The Undocumented Worker and Workers' Compensation Eligibility

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					Spring, 2008                             Compensation Courier 2008                        VOLUME 1 ISSUE 1

 
 

From the Chair


by Phillip W. Jarrell
I hope everyone enjoys this edition of the Courier. I would like to thank all of the authors who contributed
articles as well as Amanda Schwartz of our office for her assistance. I encourage everyone to become
involved in the Committee. We have an excellent group of attorneys in this organization and there are
many opportunities and activities available through the Committee. If anyone has ideas for future articles,
please feel free to contact me. I hope to see all of you at future DRI events. Thank you.


Phillip W. Jarrell
Dukes, Dukes, Keating & Faneca, P.A.
2909 13th Street, Sixth Floor
Post Office Drawer W
Gulfport, MS 39502
TEL: (228) 868-1111
FAX: (228) 863-2886
jarrell@ddkf.com
 
 

Feature Articles

The Undocumented Worker and Workers’ Compensation Eligibility
by Kent M. Smith
There is no doubt the immigration debate will on the forefront of public’s mind with the upcoming
Presidential election later this year. Therefore, it is important to for employers, insurance carriers, and
attorneys to have an understanding of where the current law stands on whether an undocumented worker
is eligible for workers’ compensation benefits in order to constructively engage in the debate on
immigration reform.

Currently, a number of state and federal courts have held that immigration status is not relevant to
enforcement of a number of worker protection laws, including workers’ compensation. At least four states;
California, Florida, Nevada, and Virginia include within their workers’ compensation statutes language
which would seem to clearly cover all aliens including legal aliens and illegal aliens. Thirteen states;
including Alabama, Arizona, Arkansas, Colorado, Illinois, Michigan, Montana, Nebraska, North Carolina,
North Dakota, South Dakota, Texas and Utah, include statutory language which clearly references aliens
with ambiguity as to whether illegal aliens as well as legal aliens are covered. The remaining 32 states
make no mention of aliens within the workers’ compensation statute. Most of the statutes define
employee broadly but make no mention of aliens either in language which includes or excludes coverage.
Irrespective of a state’s specific treatment of aliens within the statutory language, at least 16 states,
including Colorado, Connecticut, Florida, Georgia, Iowa, Louisiana, California, Michigan, New Jersey,
North Carolina, Oklahoma, Oregon, Pennsylvania, Maryland, Tennessee and Texas have addressed the
issue by case law and have found either explicitly or by implication that illegal aliens are covered by the
state workers’ compensation statue.

There does not currently exist, in any state, strong support for denying coverage to illegal aliens. In those
states which have addressed the issue recently, the trend is clearly in favor of maintaining compensability
for illegal aliens. The rationale behind this trend towards compensability for illegal aliens can loosely be
categorized as follows:
                   1.   Statutory construction supports compensability;

                2.    The contract for employment existed despite the immigration violations on
                     behalf of petitioner;

                3.    Other states have allowed compensability;

                4.     Public policy. The public policy contends that if illegal aliens are not protected by
                     the state’s workers’ compensation statute, unscrupulous employers could, and
                     perhaps would, take advantage of this class of persons to engage in unsafe practices
                     with no fear of retribution, secure in the knowledge that society would have to bear
                     the cost of carrying for these injured workers.

In Safe Harbor Employer Services Inc v. Sinto Valazquez, 860 So.2d 984 (Fla. Dist. Ct. App. 2003), the
Florida court noted that The Federal Immigration Reform and Control Act (IRCA) does not contain
express preemption language and then stated, in conclusory fashion, that IRCA does not so thoroughly
occupy the field so as to require a reasonable inference that Congress left no room for states to act.

In Continental P.E.T. Technologies, Inc. v. Palacias, 604 S.E.2d 627 (Ga. App. 2004), the Georgia court
noted the employer’s argument that Congress has regulated the field of the status of illegal aliens so
extensively as to make clear its intent to control the employment status of those persons. The court
concluded that although IRCA had accompanying regulations addressing in detail the hiring of
undocumented aliens they do not purport to intrude into the areas of what protections a state may afford
these aliens.

In Correa v. Waymouth Farms Inc 664 N.W.2d 324 (Minn, 2003) the Minnesota Supreme Court held that
aliens who are not authorized to work could receive temporary total disability. Minn. Stat. '176.101 subd.
1(g) provides that temporary total disability compensation shall cease if the total disability ends and the
employee fails to diligently search for appropriate work within the employee’s physical restrictions.
Correa remained under medical care and work restriction following his termination. The employer argued
Correa was not entitled to temporary total disability benefits because he could not be lawfully employed.
Evidence at trial demonstrated that Correa had complied with the diligent work search requirements of the
statute, however, he had not become re-employed. Upon review of the United State Supreme Court’s
decision in the Hoffman Plastic Compounds v. National Labor Relations Board, 535 U.S. 137, 122 S.Ct.
1275, 152 L.Ed.2d 271 (2002), and the IRCA, the Minnesota Supreme Court found:

                As written, the IRCA does not prohibit unauthorized aliens from receiving workers’
                compensation benefits generally or temporary total disability benefits conditioned on a
                diligent job search specifically. Aside from the prohibition on tendering fraudulent
                documents, IRCA does not prohibit unauthorized aliens from seeking or accepting
                employment in the United States.


