any of the above mentioned problems nor sought any form of psychiatric counselling.
After the initial consultation, petitioner was treated by the psychiatrist every two weeks. The psychiatrist diagnosed a post traumatic stress syndrome and major depressive illness related to the anger that petitioner had about being laid off or the potential of being laid off. The psychiatrist advised petitioner to take time off from work. He prescribed an anti-anxiety drug and a sedative.
While the petitioner was not working because of his medical problems, he received a letter dated March 15, 1989, from the New Jersey Department of Personnel advising him as to "demotional or bumping rights" arising from his seniority. Respondent twice extended the date of the layoff, for another forty-five days each time. The layoff notice was thereafter rescinded and petitioner returned to work on or about August 15, 1988, against the instructions of his psychiatrist. As of August 15th, 1988, petitioner had been out of work for a total of six months.
Petitioner's treatment continued after he returned to work, but his depression worsened and the doctor again recommended that he stop work. Petitioner left his job at the end of July, 1991. He officially retired in April, 1992. Petitioner testified that he would not have retired at that date, but for the medical problems he was having at the time. Judge Levine found that petitioner's receipt
of the specific notice of the layoff was the "causal triggering mechanism for [petitioner]'s medical problem and disability."
Judge Levine correctly stated that the central issue is whether a layoff notice can be considered "work-related" or "arising out of employment" for purposes of workers' compensation. The Act requires an employer to pay an employee compensation for personal injuries, occupational disease, or death, " arising out of and in the course of his employment." N.J.S.A. 34:15-30 and N.J.S.A. 34:15-7. Thus, whether the claim is considered one for accidental injury or occupational disease is of no consequence here as the Act only requires payment of benefits if the injury "arises ...