## Facts

- Nick DePaoli worked for Great A & P Tea Company for about 25 years and managed a supermarket in Goldens Bridge, New York, for roughly two years.
- In mid-1994, the employer replaced two experienced co-managers with two inexperienced co-managers and reassigned the store’s night crew to the day shift, increasing daytime operational pressures.
- DePaoli responded by working longer hours, often seven days per week and more than 70 hours, with associated weight loss and sleep difficulty.
- While working on October 30, 1994, DePaoli experienced severe physical symptoms and sought emergency care; he was diagnosed with panic disorder, hospitalized for five days, and did not return to work for several months.
- During his absence, the replacement co-managers were terminated and the night crew was restored.
- DePaoli sought workers’ compensation benefits, alleging his panic disorder was caused by work-related stress from the staffing and scheduling changes.

## Issues

1. Whether Workers’ Compensation Law § 2(7) bars benefits for a stress-related mental injury when the stress results from employer personnel decisions taken in good faith but not directed at the claimant personally.

## Decision

- The Workers’ Compensation Law Judge disallowed the claim for failure to establish a compensable injury.
- The Workers’ Compensation Board reversed, finding causal relationship to work-related psychological stress and concluding the § 2(7) exclusion did not apply because the events were not directed at DePaoli personally.
- The Appellate Division affirmed the Board.
- The Court of Appeals affirmed, holding § 2(7) did not bar benefits because no personnel decision targeted the claimant directly.

## Legal Principles

- Workers’ Compensation Law § 2(7) excludes certain mental injuries that are solely the direct consequence of lawful, good-faith personnel decisions directed at the claimant (e.g., discipline, evaluation, demotion, termination).
- The § 2(7) exclusion does not apply where the alleged work-related stress arises from operational or staffing decisions that are not directed personally at the claimant, even if they materially increase workload and stress.
- The Workers’ Compensation Board’s factual determination of causal relationship between work-related stress and a mental injury is generally upheld if supported by the record; the remaining question may be statutory application.

## Conclusion

The Court of Appeals upheld an award of workers’ compensation benefits for a panic disorder allegedly caused by workplace stress, concluding that the statutory bar for mental injuries tied to good-faith personnel decisions did not apply because the employer’s staffing and scheduling changes were not directed at the claimant personally.


Matter of DePaoli v. Great A & P Tea Co., 94 N.Y.2d 377 (N.Y. 2000)