Id, at p.329. Citing IRCA legislative history, the Correa court noted that the IRCA is not aimed at
impairing existing state labor protections. The court found that the words of the Act, when given their
plain meaning, permit unauthorized aliens to receive temporary total disability benefits. Id. “Because the
IRCA does not preclude payment of temporary total disability benefits and the language of our Act is
clear, we do not have occasion to consider the policy question Waymouth Farms urges us to address.
Therefore, we conclude that unauthorized aliens are entitled to receive temporary total disability benefits
conditioned on a diligent job search.”

The Kansas Supreme Court recently issued an opinion in Coma Corp. v. Kansas Dept. of Labor, 154
P.3d 1080 (Kan. 2007) that upheld the right of an undocumented worker to enforce an employment
contract. The undocumented plaintiff was promised $6.00 per hour but was paid approximately $1.00 per
hour. The employer argued that if it was liable, it was not liable for more than minimum wage, as the
claimant could not enter into a legal employment contract. The Kansas court held that Hoffman Plastics
did not preempt state law. It also held the employment contract was enforceable. The Coma court also
in dicta, strongly suggested it would find undocumented aliens eligible for workers’ compensation. Id. at p.
1091.

In a recent California case, a California appeals court held that immigration status is irrelevant to a claim
for unpaid prevailing wages. Reyes v. Van Elle, Ltd., 148 Cal. App. 404, 604 (2007). A number of states
have held that undocumented workers are entitled to workers’ compensation. See 3-66 Larson’s
Workers’ Compensation section 66.03. Ruiz v. Belk Masonry Co., et. al., 559 S.E.2d 249 (N.C. App.
2002) (affirming right of undocumented workers to receive workers’ compensation benefits.) Design
Kitchen and Baths v. Lagos, 388 Md. 718, 882 A.2d 817 (2005) (undocumented worker injured in a work-
related injury accident was an employee covered by Maryland’s workers’ compensation laws); Farmer
Bros. Coffee v. Workers’ Compensation Appeal Bd., 133 Cal. App. 4th 533 (Cal. Ct. App. 2005) (state’s
workers’ compensation laws applicable to all workers regardless of immigration status).

Employers have advanced the argument that it is against public policy to reward undocumented workers
by awarding them workers’ compensation benefits. At least one court has turned this argument on its
head by pointing out that to deny benefits would actually reward the employer who knowingly hires the
illegal alien. Reinforced Earth Co. v. Workers’ Compensation Appeal Board, 749 A.2d 1036 (Pa. Comm.
1999). Specifically, the court noted that employers would actually be encouraged to hire undocumented
workers safe in the knowledge that obtaining workers’ compensation insurance would be unnecessary.
Id.at p.1039. In Flores v. Amigon, 233 F. Supp. 2d 462, 463 (E.D.N.Y. 2002), the court stated:

        Indeed, it is arguable that enforcing the FLSA’s provisions requiring employers to pay proper
        wages to undocumented aliens when the work has been performed actually furthers the goal of
        the IRCA, which requires the employer to discharge any worker upon discovery of the workers’
        undocumented alien status. 8 U.S.C. '1324a(a)(2). If employers know that they will not only be
        subject to civil penalties, 8 U.S.C. '13234a(e)(4)(A), and criminal prosecution, 8 U.S.C.
        '1324a(f)(1), when they hire illegal aliens, but they will also be required to pay them at the same
        rate as legal workers for work actually performed, there are virtually no incentives left for an
        employer to hire an undocumented alien in the first instance. See Patel v. Quality Inn So., 846
        F2d at 704 (noting that the AFLSA’s coverage of undocumented aliens goes hand in hand with
        the policies behind the IRCA. If the FLSA did not cover undocumented aliens, employers would
        have an incentive to hire them. Whatever benefit an employer might have been gained by paying
        less than the minimum wage is eliminated and the employer’s incentive would be to investigate
        and obtain proper documentation from each of his workers. See also Contreras v. Corinthian
        Vigor Ins., 25F. Supp2s at 1056 (noting that the IRCA’s legislative history strongly suggests that
        Congress believed that undocumented aliens would continue to be protected by the FLSA and
        finding that permitting an employer to circumvent the labor laws as to undocumented aliens
        permits abusive exploitation of workers and creates an unacceptable economic incentive to hire
        undocumented workers by permitting employers to underpay them) (citing Sure-Tan, Inc. v.
        NLRB, 467 U.S. 883, 104S.Ct. 2803, 81 L.Ed.2d 732).

