NCCI Court Case Update: Mich. Adopts New Test for Mental Injuries

On July 28, 2023, the Michigan Supreme Court, in Cramer v. Transitional Health Services of Wayne, adopted a new test to determine whether an employee’s mental injuries are compensable under workers compensation (WC). Under the new test, a claimant must show that the mental injury was significantly caused or aggravated by the employment, considering the totality of all occupational factors and all the claimant’s health circumstances and nonoccupational factors.

In this case, an employee filed a claim for WC benefits for physical and mental injuries allegedly sustained at work. A magistrate judge denied compensation for the mental injuries based on the application of a four-factor test created by the 2002 Compensation Appellate Commission decision in Martin v. Pontiac Sch Dist, which has been followed as precedent by Commission panels, and was affirmed in this case by the Court of Appeals as the exclusive test.

On appeal, the supreme court reviewed the relevant WC statute, 418.301(2)—which provides that mental disabilities are compensable if contributed to or aggravated or accelerated by the employment in a significant manner—and concluded that the Martin test, although originally intended as a guide to interpret the statutory term “significant,” became routinely misapplied as the exclusive test for overall compensability. Thus, the court overruled the Martin test, concluding that it was contrary to the statute and imposed a higher-than-required burden on claimants.

The court then adopted a new test based on its 1993 decision in Farrington v Total Petroleum, Inc. Pursuant to this new test, a claimant must demonstrate that the mental injury was significantly caused or aggravated by the employment, considering the totality of all occupational factors and all the claimant’s circumstances and nonoccupational factors. The court offered a list of occupational factors that must be considered when conducting the analysis and added that these factors are “not all inclusive” and must be examined together with the totality of a claimant’s health circumstances.

For more information on other cases monitored by NCCI’s Legal Division, visit previous Court Case Updates and Court Case Insights under the Legal section of INSIGHTS on ncci.com.

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