State v. Gates

        IN THE SUPREME COURT OF THE STATE OF DELAWARE

STATE OF DELAWARE,                      §
                                        §     No. 602, 2018
       Employer Below,                  §
       Appellant,                       §     Court Below: Superior Court
                                        §     of the State of Delaware
       v.                               §
                                        §     C.A. No. K18A-04-002
NICHOLAS GATES,                         §
                                        §
       Claimant Below,                  §
       Appellee.                        §

                           Submitted: May 8, 2019
                           Decided: June 25, 2019

Before VALIHURA, VAUGHN, and SEITZ, Justices.

Upon appeal from the Superior Court.   AFFIRMED.

John J. Klusman, Esquire (Argued), and Kenneth L. Wan, Esquire, Tybout Redfearn
& Pell, Wilmington, Delaware, for Appellant, State of Delaware.

Walt F. Schmittinger, Esquire (Argued), and Candace E. Holmes, Esquire,
Schmittinger and Rodriguez, P.A., Dover, Delaware, for Appellee, Nicholas Gates.




VAUGHN, Justice:
                                  I. INTRODUCTION

       The State of Delaware appeals from an order of the Superior Court that

affirmed a determination by the Industrial Accident Board (the Board) that Nicholas

Gates was working within the course and scope of his employment when he was

injured in a motor vehicle collision.           At the time of the collision, Gates was

employed by the State as a road-maintenance equipment operator for the Department

of Transportation (DelDOT). The collision occurred while he was responding to a

“call-back” after his normal work hours. He was called back to attend to a road-

side accident. In other words, he had completed his normal shift for the day and

left for home, but was called back to perform whatever road maintenance might be

necessary as a result of the road-side accident. As was common practice with call-

backs, he was to proceed first to the DelDOT yard to get equipment and to then

continue on to the road-side accident site. His collision occurred while he was on

his way to the DelDOT yard.

       Gates sought workers’ compensation benefits from the State for his injury.

At the hearing before the Board, the State argued that State of Delaware Merit Rule

4.16 1 and a document titled “Call-Back Pay Guidelines and Recommended

1
  The Merit Employee Relations Board, which adopted the Merit Rules, lists this rule as Rule 4.16.
See State of Delaware Merit Rule 4.16, available at https://merb.delaware.gov/wp-content/
uploads/sites/131/2018/03/2018-Revised-Merit-Rules-complete.pdf. This rule is codified in the
Delaware Administrative Code as Rule 5.16. See 19 Del. Admin. C. § 3001-5.16. Because the
parties have referred to it as Rule 4.16, we will as well. Therefore, unless otherwise indicated,
references and citations to the Merit Rules in this Opinion will be to the rules provided on the

                                                1
Procedure” (the Call-Back Pay Guidelines) 2 were part of Gates’s employment

contract. It further argued that according to these provisions, Gates was not to be

paid for a call-back until he arrived at the DelDOT yard. Because Gates’s collision

occurred before he arrived at the yard, the State argued, his injury occurred outside

the course and scope of his employment and was, therefore, not compensable under

Delaware’s Workers’ Compensation Act (the Act). 3 The Board looked to the

parties’ prior course of conduct to determine the terms of the employment contract

and found that Gates’s injury was compensable under the Act because, based on the

parties’ prior course of conduct, he “was working within the course and scope of his

employment contract when the motor vehicle accident occurred.”4

       The Superior Court affirmed the Board’s decision.

       The State makes two arguments on appeal to this Court. First, it contends

that the Board committed legal error by misapplying the principles set forth by this

Court to determine if an employee was injured within the course and scope of

employment. It repeats the argument it made to the Board that the terms of Gates’s

employment—Merit Rule 4.16 and the Call-Back Pay Guidelines, in particular—

indicate that he was not to be paid for a call-back until he arrived at the DelDOT



Merit Employee Relations Board’s website.
2
  App. to Appellant’s Opening Br. at A109 [hereinafter Call-Back Pay Guidelines].
3
  19 Del. C. §§ 2301-2397.
4
  Appellant’s Opening Br. Ex. B, at 12 [hereinafter Bd. Decision].

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yard and that, therefore, the Board erred in finding that his injury occurred within

the course and scope of his employment. Second, it contends that the Board’s

decision was not supported by substantial evidence because Gates admitted at the

Board hearing that he was not paid for the call-back on the day of the collision.