A primary argument against compensability for illegal aliens is that the Hoffman Plastics case establishes
that Federal law preempts state law on this issue. The argument is that regardless of state law
embodied by statute and interpretative decisions, compensability must be denied because federal
legislation, namely the IRCA of 1986, has preempted the field. The court’s strong statements in Hoffman
Plastics regarding the importance of IRCA brought into clear focus the conflict between IRCA and most
state workers’ compensation statutory schemes. While the Hoffman Plastics majority was not addressing
a workers’ compensation statute, the opinion makes clear a direct violation of the core policy of IRCA to
award back pay to an illegal alien for years of work not performed, for wages that would not lawfully have
been earned, and for a job obtained in the first instance by a criminal fraud. “We find, however, that
awarding back pay to illegal aliens runs counter to the policies underlying IRCA.” Hoffman Plastics, at p.
1283. A fair reading of the court’s opinion in Hoffman Plastics establishes to the extent a state statute or
interpretative opinion defines employee to include illegal aliens, then that definition will clearly be at odds
with IRCA. Therefore, the question remains whether the state’s statutes and policies are constitutionally
valid or must give way pursuant to the doctrines of preemption and to the Federal immigration policy?

So far this question remains ambiguous on whether Federal preemption will be a valid legal defense.
Most states have affirmatively determined that undocumented worker is eligible for some workers’
compensation benefits and have withstood litigation arguing the contrary. To date, the United States
Supreme Court has not opined on whether an undocumented worker is eligible for workers’ compensation
benefits and the Federal government has not legislated specifically on the issue, outside the IRCA.
 
[1] Mr. Smith is an associate at Scheldrup Blades Schrock Sand Aranza P.C., where he practices in
workers’ compensation defense, civil litigation, immigration law, and criminal law. He can be reached at
ksmith@scheldruplaw.com. Charles A. Blades’s originally authored the outline Workers’ Compensation
and Our Immigrant Workforce which parts were adapted for this article by Mr. Smith. Mr. Blades can be
reached at cblades@scheldruplaw.com.

“Turning the Tables: Using an Employee’s Own Actions to Defeat Their
Workers’ Compensation Claim.”  
by Richard W. Lenkov and Justin T. Nestor

I. Introduction

Given the “no-fault” nature of workers’ compensation programs, defense counsel often face an uphill
battle in defending employees’ claims against employers for accidental injuries allegedly sustained at
work. With the abrogation of the “traditional” affirmative defenses, what options are left to defend these
claims? Often, one only has to look at the nature of the employee’s own actions to find a viable defense
to compensability of their workers’ compensation claim.


                                         II. The “No-Fault” Problem
Workers’ compensation programs in the United States are state regulated with laws determined by each
state legislative body and implemented by a state agency. Programs were adopted in the early 1900’s to
provide benefits to workers suffering from occupational injury or disease. Ultimately, the programs
adopted had a few common principles and similar categories of benefits, although the details concerning
the level of benefits provided and the administrative mechanisms used to deliver the benefits varied
dramatically from state to state, and still do.

The basic principle underlying workers’ compensation programs was that injured workers would receive
benefits without regard to fault and employers in return would receive limited liability. Essentially,
employees are entitled to benefits if the injury was caused by their employment, regardless of who
caused the injury, and employers would be responsible for specific benefits in exchange for the

                                                            
 
elimination of lawsuits for negligence. Elimination of lawsuits against employers for negligence was
certainly welcomed, but what did the employers have to give up in exchange for this limited liability?

One important “trade off” for employer’s limited liability was the abrogation of traditional negligence
defenses. Many workers’ compensation systems insure employees against the operation of the doctrines
of contributory negligence, assumption of the risk, and the fellow servant rule. Roberts v. Consolidation
Coal Co., 208 W.Va. 218, 539 S.E. 2d 478 (2000). As such, the misconduct of an employee, whether
simply negligence or even willful disregard of the employer’s rules, often has no bearing upon whether an
employee’s injury is compensable. Barry v. Aetna Life & Cas. Co., 133 Ga.App. 527, 211 S.E.2d 595
(1974); and Merchant v. Pinkerton’s Inc., 50 N.Y.2d 492, 407 N.E.2d 443, 429 N.Y.S.2d 598 (1980).

On the other hand, some statutes provide benefits only if the employee did not intentionally cause the
event that results in the injury and some preclude compensation for employees injured because of the
deliberate or willful misconduct. Delware Tire Center v. Fox, 401 A.2d 97 (Del. Super., 1979), judgment
aff’d, 411 A.2d 606 (Del., 1980); Ex Parte Bowater, Inc., 772 So.2d 1181 (Ala. 2000); Lumbermans Mut.
Cas. Co., Inc. v. Amerine, 139 Ga.App. 702, 229 S.E.2d 516 (1976); Cavender v. Bodliy, Inc., 550
N.W.2d 85 (S.D., 1996). But, before any type of misconduct will be held to bar recovery of compensation,
it must be the proximate cause of the harm for which compensation is sought. DeMichaeli & Associates
                                                  nd
v. Sanders, 167 Ind.App. 669, 340 N.E.2d 796 (2 Dist. 1976).


                                III. The “Traditional Negligence Defenses”
The key loss to employers with the enactment of “no-fault” workers’ compensation systems was the loss
of traditional negligence affirmative defenses like contributory negligence, comparative fault, and
assumption of the risk. Workers’ compensation statutes that abrogated these common law defenses
have survived constitutional claims that they deprive employers of their property without due process of
law. Boston & M.R.R. v. Armburg, 285 U.S. 234, 52 S. Ct. 336, 76 L.Ed. 729 (1932).

