## Facts

- Helen J. Kelly worked for Raytheon Corporation for about 22 years as an associate training specialist running the company’s training center.
- On August 19, 1977, her supervisor told her the department was cutting back and she would be laid off; she became distraught, left work early, and remained upset.
- On August 22, 1977, she was told she could transfer to the cable department as a foreperson; she became depressed, developed chest pains, and was hospitalized and medicated that day.
- She was out of work for roughly six weeks, returned October 5, and soon experienced renewed chest pains at work; she was hospitalized again and treated psychiatrically for depression.
- A single member of the Industrial Accident Board (IAB), crediting her psychiatrist, found Kelly had been totally disabled since August 22 and that being told of the layoff and transfer caused her depression.
- The dispute concerned whether this work-triggered emotional injury qualified as a compensable “personal injury arising out of and in the course of employment” under Mass. Gen. Laws ch. 152, § 26.

## Issues

1. Whether a psychiatric disability precipitated by being informed of a layoff and transfer constitutes a compensable personal injury “arising out of and in the course of employment” under Mass. Gen. Laws ch. 152, § 26.
2. Whether compensability depends on any wrongdoing by the employer when the personnel action was undertaken in good faith.

## Decision

- The Supreme Judicial Court affirmed judgment awarding workers’ compensation benefits to Kelly.
- The court held that an employee’s emotional breakdown caused by being told she would be laid off from one department and transferred to another is a compensable personal injury under § 26.
- The court treated the IAB’s supported factual findings (disability and causation) as final and resolved the remaining question as a matter of statutory interpretation.
- The employer’s good faith in making the layoff/transfer decision did not bar compensation.

## Legal Principles

- “Personal injury” under Mass. Gen. Laws ch. 152, § 26 can include purely mental or emotional injury when sufficiently work-connected.
- An injury “arises out of” employment when it originates in a risk, condition, or incident of employment, including employer personnel actions directly related to the employment relationship.
- An injury occurs “in the course of” employment when it happens within the time, place, and circumstances of employment, including work communications by supervisors to employees during working hours.
- Compensability focuses on work connection and causation, not on whether the employer acted wrongfully or negligently.

## Conclusion

The court held that Kelly’s psychiatric disability, found to have been caused by her employer’s layoff and transfer notice communicated at work, was a compensable personal injury arising out of and in the course of employment under Massachusetts workers’ compensation law.


Kelly’s Case, 394 Mass. 684, 477 N.E.2d 582 (Mass. 1985)