Claim for Psychological Injury Should Have Been Upheld—Retail Employee Was Directed to Submit False Reserve Orders for a Product to Deceive Manufacturer

The Workers’ Compensation Law Judge (WCLJ) found a retail employee suffered compensable psychological injury because he was directed by a supervisor to submit false reserve orders for a product in order to deceive the manufacturer.  The Workers’ Compensation Board disagreed and disallowed the claim. The Third Department reinstated the claim, finding the Board’s conclusion was not supported by substantial evidence:

The WCLJ found claimant’s testimony to be credible and determined, among other things, that he had been directed by a supervisor to submit false reserve orders in order to deceive the manufacturer and that credit card numbers were included in the reserve orders. The WCLJ concluded that claimant sustained a mental injury as a result of “the stress of being directed to engage in deceptive business practices” and that this stress was greater than that experienced in the normal work environment because “[p]ressure to engage in unethical and illegal practices . . . cannot be considered a normal work environment.” The Board subsequently disallowed the claim, finding that, because all of the employees in claimant’s department were pressured to place reserve orders and were given the same instruction, claimant’s stress was not greater than that of similarly situated workers.

We reject this analysis. The Board neither contradicted nor commented upon the findings of the WCLJ that claimant’s supervisors directed him to engage in a deceptive business practice by submitting falsified reserve orders, and it did not exercise its power to reject the underlying credibility determinations … . Thus, the remaining basis for the Board’s conclusion that claimant was not subjected to stress greater than that experienced in a normal workplace is that other employees were similarly directed to engage in wrongful conduct. This analysis is untenable; the imprimatur of “normal” cannot be placed upon a workplace where an employee is directed to carry out a deceptive, unethical or potentially illegal practice because an employer also gave that direction to other employees … . The mere fact that other employees may have received the same instruction cannot support this conclusion. Here, there was no other evidence from which it may be concluded that directions to place false reserve orders constituted part of a normal work environment for similarly situated employees. The employer’s witnesses testified that corrective action — including termination — had been taken when similar practices occurred at the store in the past, and claimant testified that he would have been fired for such conduct in other upscale department stores where he had previously worked. Accordingly, we find that the Board’s determination is not supported by substantial evidence … . Matter of Cox v Saks Fifth Ave., 2015 NY Slip Op 06003, 3rd Dept 7-9-15