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In the case of Cramer v Transitional Health Services of Wayne, the Michigan Supreme Court recently upended several decades of legal precedent concerning the evidence required to properly assess and establish compensability for work-related psychiatric injuries. Pursuant to Section 301(2) of the Michigan Workers’ Disability Compensation Act, “mental disabilities…are compensable if contributed to or aggravated or accelerated by the employment in a significant manner.” Further, the statute provides that, “mental disabilities are compensable if arising out of actual events of employment, not unfounded perceptions thereof, and if the employee’s perception of events is reasonably grounded in fact or reality.”
The previous evidentiary standard to assess the statute's “significant manner” requirement was established by the Workers’ Compensation Appellate Commission in the 2001 case of Martin v Pontiac School District. However, the Supreme Court explicitly overturned the Martin test in its recent Cramer decision, finding that the lower courts’ application of the Martin test had evolved over the years to erroneously construe the statutory language of “a significant manner” to mean “the most significant manner.”
In place of the Martin test, the Supreme Court is reverting to a previous totality-of-circumstances standard which was laid out in its 1993 decision from Farrington v Total Petroleum, Inc. Under the Farrington standard, the plaintiff must now demonstrate that the alleged psychiatric injury and resulting mental disability were “significantly caused or aggravated by employment considering the totality of all the occupational factors and the claimant’s health circumstances and non-occupational factors.”
Thus, when evaluating the statutory “significant manner” requirement under the Farrington standard, the Supreme Court held that finders-of-fact in lower courts should now consider: “the temporal proximity of the injury to the work experience, the physical stress to which the plaintiff was subjected, the conditions of employment, and the repeated return to work after each episode.” Further, depending on the specific circumstances of a given case, other relevant factors to consider might include: “the natural history of any underlying or preexisting condition and whether the condition would have worsened naturally in the absence of occupational contributors.” The Court also noted the factors provided in its Farrington decision were “not all inclusive.”