McIlvaine Trucking, Inc. v. Workers' Compensation Appeal Board

Chief Justice ZAPPALA

dissenting.

I dissent and would affirm the order of the Commonwealth Court. The majority restores the uncertainty over the jurisdiction of workers’ compensation claims that the Legislature sought to eliminate. The enforceability of the parties’ written agreement now depends upon the fortuitous circumstance of where an injury occurs, rather than the specific designation made by the parties themselves. The majority disrupts the legislative scheme by replacing a definite election regarding which state’s law will apply with an indefinite, unforeseeable factor — where the injury occurs.

Furthermore, the majority’s holding would lead to the conclusion that a Pennsylvania resident who is injured in Pennsylvania may disregard a written agreement designating another state as where his employment is principally localized, while a Pennsylvania resident who is injured outside of Pennsylvania is bound by the written agreement.

Under § 305.2(d)(5) of the Workers’ Compensation Act, 77 P.S. § 411.2(d)(5), an employee may enter into a written agreement establishing where the employee’s employment is principally localized when an employee’s duties require him to travel regularly in Pennsylvania and one or more other states. The fact that a claimant’s injury occurred in Pennsylvania does not act to void a valid and enforceable agreement authorized under § 305.2(d)(5).

Section 305(d)(5) provides that

An employee whose duties require him to travel regularly in the service of his employer in this and one or more other *675states may, by written agreement with his employer, provide that his employment is principally localized in this or another state, and, unless such other state refuses jurisdiction, such agreement shall be given effect under this act.

77 P.S. § 411.2(d)(5) (emphasis added).

The Legislature’s purpose in enacting § 305(d)(5) was to allow employers and employees to enter into written agreements that would govern which state’s workers’ compensation laws would apply when an employee whose employment was not principally localized in one state was injured. The provision was adopted to eliminate the uncertainty as to which state’s workers’ compensation law would apply under that circumstance. By refusing to enforce the written agreement executed by Claimant in this case, the majority has undermined the statutory scheme that the Legislature established for those employed in businesses that require regular travel in Pennsylvania and one or more other states.

A claimant may be eligible for benefits under Pennsylvania’s Workers’ Compensation Act when the injury occurs within Pennsylvania.1 The Act also establishes jurisdiction over claims for injuries occurring outside of Pennsylvania in certain circumstances. When the injury occurs outside of the territorial limits of Pennsylvania, a claimant may be entitled to seek benefits under § 305.2(a) of the Act, which provides:

(a) If an employe, while working outside of the territorial limits of this State, suffers an injury on account of which he, ... would have been entitled to the benefits provided by this act had such injury occurred within this State, such employe ... shall be entitled to the benefits provided by this act, provided that at the time of such injury:
(1) His employment is principally localized in this State, or
(2) He is working under a contract of hire made in this State in employment not principally localized in any state, or
*676(3) He is working under a contract of hire made in this State in employment principally localized in another state whose workmen’s compensation law is not applicable to his employer, or
(4) He is working under a contract for hire made in this State for employment outside the United States and Canada.

77 P.S. § 411.2(a).

Under § 305.2(a) of the Act, an employee is entitled to benefits when injured as the result of employment that is principally localized within Pennsylvania or employment arising under a contract for hire executed in Pennsylvania. The Act defines when a person’s employment is principally localized in this or another state as follows:

[W]hen (i) his employer has a place of business in this or such other state and he regularly works at or from such place of business, or (ii) having worked at or from such place of business, his duties have required him to go outside of the State not over one year, or (iii) if clauses (1) or (2) foregoing are not applicable, he is domiciled and spends a substantial part of his working time in the service of his employer in this or such other state.

77 P.S. § 411.2(d)(4). In addition, however, an employee, whose employment is not principally localized in this or another state, may enter into a written agreement designating where his employment is principally localized when he is required to travel regularly in this and one or more other states. 77 P.S. § 411.2(d)(5).