The common law doctrine of contributory negligence bars recovery when the plaintiff’s own negligence
                                                     th
contributed to the injury. The latter half of the 20 century saw the gradual decline of this harsh doctrine
as states either judicially or legislatively replaced contributory negligence with the concept of comparative
fault.

Comparative fault concepts range from pure comparative fault, which allocates liability to each party on a
percentage basis unless the plaintiff is 100% negligent, to systems of modified comparative fault which
permit courts to bar recovery when the plaintiff’s percentage of fault is at or above 50% or 51%.

Assumption of the risk is the legal doctrine that a plaintiff is not entitled to compensation, if knowing of a
dangerous condition, voluntarily exposed himself or herself to the risk that caused the injury. In the
workers’ compensation context, the theory was that the employee implicitly assumed all of the ordinary
and usual risks of a job. This common law defense was commonly used to defend employee injury cases
prior to the enactment of workers’ compensation laws.

An employee’s conduct will be subject to three basic types of workers’ compensation statutes. The most
common kind of statute contains no “affirmative defenses” based on the employee’s misconduct, except
perhaps self-injury and intoxication. A second type of statute makes the employee’s willful misconduct a
defense. A third type makes certain types of misconduct, such as failure to use safety devices or
violation of law, either a complete defense or grounds for a reduction in the award.

Some states’ workers’ compensation laws specifically address the traditional negligence defenses. For
example, Indiana’s statute provides as follows:

        “No such injured employee shall be held to have been guilty of negligence or contributory
        negligence where the injury complained of resulted from such employee’s obedience or
        conformity to any order or direction of the employer or of any employee to whose orders or
        directions he was under obligation to conform or obey, although such order or direction was a
        deviation from other rules, orders, or directions previously made by such employer.
        I.C. 22-3-9-2.

Despite the differences between each state’s treatment of the traditional common law defenses, there is
one common theme…the claimed injury must causally relate to the employment. Workers’ compensation
acts will look at injuries to determine whether they “arise out of” and are “in the course of” the injured
party’s employment. The distinction between compensable and non-compensable injuries is generally
distinguished by prohibited activities that do not constitute a departure from the course of employment
and those that do. Specifically, this distinction draws a line between prohibited methods of doing the
employee’s regular job, and prohibited activities outside of or incidental to the main job duties. This can
include acts for personal benefit and personal comfort activities among others.

Thus, the importance of early investigation into the facts and circumstances surrounding a claimed work-
related injury can make a world of difference when defending these claims. Defense counsel should look
away from traditional methods of defending cases, i.e., the traditional negligence defenses, and look to
investigating whether the injured employee’s own actions can provide a viable defense to their workers’
compensation claim. Two general categories of defenses based on an employee’s own action which
have evolved include an employee’s personal risks unrelated to the employment and an employee’s
deviation from the course and scope of employment.


                              IV. Personal Risks Unrelated to Employment
Some of the most difficult claims are those which the employee sustained injuries in the course of the
employment (i.e., was on the job and was during working hours), but a question exists as to whether the
accident and resulting injury arose out of the employment because the risk was purely personal to the
employee or entirely unrelated to the work. The following are some examples of defense strategies
available where an employee is injured by activities involving risk personal to them and unrelated to their
employment.

                                                A. Intoxication
Generally, intoxication is not a per se bar to a workers’ compensation claim, unless the employee was so
intoxicated as to be no longer able to follow the employment and thus the injury did not arise out of the
employment. In some jurisdictions, a claimant’s entitlement to workers’ compensation benefits is barred if
the injury or death was caused by the employee’s intoxication. Smith v. Workers’ Comp. Appeals Bd.,
                                            th
123 Cal.App.3d 763, 176 Cal.Rptr. 843 (5 Dist., 1981); Delaware Tire Center v. Fox, 401 A.2d 97 (Del.
Super., 1979), judgment aff’d, 411 A.2d 606 (Del. 1980); Parro v. Industrial Com’n, 167 Ill.2d 385, 657
N.E.2d 882 (1995); and DeMichaeli & Assoc. v. Sanders, 167 Ind.App. 669, 340 N.E.2d 796 (2nd Dist.
1976). Generally, however, intoxication alone at the time of the accident is not a sufficient basis for
denying workers’ compensation benefits because intoxication alone does not necessarily constitute a
departure from employment sufficient to preclude recovery. Republic Indemnity Co. v. Workers’ Comp.
Appeals Bd., 138 Cal.App.3d 42, 187 Cal.Rptr. 843 (2nd Dist. 1982); Dale v. Trade Street, Inc., 258 Mont.
349, 854 P.2d 828 (1993); and Phelps v. Positive Action Tool Co., 26 Ohio St.3d 142, 497 N.E.2d 969
(1986).