      Gates contends that notwithstanding Merit Rule 4.16 or the Call-Back Pay

Guidelines, the State’s actual practice was to pay him (and his co-workers) for a call-

back from the time the call was received. Accordingly, he argues that the Board

correctly determined that he was acting within the course and scope of his

employment at the time of the collision.

      For the reasons that follow, we conclude that the Superior Court, and therefore

the Board, should be affirmed. The Board applied the correct legal standard by first

looking to the terms of the employment arrangement (or contract) to determine

whether Gates’s injury occurred within the course and scope of his employment.

The Board, moreover, acted within its discretion in finding, based on Gates’s

unrebutted testimony as to the parties’ course of conduct prior to the collision, that

the terms of Gates’s employment contract established he was to be paid for a call-

back from the time he received the call and that, at the time of the collision, he was

working within the course and scope of this contract. These factual findings are

supported by substantial evidence and will not be disturbed on appeal. Based on




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these factual findings, the Board did not err in determining that Gates’s injury was

compensable under the Act.

                 II. FACTS AND PROCEDURAL HISTORY

      The Board held a hearing on March 15, 2018, at which it heard testimony from

Gates and a human-resource representative who testified on the State’s behalf. The

Board also considered documents submitted by the State regarding overtime service,

stipulated facts, and competing medical expert testimony.      The critical issue at the

hearing was whether Gates was acting within the course and scope of his

employment at the time of the collision.

      At the hearing, Gates testified that at the time of the collision, he had worked

for the State for four months as an equipment operator, with his primary job duties

being road maintenance.     His regular hours of employment were 7:00 a.m. to 3:00

p.m., Monday through Friday. He was classified as essential personnel and drew

overtime pay for work outside his regular hours.           Such after-hours work is

classified as “call-back” time.   He was required to respond to call-backs, and a

failure to respond could result in termination.   He testified that the State frequently

called him back for work after hours. For a call-back, he explained, he was paid a

minimum of four hours overtime even if he only worked one hour. According to

Gates, at the time of the collision, crew leaders recorded the regular working hours

of employees, but employees recorded their own call-back hours. He also testified


                                           4
that he would record his call-back time from the moment he received the call and

would stop recording his time when he completed the job.               Gates testified that on

the day of the collision, he received the call-back around 3:30 p.m., after his shift

had ended at 3:00 p.m.

       The State’s human-resource representative, Brittany Ford, testified regarding

Merit Rule 4.16 and the Call-Back Guidelines, explaining that for someone in

Gates’s position, call-back pay is calculated from the time the employee arrives at

the yard, not from the time of the phone call.5 She explained the State’s position

that Merit Rule 4.16 and the Call-Back Guidelines formed part of Gates’s

employment agreement. She testified that Merit Rule 4.16 and other Merit Rules

were referenced in the one-hour orientation provided to all new employees, although

she acknowledged that the State did not provide physical copies of the Merit Rules

to new employees.          Instead, the Merit Rules were merely referenced during

employee orientations, and the employees were instructed as to where they could

access them. She also admitted that the call-back policy was not discussed during

new-employee orientations and acknowledged that supervisors were responsible for

explaining the call-back policy to new employees.



5
  App. to Appellant’s Opening Br. at A67-68; see also Call-Back Pay Guidelines (“Call-back pay
is paid to the employee from the time the employee arrives at the designated worksite and begins
work until the time the employee has completed all call-back requests and has left the worksite.”
(emphasis omitted)).

                                               5
         Gates testified that he had not received formal training regarding timesheet

submission, and he was unaware of whether he ever received copies of Merit Rule

4.16 or the Call-Back Guidelines.                  He explained that the older and more

experienced employees told him that the start time for overtime began at the time he

received the call-back. He had been called back many times prior to the collision

and had, consistent with the more experienced employees’ instructions, submitted

multiple time sheets for approval without issue. On all of the timesheets where

call-back time was involved, he recorded his start time from the moment he received

the call. He testified that for the first time, on the day of the collision, he was not

paid overtime after receiving a call-back.

