The News You Need for May 24
We check in on compliance topics in Arizona and Minnesota
Compensability of Mental Injuries in Arizona
Chris Parker
Do You Know the Rule?
In Arizona, many employers are likely to face a workers’ compensation claim for mental injuries at some point. Workers seeking compensation for these injuries have a high standard to meet. But to avoid claims that lack true merit, it’s helpful for employers to know that standard – and how to show that it has not been met.
Learn about compensability in Arizona or across the U.S. on Simply Research
Burden of Proof
The claimant has to establish all elements of a mental injury claim. Employers should still be prepared to respond by show that one or more of those elements has not been met, in the event that a judge decides that the employee has a case.
General Standard for Compensability
A mental injury arises out of and in the course of employment, and thus is compensable, if the claimant shows that:
1. The work-related stress was a substantial contributing cause of the injury; and
2. The work-related stress was unexpected, unusual, or extraordinary.
A.R.S. § 23-1043.01(B).
Substantial, Contributing Cause
To establish this element of the above standard, the employee will have to show that the stress or event was a significant factor in causing the mental illness or condition.
Unexpected, Unusual, or Extraordinary
When determining whether an injury-causing event is unexpected, unusual, or extraordinary, judges consider whether a reasonable person with the same or similar job duties and training as the claimant would view it as such.
The key question is whether the work-related event imposed stress on the employee that was unexpected, unusual or extraordinary. If the stress is inherent in the job – for example, the stress a paramedic might experience responding to a car accident involving serious injuries – then it is not compensable. This is because it is, at least for that employee, a normal aspect of the job.
Lessons for Employers
When writing job descriptions and employment contracts, detail the types of stressful events an employee may face as a component of the particular position.
When evaluating or defending against a mental illness injury claim, consider whether the employee was involved in similar events in the past while working for the employer and how the employee responded to those incidents.
When evaluating or defending against a claim, try to obtain medical and mental health treatment records. This is not only to confirm a diagnosis of the mental condition the employee claims to have (such as PTSD or generalized anxiety disorder). It may be useful in identifying when the employee’s mental health concerns began and what caused them. It’s always possible that incidents outside of work, rather than the stressful event at work, triggered the challenges.
Minn. Top Court Sends Incapacity Question to Workers’ Compensation Judge under State Law
Case File
Is incapacity something that a workers' compensation court or a district court should handle in Minnesota? According to the state's top court, the answer comes down to the question of whether it's an issue under the Workers' Compensation Act. Simply Research subscribers have access to the full text of the case.
Case
Lykins v. Anderson Contracting, Inc., Nos. A24-0548, A24-0549 (Minn. 05/21/25)
What Happened
Due to an explosion at work, a worker suffered "life-changing physical and cognitive injuries." The employer and employer's insurer agreed to a workers' compensation settlement.
Roughly a year later, the parties agreed to an addendum. About five years later, the court appointed a conservator for the worker, and the conservator petitioned to set aside the settlements.
According to the petition, the settlements were invalid because they were based on fraud due to the attorneys' failure to abide by statutory safeguards designed to protect the interests of incapacitated employees.
The Minnesota Workers' Compensation Court of Appeals directed a compensation judge to determine whether the worker appeared to be incapacitated at the time of the settlements. Both parties appealed to the Minnesota Supreme court.
Rule of Law
Under Minnesota workers' compensation law, an agreement to settle a claim is not valid if a conservator is required and the employee doesn't have a conservator.
What the Minnesota Supreme Court Said
According to the Minnesota Supreme Court, the WCCA should have referred the matter to a compensation judge for a determination of the worker's capacity when he signed the settlements.
Nonetheless, the court agreed with the WCCA regarding the worker's incapacity, noting that his "medical provers were concerned about his cognitive functioning at the relevant time."
Workers' Comp 101: In Minnesota, an "incapacitated person" is someone who lacks sufficient understanding or capacity to make or communicate responsible personal decisions and who has demonstrated deficits in behavior that evidence an inability to meet personal needs."
The court found sufficient evidence to support the WCCA's findings that there was no dispute that the worker could not meet his personal needs and to create a dispute of fact as to the worker's capacity make personal decisions when he signed the settlements.
So, what was the solution, according to the court?
The workers' compensation judge had authority to determine incapacity due to the fact that Minnesota's Workers' Compensation Act incorporates the definition of "incapacitated person," making it an issue that arose under the act.
Where the WCCA went wrong, in the Minnesota Supreme Court's eyes, was when it required the compensation judge to refer the matter to the district court for an ultimate determination of incapacity.
"Instead, the WCCA should have referred the matter to a compensation judge to determine whether [the worker] was an incapacitated person ... when he signed the settlements," the court wrote.
The court vacated the WCCA's instructions to the compensation judge requiring referral of the capacity issue to the district court.
Takeaway
In Minnesota, issues of incapacity require only interpretation and application of the state's Workers' Compensation Act and are thus justiciable before workers' compensation courts.
Comp & Circumstance — May 29
The next Comp & Circumstance is happening May 29 at 2 p.m. Eastern time.
Share what's happening in your part of the #WorkersCompensation world and build community with others in our industry.
Wanna come? Email fferreri@workerscompensation.com