For an employee’s intoxication to constitute a defense to a workers’ compensation claim, there must be
proof by the employer that the worker’s intoxication was a substantial factor in causing the injury.
Republic Indemnity Co. v. Workers’ Comp. Appeals Bd., 138 Cal. App. 3d 42, 187 Cal.Rptr. 843 (2nd Dist.
1982); Kindel v. Ferco Rental, Inc., 258 Kan. 272, 899 P.2d 1058 (1995). Thus, while an employer raising
the employee’s intoxication as a defense has the burden of proving the intoxication was a proximate
cause or substantial factor in bringing about the accident, death or injury, the employer is not required to
prove the intoxication was the sole proximate cause of the accident and resulting injury or death. Smith v.
Workers’ Comp. Appeals Bd., 123 Cal. App. 763, 176 Cal.Rptr. 843 (5th Dist. 1981); Sidney for Sidney v.
Raleigh Paving & Patching, Inc., 109 N.C.App. 254, 426 S.E.2d 424 (1993). If the worker’s intoxication
has been proven, some states statutorily presume the worker’s injury was caused primarily by the
intoxication. R. P. Hewitt & Associates of Florida, Inc, v. Murnighan, 382 So.2d 353 (Fla.App. 1st Dist.,
1980). However, this presumption ordinarily may be rebutted by sufficient evidence of other cause
because if the presumption was irrebutable, it would violate the worker’s constitutional right to due
process. Recchi America v. Hall, 692 So.2d 153 (Fla. 1997).

Some states’ workers’ compensation acts provide a statutory defense based on the employee’s
intoxication. A word of caution, even though the workers’ compensation act may provide a statutory
defense for intoxication of the employee, the causation requirement will still likely need to be satisfied.

For example, Louisiana’s Workers’ Compensation Act provides “no compensation shall be allowed for an
injury caused, by the injured employee’s intoxication at the time of the injury.” LSA-R.S. 23-1081(1)(b).
Similarly, Indiana’s Workers’ Compensation Act provides as follows:

        “No compensation is allowed for an injury or death due to the employee’s knowingly self-inflicted
        injury, his intoxication...or his knowing failure to perform any statutory duty. The burden of proof
        is on the defendant.”
        I.C. 22-3-2-8.

Thus, if an employee’s intoxication is suspected as a cause of the claimed work-related injury, defense
counsel should make sure a thorough investigation is undertaken to determine whether it was a
substantial factor is causing the accident and resulting injury or death. This defense will require scientific
proof of intoxication and will likely require expert testimony to refute the employee’s argument that the
intoxication was not a substantial factor in causing the accident. Counsel should also remember the
burden of asserting this defense, whether statutory or not, is on the employer. In states where proof of
the employee’s intoxication creates a presumption the injury was occasioned by the intoxication, counsel
should be prepared for the employee’s attempts to rebut the presumption with sufficient evidence of other
causes.

Although a difficult defense from a proof perspective, the employee’s intoxication at the time of the injury
can be an effective defense strategy under the proper circumstances and factual situation. Another
viable defense strategy based on an employee’s personal risk involves employees injured in fights where
they are the aggressor.

                       B. Assaults and Fights Where Employee is the Aggressor
Generally, an injury to an employee as a result of an assault by a co-employee committed in the course of
employment and arising out of some incident or condition of employment, and not done for solely for
personal reasons, is compensable as arising out of the employment. State Compensation Ins. Fund v.
Industrial Acc. Comm’n of Cal., 38 Cal. 2d 659, 242 P.2d 311 (1952); and Doe v. Purity Supreme, Inc.,
422 Mass. 563, 664 N.E.2d 815 (1996). On the other hand, an injury arising from an assault on an
employee committed for purely personal reasons does not arise out of the employment and is not
                                                                                  st
compensable. Tampa Maid Seafood Products v. Porter, 415 So.2d 883 (Fla.App. 1 Dist., 1982); and
McCurry v. Container Corp. of America, 982 S.W.2d 841 (Tenn., 1998).

The fact that an assault was provoked by the injured employee (i.e., the aggressor) does not necessarily
render the injury non-compensable although it may do so if the aggression amounts to willful misconduct.
State Compensation Ins. Fund v. Industrial Acc. Comm’n of Cal., 38 Cal. 2d 659, 242 P.2d 311 (1952).
However, in some states, the aggressor who brings on self injury will barred from recovery. Armour & Co.
v. Industrial Comm’n, 397 Ill. 433, 74 N.E.2d 704 (1947). Of note, in cases involving the issue of who was
the initial aggressor, courts have found that there can only be one initial aggressor. Franklin v. Industrial
Comm’n, 341 Ill.App.3d 128, 791 N.E.2d 1171 (1st Dist., 2003).

Consequently, early investigation to determine who the initial aggressor in assault cases is important in
determining compensability. Likewise, investigation into the cause and circumstances of the assault is
critical to determining whether the employee’s injuries are compensable. If the circumstances warrant, an
employee’s involvement in a fight where they are the initial aggressor is an effective defense strategy
which may bar their workers’ compensation recovery.
                                   C. Acts for Purely Personal Benefit
Another area where an employee’s own actions may bar their workers’ compensation recovery is when
they are performing acts purely for their own personal benefit.

Generally, injuries sustained on company premises are found to be compensable, but this is not an
absolute rule of law. The key determination is whether the employee was injured by the nature of the
work they are supposed to be performing or whether the injuries resulted from risks personal to the
employee.

