Injuries Occurring Outside of North Carolina

By: Brian R. Taylor

When a claim involves an injured worker whose injury occurred outside of the State of North Carolina, there is a threshold issue that must be addressed.  That is, does the State of North Carolina properly have jurisdiction over the injured workers’ claim.  This issue is addressed in N.C. Gen. Stat. § 97-36. 

N.C. Gen. Stat. § 97-36 provides that, even if an injury occurs outside of the State of North Carolina, this State may properly have jurisdiction over the injured workers’ claim if at least one of three conditions is met.  The three conditions are as follows: (1) the contract of employment is made in this State, (2) the employer’s principal place of business is in this State, or (3) the employee’s principal place of employment is in this State.  

1. Contract of Employment 

In North Carolina, “[t]o determine where a contract of employment was made, the Commission and the courts of this state apply the ‘last act’ test.”  Murray v. Ahlstrom Indus. Holdings, Inc., 131 N.C. App. 294, 296, 506 S.E.2d 724, 726 (1998).  The last act of contract formation is the “final act necessary to make it a binding obligation.”  Holmes v. Associated Pipe Line Contractors, Inc., 251 N.C. App. 742, 746, 795 S.E.2d 671, 674 (2017).  The most common last act of contract formation is the completion of paperwork, such as a contract of employment.  In today’s virtual world, contracts of employment are often signed remotely.  North Carolina Courts have held that the location of contract formation is the location of the plaintiff upon signing the contract. 

In some scenarios, the North Carolina Court of Appeals has held that orientation and testing activities, rather than the completion of paperwork, constitute the last act of contract formation.  See Taylor v. Howard Transp., Inc., 241 N.C. App. 165, 171, 771 S.E.2d 835, 839 (2015).  In those scenarios, the orientation and/or testing activities are prerequisites to the employment of the injured worker.  Id.  For illustrative purposes, in Taylor, the injured worker was sent a letter inviting him to work for defendant-employer.  Id.  The injured worker negotiated terms with defendant-employer while he remained in North Carolina; however, defendant-employer requested that the injured worker travel to Mississippi to complete orientation, a drug test, a road test, and a physical.  Id.  After the injured worker completed the same, he was hired as an employee for defendant-employer.  Id.  The North Carolina Court of Appeals held that the last act of contract formation occurred in Mississippi, where plaintiff completed the prerequisites which were conditions to his employment with defendant-employer. In other words, the Court’s focus is on the employee’s location at the time all conditions to their employment are completed. 

2. Principal Place of Business 

A “principal place of business” refers to the place where a corporation’s officers direct, control, and coordinate the corporation’s activities.  Hertz Corp. v. Friend, 559 U.S. 77, 92-93 (2010).  The principal place of business is often referred to as the nerve center of the corporation or the corporate headquarters.  Id.  The North Carolina Court of Appeals held in Thomas v. Overland Express, Inc., 101 N.C. App. 90, 98, 398 S.E.2d 921, 926 (1990), that the Court could not separate the word “principal” from place of business and establish a minimum contacts test for application of the North Carolina Workers’ Compensation Act to accidents which occur outside of North Carolina.  In other words, the Court has declined to extend jurisdiction under this prong of N.C. Gen. Stat. § 97-36 for businesses that have some activity in North Carolina, but North Carolina is not the location of their corporate headquarters. 

For practical purposes, the employer’s principal place of business can most easily be determined by looking at the company’s filings with the North Carolina Secretary of State.  The principal office is listed on corporate filings and on the North Carolina Secretary of State’s website. 

3. Principal Place of Employment 

The trickiest and most litigated element of N.C. Gen. Stat. § 97-36 is the employee’s principal place of employment.  In many circumstances, the reason why N.C. Gen. Stat. § 97-36 is implicated in the first place is because the employee works in several different states.  Moreover, N.C. Gen. Stat. § 97-36 itself does not define “principal place of employment.”  Our courts have held that because the term is not defined, the General Assembly is presumed to have intended the term to convey its natural and ordinary meaning.  Perkins v. Arkansas Trucking Servs., 351 N.C. 634, 638, 528 S.E.2d 902, 904 (2000).  The natural and ordinary meaning of the “principal place of employment” is the “most important, consequential, or influential” in relation to the injured worker’s employment.  Id. 

Our appellate courts have found that North Carolina is not an employee’s principal place of employment if the employment has a more significant degree of contact with any state other than North Carolina.  See Davis v. Great Coastal Express, 169 N.C. App. 607, 610 S.E.2d 276 (2005).  To illustrate, in Davis, the injured worker was a truck driver who performed 10% of his truck stops in North Carolina and 18% of his truck stops in Virginia.  Id.  The Court of Appeals held that even though the injured worker performed a significant amount of work in this State, North Carolina could not appropriately retain jurisdiction over the injured worker’s claim because Virginia was the injured worker’s principal place of employment.  Id.  Ultimately, making a determination as to the injured worker’s principal place of employment is a very fact specific task that requires a thorough investigation as to the primary location in which the injured worker performs work-related tasks for the defendant-employer. 

Of course, there are many other issues that may arise in a claim where the injury occurred outside of the State of North Carolina.  Among others, insurance coverage issues could be implicated, potential double recovery issues could be implicated, and, obviously, the compensability of the claim itself always remains an issue. 

As detailed above, each claim involving an injury occurring outside of the State of North Carolina requires a fact intensive investigation that our experienced attorneys handle frequently.