Many bullies never outgrow their sandbox mentality. Unfortunately, sandbox bullies often become workplace bullies. Fortunately, California law allows victims of workplace bullying to obtain workers’ comp for stress. In response to “stress claims,” employers often argue that their employees just have their shorts in a knot over “constructive criticism,” “performance evaluations,” or other “good-faith personnel actions.” The “good faith personnel action” defense bars a stress claim where at least 35% of the stress results from such action. But criticism ceases to be a good-faith personnel action when it becomes workplace bullying.
Criticism Can Be a “Personnel Action”
Stress is compensable if “actual events of employment” are “predominantly” responsible for the stress. Stress can even be a gross overreaction to an employment event and still be compensable. In most cases, the employment event or events must be the “predominant cause” (51%) of an employee’s stress. Thus, 49% of his stress can stem from a divorce, foreclosure, or other personal factors and still be compensable. Personal factors can account for even more of an employee’s stress if a “violent act” or direct exposure to a “significant violent act” (e.g., an assault by a workplace bully) is a “substantial cause” (35%) of the stress.
But stress is non-compensable if at least 35% of it results from a lawful, non-discriminatory, good-faith personnel action. The term “personnel action” refers to any “regular and routine” management decision that is adverse to an employee – e.g., discipline, evaluation, transfer, demotion, layoff, and termination. But the action need not directly or immediately affect employment status. For example, criticism, being a “preliminary form of discipline,” is a personnel action. Even “harsh discipline” is a “personnel action” if it isn’t “so clearly out of proportion to the employee’s deficiencies so that no reasonable manager could have imposed such discipline.”
Criticism Can’t Cross the Line Into Workplace Bullying
Employers frequently justify every decision as a personnel action. But the test isn’t just whether a decision is a “personnel action.” In addition to being a personnel action, the decision must be: (1) lawful – e.g., the action must not be in retaliation because the employee exercised a legal right; (2) non-discriminatory – i.e., the employer must not treat the employee differently than his similarly situated co-workers; and (3) in good faith – i.e., the employer must not treat the employee in a manner contrary to the employer’s own policies and procedures, write an employee up for a bogus reason or lie in a peformance evaluation, or otherwise act outrageously.
Harassment, ridicule, and other forms of workplace bullying, though arguably personnel actions, aren’t in good-faith. In one case, an employer couldn’t rely on the “good-faith personnel action” defense to defeat an employee’s stress claim because her supervisor yelled at her and “lost her cool.” But the employee better not be the one who “started it.” Much like an employee who suffers physical injuries in a workplace altercation can’t get workers’ comp if he’s initial physical aggressor, an employee who faces verbal abuse can’t get workers’ comp if his supervisors are merely throwing the verbal abuse back at him.
Even a personnel action that would normally be in good-faith – e.g., giving every slacker employee a pink slip for goofing off – can’t raise the defense if he is merely hanging the threat of termination over his employee’s heads for his own amusement. Labor Code section 3208.3(g) makes the issuance of “frequent” notices of termination or layoff a “bad-faith personnel action.” The meaning of “frequent,” however, is unclear. Thus, the issuance of a pink slip once every six months for three years (i.e., six pink slips) might not be “frequent,” but the issuance of a pink slip once a month for six months might be.
 Lab. Code §3208.3(b).
 Cypress Ins. Co. v. WCAB, 66 Cal.Comp.Cases 1356 (2001)(Writ Denied).
 Lab. Code §3208.3(b)(2).
 Lab. Code §3208.3(h).
 City of Oakland v. WCAB, 99 Cal.App.4th 261 (2002).
 Larch v. Contra Costa County, 63 Cal.Comp.Cases 831, 833 (1998.)
 Contel of California v. WCAB, 63 Cal.Comp.Cases 847 (1998) (Writ Denied).
 Fleming v. Contra Costa County, 63 Cal.Comp.Cases 831 (1998)(Significant Panel Decision).
 County of Kern v. WCAB, 63 Cal.Comp.Cases 1068 (1998)(Writ Denied).
 Los Angeles Unified Sch. Dist. v. WCAB, 66 Cal.Comp.Cases 645 (2001)(Writ Denied).
 Verga v. WCAB, 73 Cal.Comp.Cases 63 (2008).
 Lab. Code §3208.3(g).