Generally, the rule for denying workers’ compensation benefits for acts performed by employees solely
for their own benefit does not apply to acts of personal convenience or comfort. Price v. Workers’ Comp.
Appeals Bd., 37 Cal.3d 559, 693 P.2d 254 (1984); and Marmolejo v. Dept. of Industry, Labor and Human
Relations, 92 Wis.2d 674, 285 N.W.2d 650 (1979). The “personal comfort doctrine,” sometimes called
the “personal convenience exception,” was developed to cover situations where an employee is injured
while taking a brief pause to tend to the necessities of life. Thus, acts that are reasonably necessary to
the health and comfort of an employee while at work (i.e., satisfaction of thirst, hunger, other physical
demands, or protection from excessive cold) are incidental to the employment. Injuries sustained during
the performance of these acts of personal comfort are generally compensable as arising out of and in the
course of the employment. Mazzone v. Connecticut Transit Co., 240 Conn. 788, 694 A.2d 1230 (1997);
and Meredith v. Jefferson County Property Valuation Administrator, 19 S.W.3d 106 (Ky. 2000).

Nonetheless, even if the personal activity of the employee is involved, the requirement that the accidental
injury arose out of the employment is not eliminated by application of the personal comfort doctrine. The
activity must be reasonably foreseeable and incidental to the employment to entitle the employee to
compensation. Likewise, if an employee voluntarily exposes themselves to a risk outside any reasonable
exercise of their duties, the resulting injury will not be considered to have occurred during the course of
                                                                                         st
the employment. O’Donnell v. City of Chicago, 126 Ill.App.3d 548, 467 N.E.2d 971 (1 Dist., 1984); and
Weiss v. City of Milwaukee, 208 Wis.2d 95, 559 N.W.2d 588 (1997).

Also, an employee’s injury arising from a violation of an employer’s rule relating to acts done for personal
benefit is not compensable because it does not arise out of the employment or because it constitutes
willful misconduct. Saunders v. Industrial Comm’n, 189 Ill.2d 623, 727 N.E.2d 247 (2000); and Boatright
v. Dothan Aviation Corp., 278 Ala. 142, 176 So.2d 500 (1965).

Again, a thorough investigation by defense counsel is key to determining whether an employee’s injuries
sustained while performing purely personal activities is compensable. Careful consideration should be
made with regard to whether the employee’s actions arose out of or in the course of their employment,
and whether the employee violated the employer’s rule regarding acts for personal benefit or comfort.


                                     V. Deviation from Employment
Having examined some of the ways an employee’s workers’ compensation recovery may be barred due
personal risks unrelated to their employment, another category of defenses which will preclude recovery
is when the employee’s actions deviate from the course and scope of their employment. But, when do an
employee’s own actions completely remove them from the course and scope of their employment? What
exceptions have state legislatures and courts created to determine when an employee’s own actions
have taken them outside the course of their employment so that an injury sustained is not compensable
under workers’ compensation?

                                              A. Horseplay
Generally, injuries sustained by workers engaging in practical jokes or horseplay are not compensable
under workers’ compensation because the injuries do not arise out of the employment. McKnight v.
Consolidated Concrete Co., 279 Ala. 430, 186 So.2d 144 (1966); and Lincoln v. Whirlpool Corp., 151
                                 rd
Ind.App.190, 279 N.E.2d 596 (3 Dist. 1972). However, this rule has been limited in some jurisdictions to
cases in which the injured employee participates in the act. Pacific Employers Ins. Co. v. Industrial Acc.
Comm’n, 26 Cal.2d 286, 158 P.2d 9 (1945); and Ford v. Barcus, 261 Iowa 616, 155 N.W.2d 507 (1968).
This has sometimes been referred to as the “non-participant exception.”

Different jurisdictions hold that not all conduct like this is to be considered as a departure from the
employment. For example, some cases have allowed compensation where although the injured
employee engaged in horseplay, they had abandoned it at the time of the injury, thus breaking the causal
relationship between the horseplay and the injury. Baird v. Travelers Ins. Co., 98 Ga.App. 882, 107
S.E.2d 579 (1959); and Rex-Pyramid Oil Co. v. Magan, 287 Ky. 459, 153 S.W.2d 895 (Ky.App., 1941).

Some states via their workers’ compensation act have allowed employers to protect themselves from
liability for certain hazards, such as horseplay among employees, by adopting and publishing rules
prohibiting such activities. I.C. 22-3-2-8 (Indiana); and Western Union Tel. Co. v. Owens, 82 Ind.App.
474, 146 N.E. 427 (Ind. App., 1925).

Generally, injuries sustained by employees engaging in horseplay will not be compensable as the
activities do not arise out of or in the course of the employment. In states where the establishment of
rules prohibiting such activities will bar recovery for injuries sustained during these activities, employers
should adopt and publish rules to protect against liability for this type of workers’ compensation claim.

                                    B. Violation of Company Rules
It would seem that an employee injured engaging in horseplay should not be able to claim workers’
compensation benefits, but what about when the employee violates a company rule?

