Kelly’s Case

Helen Kelly (plaintiff) worked for Raytheon Corporation for 22 years as an associate training specialist and ran Raytheon’s training center. On Friday, August 19, 1977, Kelly was told she would be laid off. Kelly started crying, could not compose herself, and went home early. Kelly remained upset over the weekend. On Monday, August 22, Kelly was told she could transfer to another department. However, Kelly did not want to work in another department, and she became depressed, developed chest pains, and was taken to a hospital, where she was put on medication. Kelly was out of work for six weeks. Kelly returned to work in her new department on October 5, but on October 14, she again developed chest pains and was taken to the hospital. Kelly lost weight, had difficulty sleeping, and underwent psychiatric treatment for depression. Kelly filed a workers’ compensation claim against Raytheon’s insurer (defendant). Based on the testimony of Kelly’s psychiatrist, a review by a single member of the Industrial Accident Board found that Kelly had been totally disabled since August 22, and that learning she was going to be laid off from one department and transferred to another caused Kelly’s depression. However, because Kelly had not suffered an injury arising out of or in the course of her employment, the single member’s review concluded that Kelly was not entitled to compensation. The reviewing board agreed. The superior court reversed, entered judgment in favor of Kelly, and awarded her compensation. The appeals court affirmed. Raytheon’s insurer appealed.