         On April 9, 2018, the Board issued its decision finding that Gates was acting

within the course and scope of his employment contract when he was injured and

that, therefore, his injury was compensable under the Act.              First, the Board

explained that although “no actual written employment contract was presented,” the

State submitted a policy (Merit Rule 4.16 and the Call-Back Guidelines), which it

contended was part of Gates’s employment contract. 6                Recognizing that “no

agreement, rule, regulation or other device shall in any manner operate to relieve any

employer . . . from any liability created by [the Act],”7 the Board determined that,



6
    Bd. Decision at 9 & n.1.
7
    Id. at 9-10 (alteration omitted) (quoting 19 Del. C. § 2305).

                                                   6
with respect to defining the employment agreement or contract, the “critical issue is

what is actually done as part of the employment and not what is written in a policy,”

especially when “the evidence reflects that the rule or provision is not followed or

strictly applied.”8

          The Board then discussed the testimonial evidence regarding the employment

arrangement to determine the terms of Gates’s employment contract. The Board

credited Gates’s testimony as showing that he and his co-workers had always

recorded the call time as the start time when they received a call-back, that he was

required to respond to call-backs, and that a failure to respond could result in

termination.      As to the State’s evidence, the Board discussed Ford’s testimony

regarding the Merit Rules. Specifically, the Board noted that “the merit rules are

‘referenced’ at the new employee orientation,” that “copies of the rules (and

presumably copies of the ‘Guidelines and Recommended Procedure’) are not

provided to new employees,” that “the callback policy is not discussed during new

employee orientation,” and that “the supervisors are responsible for explaining the

policies to employees.”9 Moreover, although Ford testified that employees are not

paid for mileage for travel to call-backs but instead are paid from the time they arrive

at the yard, she agreed that she was not Gates’s direct supervisor, she had no



8
    Id. at 10.
9
    Id. at 12.

                                           7
responsibility for reviewing timesheets or call-back time for employees, and there

are auditors who monitor and oversee timekeeping.

       Given the evidence presented, and considering the totality of the

circumstances, the Board determined that Gates “was working within the course and

scope of his employment contract when the motor vehicle accident occurred.” 10

“Weighing the evidence presented and assessing [Gates’s] credibility,” the Board

explained, “[Gates] was engaged in his contractual duties for Employer when the

injury occurred. [Gates’s] employment contract as an equipment operator, and its

required job duties, clearly ‘contemplated’ his driving to the yard to retrieve a

vehicle and equipment, and is, therefore, work related.”11 The Board concluded

that Gates was “engaged elsewhere in or about the employer’s business where the

employee’s services require the employee’s presence as part of such service at the

time of the injury” and that, therefore, his injury was compensable under the Act.12

                                 III. DISCUSSION

       Generally, this Court’s review of an Industrial Accident Board decision is

“limited to a determination of whether there is substantial evidence to support the

Board’s findings.” 13    “Substantial evidence means such relevant evidence as a


10
   Id.
11
   Id. (quoting Spellman v. Christiana Care Health Servs., 74 A.3d 619, 625 (Del. 2013) (en
banc)).
12
   Id. at 13 (quoting 19 Del. C. § 2301(19)(a)).
13
   Betts v. Townsends, Inc., 765 A.2d 531, 533 (Del. 2000).

                                            8
reasonable mind might accept as adequate to support a conclusion.” 14              Alleged

errors of law are reviewed de novo.15

       To be eligible for workers’ compensation benefits for personal injury, the

claimant must prove that the injury was sustained “by accident arising out of and in

the course of employment.”16      “Personal injury sustained by accident arising out of

and in the course of the employment” covers an employee while he or she is (1)

“engaged in, on or about the premises where the employee’s services are being

performed, which are occupied by, or under the control of, the employer (the

employee’s presence being required by the nature of the employee’s employment)”

or (2) “engaged elsewhere in or about the employer’s business where the employee’s

services require the employee’s presence as a part of such service at the time of the

injury.”17     “The determination of whether an injury arises out of and in the course

of employment is highly factual, and is resolved under a totality of the circumstances

analysis.”18

       Under Spellman v. Christiana Care Health Services, the Board (or a reviewing

court) must first look to the terms of the employment agreement to determine



14
   Oceanport Indus., Inc. v. Wilm. Stevedores, Inc., 636 A.2d 892, 899 (Del. 1994) (internal
quotation marks omitted).
15
   Arrants v. Home Depot, 65 A.3d 601, 605 (Del. 2013).
16
   19 Del. C. § 2304.
17
   Id. § 2301(19)(a).
18
   Spellman, 74 A.3d at 623.

