WC Risk Alert: There Can Be Only One Contract of Employment
Vincent Burley was a resident of Georgia, and in May 2000, U.S. Foods, Inc. offered him employment as a delivery truck driver. This offer of employment was extended by letter, which Mr. Burley signed. He was in South Carolina when he signed the offer letter and was assigned to South Carolina by the company. His responsibilities as a delivery truck driver included deliveries in Georgia and South Carolina, but no travel to North Carolina. In 2002, U.S. Foods merged with another company and stopped operating in South Carolina. U.S. Foods gave Mr. Burley the option of either terminating his employment and receiving a severance package, or transferring his assignment and supervision to North Carolina. He elected to transfer to North Carolina. After the transfer, Mr. Burley made deliveries to different customers and earned more money, but still never had any deliveries in North Carolina. On September 23, 2009, he suffered a back injury during a delivery in Georgia. His claim was accepted under the Georgia Workers’ Compensation Act and he received benefits for the injury. On July 8, 2011, Mr. Burley filed a claim for benefits with the North Carolina Industrial Commission.
After the hearing, the Deputy Commissioner held that the Commission did not have jurisdiction over the claim. The Full Commission affirmed, and the Court of Appeals reversed. The Court held that Mr. Burley’s transfer to the North Carolina division involved modification of his employment contract, which was enough to find that a contract was “made” within North Carolina for purposes of establishing jurisdiction. There was a dissent by Judge Dillon noting that the modification of the employment contract was insufficient for the Commission to have jurisdiction.
The Supreme Court reversed the Court of Appeals holding that modification of an employment contract does not change the location of that contract. The Court indicated that there can be only one contract of employment. The Court noted that once an identifiable site has been established and there has been an offer and acceptance of the employment contract, that location will be used for purposes of jurisdiction regardless of subsequent contract modifications. The Court further noted that N.C.G.S. § 97-36 included plain language regarding where a contract for employment was “made” and not where the contract was “modified.”
In this case, Mr. Burley executed his contract in South Carolina when hired by U.S. Foods. The Court held that the subsequent internal transfer of supervision and assignment failed to establish a new employment contract, and the site of the original contract controlled for jurisdiction. The Court characterized Mr. Burley’s situation as a mere internal transfer of supervision without a change in work capacity. Justice Hudson dissented, noting that the Court’s holding barred jurisdiction even where there were substantial modifications to the employment contract and employment relationship. Judge Hudson noted that this went against the spirit of the North Carolina Workers’ Compensation Act to be liberally construed to provide benefits to injured employees. Instead, Judge Hudson saw the modification as establishing a new employment contract based on the facts of the case, thus changing the location of the contract to North Carolina for purposes of jurisdiction.
Risk Handling Hints: The decision in Burley seems to establish that, short of a drastic modification of the employment contract, there will be only one location for purposes of jurisdiction. The location where the employment contract was made, once “identifiable,” will be the site for jurisdiction. The Court did not outline specific factors to consider when determining whether a modification is significant enough to establish a new employment contract.