Generally, violation of a safety rule or company policy may take the employee entirely out of the scope of
their employment and any resulting injury that occurs during the violation is not compensable. Saunders
v. Industrial Comm’n, 189 Ill.2d 623, 727 N.E.2d 247 (2000). Likewise, an employee’s violation of work
safety rules will bar recovery where the violation constitutes willful misconduct. Adams on Behalf of
Boysaw v. Hercules, Inc., 21 Va.App. 458, 465 S.E.2d 135 (1995). But, violation of an employer’s rule is
not a per se bar to recovery and an employee’s negligence in violating an employer’s rule is not
necessarily a bar to receiving workers’ compensation benefits. Brown v. Hertz Corp., 246 So.2d 32
(La.App., 1971), writ denied, 258 La. 576, 247 So.2d 394 (1971); Lukesh v. Ortega, 85 N.M. 444, 623
P.2d 564 (1980); and Durrah v. Washington Metropolitan Area Transit Authority, 760 F.2d 322 (Ct. App.
D.C., 1985).

However, if an employer’s rule sets the boundaries of employment, when violated, the accident does not
arise out of and in the course of employment and is not compensable. Scheller v. Industrial Comm’n of
Arizona, 134 Ariz. 418, 656 P.2d 1279 (Ariz.App., 1982); Arkansas State Police v. Davis, 45 Ark.App. 40,
870 S.W.2d 408 (1994). Even under this view, if an employment rule pertains only to the means or
manner of performing a job, a violation will not bar the employee’s recovery because the employee is still
within the scope of employment when the rule is violated. Schroeder v. Industrial Comm’n of Arizona,
132 Ariz. 455, 646 P.2d 886 (Ariz.App., 1982); and Mitchell v. State, Dept. of Educ., 85 Haw. 250, 942
P.2d 514 (1997).

Of note, denying compensability for a violation of a safety rule is subject to proof of a causal relationship
between the violation and injury. Swillum v. Empire Gas Transport, Inc., 698 S.W.2d 921 (Mo.App. S.D.,
1985). Generally, to bar or reduce a claim for workers’ compensation based on a violation of a safety
rule, the employer must prove the following:

        (1)  At the time of the injury, the employer had in effect a rule or policy requiring the employee’s
            use of the safety appliance;
        (2) The rule or policy was regularly enforced by the employer;
        (3) The injured worker had actual knowledge of the rule or policy; and
        (4) The employee willfully and intentionally failed or refused to follow the rule or policy.

Thus, although violation of a company rule or policy is not a per se bar to an employee’s recovery, careful
consideration and investigation should be undertaken to determine whether violation of the rule will
prohibit the employee’s recovery under workers’ compensation. Likewise, employers should determine
whether violation of a safety rule consistent with the previously mentioned requirements will protect them
from liability for an employee’s violation of a safety rule.

Navigating the rules as to whether an employee’s violation of a company rule will bar recovery under
workers’ compensation can be difficult given the difficult task of determining the nature of the rule which
was violated. But, when will unreasonable risk undertaken by an employee which results in their injury or
death bar recovery under workers’ compensation?

                                            C. Unreasonable Risk
Generally, an employee’s misconduct, whether simple negligence or willful disobedience of workplace
rules, has no bearing on whether an injury is compensable. Barry v. Aetna Life & Cas. Co., 133 Ga.App
527, 211 S.E.2d 595 (1974); and Merchant v. Pinkerton’s Inc., 50 N.Y.2d 492, 407 N.E.2d 443, 429
N.Y.S.2d 298 (1980). But, some statutes provide for benefits only if the employee did not intentionally
cause the event that results in the injury. In fact, some statutes preclude recovery for employees injured
because of their deliberate and reckless indifference to danger, or because they have engaged in willful
misconduct. Delware Tire Center v. Fox, 401 A.2d 97 (Del. Super., 1979), judgment aff’d, 411 A.2d 606
(Del. 1980); and Lumbermans Mut. Cas. Co., Inc. v. Amerine, 139 Ga.App. 702, 229 S.E.2d 516 (1976).

Again, before any type of misconduct will be sufficient to bar recovery, it must be the proximate cause of
the harm for which recovery is sought. DeMichaeli & Assoc. v. Sanders, 167 Ind.App. 669, 340 N.E.2d
796 (Ind.App., 1976). Likewise, an employer defending on the grounds that the employee’s injury
resulted from the employee’s willful misconduct has the burden of proof to establish this defense. Wright
v. Gunther Nash Min. Const. Co., 614 S.W.2d 796 (Tenn., 1981).

There are several critical inquiries to determine whether an employee’s own actions constitute
unreasonable risk so as to preclude recovery under workers’ compensation for any resulting injuries.
First, a careful investigation should be conducted to determine whether the employee’s actions constitute
a deliberate and reckless indifference to danger, or because they have engaged in willful misconduct. If
so, the employee’s recovery under workers’ compensation may be barred. Likewise, employers should
have clearly established safety rules and determine whether the employee’s actions will preclude
recovery even though they do not rise to the level of willful misconduct or reckless indifference.