                                             9
whether a particular injury occurred within the course and scope of employment.19

“If the evidence of the contractual terms resolves the issue of whether the injury

arose out of and occurred in the course of the claimant’s employment, then the

analysis can end.”20       But if the contract-related evidence is insufficient to resolve

the scope-of-employment issue, the Board (and any reviewing court) may look to

rules of construction created by case law—the “going and coming” rule and its

exceptions—that best further the statutory purpose.21

         The Board found that Gates “was working within the course and scope of his

employment contract when the motor vehicle accident occurred.”22 This finding is

supported by substantial evidence. The Board found credible Gates’s testimony as

to the parties’ actual course of conduct prior to the collision, and the State introduced

no evidence contradicting Gates’s testimony that he had submitted timesheets in the

past where he listed his start time for a call-back as the time he received the call, that

he had been paid in accordance with this, and that no one receiving the timesheets

ever said this was incorrect.

         In addition, the Board’s determination that the parties’ actual course of

conduct was more probative of the contract of employment regarding call-back pay



19
     Id. at 625.
20
     Id.
21
     Id.
22
     Bd. Decision at 12.

                                             10
than Merit Rule 4.16 and the Call-Back Procedure is supported by substantial

evidence.     The document submitted to the Board is a two-page document titled

“Call-Back Pay Guidelines and Recommended Procedure.” 23                         The document

begins by reciting Merit Rule 4.16. The language that the State relies upon—that

“[c]all-back pay is paid to the employee from the time the employee arrives at the

designated worksite and begins work until the time the employee has completed all

call-back requests and has left the worksite”24—is not found in Merit Rule 4.16.

The merit rule discusses call-back pay but makes no mention of when call-back pay

begins when an employee receives a call-back.                 The language that does so is

contained in a separate portion of the document titled “Guidelines for Merit Rule

4.16.”25    The language in the Guidelines for Merit Rule 4.16 is not included in

either the publication of the rules on the Merit Employee Relations Board’s website26

or the Delaware Administrative Code.27            If Gates had never been informed of the

specific provision upon which the State relies and if this provision had not been


23
   Call-Back Pay Guidelines.
24
   Id. (emphasis omitted).
25
   Id.
26
   See State of Delaware Merit Rule 4.16.1, available at https://merb.delaware.gov/wp-content/
uploads/sites/131/2018/03/2018-Revised-Merit-Rules-complete.pdf (“FLSA-covered employees
who have left the work site at the end of their scheduled shift and are called back for overtime
service shall be paid for such service in accordance with the provisions for overtime pay, provided
that minimum total payment is equivalent to four times their regular straight time hourly rate.
Employees shall be paid according to this call back provision or the overtime provision, whichever
is greater, not both.”).
27
   See 19 Del. Admin. C. § 3001-5.16.1 (providing same as Merit Rule 4.16.1 on the Merit
Employee Relations Board’s website).

                                               11
actually followed, then it was never properly incorporated into his employment

contract. In this regard, the witness for the State admitted that the call-back policy

is not discussed during new-employee orientation, could not confirm whether Gates

himself had been so instructed, and could not confirm whether the specific provision

the State relies upon was actually followed at his place of employment.

         The Board found, as a factual matter, that Gates’s employment arrangement

contemplated that he would be compensated for a call-back starting at the time of

receiving the call. This factual finding is supported by substantial evidence and

will not be disturbed on appeal.               Based on this factual finding, the Board

determined that Gates was “engaged elsewhere in or about the employer’s business

where the employee’s services require the employee’s presence as a part of such

service at the time of [his] injury” and, therefore, was injured within the course and

scope of his employment.28 Accordingly, there is no need to consider the going-

and-coming rule or its exceptions.

         Finally, it is necessary to briefly address the State’s specific argument that the

Board’s decision is not supported by substantial evidence because Gates admitted at

the hearing that he was not paid overtime for the day of the collision. The State

contends that this is conclusive proof that the terms of his employment contract did

not include compensation for call-backs starting at the time calls are received. The


28
     Bd. Decision at 13 (quoting 19 Del. C. § 2301(19)(a)).

                                                 12
mere fact that Gates was not paid in accordance with the parties’ prior course of

conduct for the call-back on the day of the collision, however, does not render the

Board’s decision reversible for want of substantial evidence.            Despite this

admission, the Board did not abuse its discretion in crediting Gates’s testimony as

to the parties’ prior course of conduct and in using this testimony to define the terms

of his employment.

                               IV. CONCLUSION

      For the foregoing reasons, the judgment of the Superior Court is affirmed.




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