Jeremy Cox began working for Saks Fifth Avenue as a sales associate in the handbag department in November 2011, just before the holiday shopping season. In April 2012, he filed a claim for workers' compensation benefits, alleging that he developed anxiety disorder, panic disorder, agoraphobia, insomnia and weight loss due to work-related stress. Following hearings, a New York State Workers' Compensation Law Judge (WCLJ) agreed that Cox had a valid claim. The full Workers' Compensation Board reversed the ruling, finding that Cox hadn't demonstrated that he was exposed to any stress that was any greater than that experienced by his peers. Cox appealed, and the N.Y. state appeals court reversed, sending the case back to the Workers' Compensation Board and giving Cox a second chance to prove his claim.
At his workers' comp hearing, Cox testified that, during a promotional event for a manufacturer of high-priced luxury goods, his supervisor told him to fabricate reserve orders by falsely indicating that individual customers intended to purchase the manufacturer's handbags for the purpose of increasing the store inventory. As directed, Cox submitted two fabricated orders during the event, which required him to provide the customers' personal information including credit card numbers.
One of Cox's supervisors testified that he became upset during the promotional event and that she heard him tell another supervisor that he didn't want to submit false orders. Both supervisors denied that credit card numbers were included in the reserve orders, but a coworker testified that such information was included.
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All employees pressured
The WCLJ found Cox's testimony to be credible and concluded that he sustained a mental injury as a result of "the stress of being directed to engage in deceptive business practices." This stress was greater than that experienced in a normal work environment because "pressure to engage in unethical and illegal practices … can't be considered a normal work environment." The board disallowed the claim, however, finding that, because all the employees in the department were pressured to place reserve orders and were given the same instruction, Cox's stress wasn't greater than that of similarly situated workers.
The appeals court rejected the board's analysis, noting that the basis for the board's conclusion that Cox wasn't subject to stress greater than that experienced in a normal workplace was that other employees were similarly directed to engage in wrongful conduct. The appeals court called the board's analysis "untenable," noting that "the imprimatur of 'normal' cannot be placed upon a workplace where an employee is directed to carry out a deceptive, unethical or potentially illegal practice because an employer also gave that direction to other employees."
The appeals court found no other evidence from which to conclude that directions to place false reserve orders constituted part of a normal work environment for similarly situated employees. Other Saks' employees testified that corrective action—including termination—had been taken when similar practices occurred at the store in the past, and Cox testified that he would have been fired for such conduct in other upscale department stores where he had previously worked. The appeals court reversed the board's ruling and returned the case to the board for further action consistent with the appeals court's decision.
The case is Cox v. Saks Fifth Avenue, 520289 (App. Div., 3rd, Decided July 9, 2015).
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