                                                 VI. Conclusion
The by-product of the “no-fault” nature of state workers’ compensation systems makes it more difficult for
employers to defend against claims where the employee’s own actions should be taken into account in
determining compensability. Without the use of traditional affirmative defenses, defense counsel is faced
with finding ways to defend claims for accidental injuries where the employee’s own actions caused or
contributed to the accident and resulting injuries. Generally, the defenses based on an employee’s own
actions will require proof of causation, i.e., that the conduct caused the claimed injury.


Employers should carefully review their existing safety rules and make sure that employees have actual
knowledge of the rules. Further, a thorough investigation for all claims where the employee’s own actions
possibly caused or contributed to the accidental injuries should be undertaken to determine whether a
viable defense exists without reliance on traditional negligence defenses. Through the use of alternative
defense theories and thorough investigation, defense counsel can find ways to mitigate abrogation of the
traditional common law defenses to defeat workers’ compensation cases.

Richard W. Lenkov is an equity partner, and Justin T. Nestor is an associate at BryceDowney, LLC in
Chicago. Mr. Lenkov focuses his practice on workers’ compensation and general liability defense, and is
an active member of DRI. Mr. Nestor’s practice focuses on workers’ compensation and general liability
defense.
 
Recent Development In Subrogation In Mississippi  
by Phillip W. Jarrell

Mississippi Code Annotated § 71-3-71 gives workers’ compensation carriers a statutory right to
reimbursement of benefits paid to an injured worker who recovers from a responsible third party.
Although Mississippi courts had consistently applied this statute since its adoption in 1942 and given
carriers a right to subrogation, the statute’s applicability was questioned in 2006 by Fed. Mut. Ins. Co. v.
McNeal, 943 So.2d 658 (Miss. 2006).


In McNeal, a carrier that had paid a claimant workers’ compensation benefits failed to formally intervene
in the claimant’s third-party suit against the party responsible for the work injury. After the claimant
settled with the third-party defendant, the carrier filed a motion to compel compliance with the subrogation
statute, requesting that the court order Claimant to reimburse it for the workers’ compensation benefits
paid. In denying the carrier’s motion, the lower court cited the common law “made whole” doctrine,” which
is “the general principle that an insurer is not entitled to equitable subrogation until the insured has been
fully compensated” and noted that the carrier had not intervened in the action.

On appeal, the carrier argued that the lower court had erred in holding that the “made whole” doctrine
applied to statutory workers’ compensation subrogation liens. In a 6-3 decision, the Supreme Court of
Mississippi held that the lower court should not have applied the equitable “made whole” doctrine to
workers’ compensation carriers’ right of subrogation because the right of subrogation was statutory rather
than contractual.

Other jurisdictions who have addressed this precise issue have reached varying results. Montana, who
has a constitutional provision stating that “[n]o person shall be deprived of [a] full legal redress for injury
incurred in employment for which another person may be liable…if such immediate employer provides
coverage under the Workmen's Compensation Laws…”, see MON. CONST. of 1972, art. II, § 16 (1972),
has held that the made whole doctrine applies to workers’ compensation carrier’s right to subrogation.
See Oberson v. Federated Mut. Ins. Co., 126 P.3d 459, 463 (2005). On the other hand, the Supreme
Court of Kentucky reached the same result as the Supreme Court of Mississippi and found that the
common law "made whole" rule did not apply to workers' compensation insurer's rights to subrogation
because Kentucky Revised Statute § 342.700(1) specifies that the "made whole" rule cannot preclude
statutory recovery. AIK Selective Self Ins. Fund v. Bush, 74 S.W.3d 251, (Ky. 2002). The Court of
Appeals of Maryland has refused to rule on the issue. See Podgurski v. OneBeacon Ins. Co., 821 A.2d
400 (Md. 2003).

The other interesting issue addressed by the McNeal court was whether the carrier had standing to
appeal the lower court’s decision without intervention. The court applied a three-prong test that had
been previously used by the Fifth Circuit for determining whether a non-party could appeal and found that
the carrier could take the appeal. Despite its ruling, the Court stated, “we stress that the better practice
for insurers who anticipate the possible need for judicial assistance in enforcing their liens is to file a
formal intervention in accordance with the provisions of Rule 24 of the Mississippi Rules of Civil
Procedure.”

The Supreme Court of Colorado also gave cautionary advice in terms of carrier’s right to intervene when
it stated, “[w]ithout the carrier's participation, the federal court distributed the proceeds of the settlement
according to Missouri law. Had the carrier intervened to protect its own interests it might have argued
successfully that Colorado law applied.” Eckhardt v. Village Inn, 826 P.2d 855, 862 (Colo. 1992). Choice
of law is merely one issue that could arise in the context of third-party litigation that potentially affects a
carrier’s right to recovery. Other examples include objection to the lien and claim for attorney’s fees. In
consideration of these issues combined with the Court’s advice in McNeal, it appears prudent that carriers
who have workers’ compensation liens formally intervene in third-party cases filed by claimants so that
judicial assistance can be sought as a matter of right.
Phillip W. Jarrell is a shareholder with the firm of Dukes, Dukes, Keating & Faneca in Gulfport, MS. Phillip
practices primarily in the areas of the defense of workers’ compensation claims, insurance defense, civil
litigation and employment law.