In this case, Claimant’s employment required him to travel regularly to various states bordering, and including, Pennsylvania. Claimant entered into an agreement with his Employer under which he agreed to be bound by the workers’ compensation laws of the State of West Virginia if he sustained a work-related injury in any state in which he traveled. The written agreement executed by Mcllvaine Trucking, Inc., and Claimant is specifically contemplated by, and enforceable, under § 305(d)(5) of the Act.

*677Claimant was hired by Mcllvaine Trucking at its principal office in Wooster, Ohio and began working as a truck driver in October of 1991. WCJ’s Findings of Fact Nos. 6 and 8, subsec. 1. When he was hired, Claimant entered into a written agreement that any work-related injury that he suffered would be covered by the workers’ compensation law of the State of West Virginia. WCJ’s Findings of Fact No. 8, subsec. 3. Claimant worked from a terminal in Pennsylvania, but his work was not principally localized in Pennsylvania or any other state. Claimant drove to various states bordering Pennsylvania and, on occasion, drove beyond the Mississippi River. Id.

On June 25, 1992, Claimant sustained a lower back injury while at the terminal in Pennsylvania. Mcllvaine Trucking accepted the injury as covered under West Virginia workers’ compensation law. Claimant received disability and medical benefits under the West Virginia law.

On May 24, 1995, Claimant filed a claim petition seeking benefits under Pennsylvania’s Workers’ Compensation Act. He alleged that he had become fully disabled on June 25, 1992. Mcllvaine Trucking admitted that Claimant had been injured, but challenged the length of the resulting disability. Mcllvaine Trucking also sought to enforce the written agreement that any work-related injury would be covered under West Virginia law. On September 18,1995, Claimant filed a penalty petition arising out of the refusal to accept his injury as covered by Pennsylvania’s act.

The WCJ refused to enforce Claimant’s written agreement to be bound by the workers’ compensation laws of the State of West Virginia. The WCJ determined that Claimant’s injury was covered by Pennsylvania’s Workers’ Compensation Act because the injury occurred within Pennsylvania and that Section 305.2 of the Act did not apply to such injury. Total disability benefits were awarded for the periods from June 25, 1992 through June 29, 1992, and from June 22, 1994 through November 13, 1995. Mcllvaine Trucking was given credit for benefits that had been previously paid to Claimant under the workers’ compensation law of West Virginia.

*678The Workers’ Compensation Appeal Board affirmed the WCJ’s decision. On appeal, the Commonwealth Court reversed. The court concluded that the written agreement signed by Claimant was to be given effect because the workers’ compensation claim had been submitted and accepted by the State of West Virginia in accordance with the provisions of § 305(d)(5).

The language of § 305(d)(5) evinces the Legislature’s intent to allow an employee and employer to confer jurisdiction of the workers’ compensation laws of a particular state when the employee regularly travels in more than one state. The Legislature provided for two protections in allowing the designation to be made: first, the agreement designating the state in which the employee’s employment is principally localized must be in writing; and second, the agreement is to be given effect under the Act unless the designated state refuses jurisdiction. Notably, § 305(d)(5) provides that such an agreement “shall be given effect under this act ” when those conditions are satisfied. Section 305(d)(5) is not limited by its terms to injuries occurring extraterritorially, under only that specific provision of the act. To the contrary, the language of § 305(d)(5) clearly requires the agreement to be given effect under the entire act. This extends to those injuries that are sustained within Pennsylvania.

To hold otherwise defeats the Legislature’s intent. Section 302(d)(5) was designed to eliminate the uncertainty as to which state’s workers’ compensation law would apply when an employee’s regular travel within different states would give rise to the possibility that jurisdiction would lie in any of those states. In authorizing the employee to enter into a written agreement, the Legislature created a mechanism whereby an employer could determine where it would be responsible for maintaining workers’ compensation insurance. The written agreement would eliminate the uncertainty facing an employer whose employees travel in several states.

In their brief, the American Trucking Association and the Pennsylvania Motor Truck Association addressed the myriad *679of additional problems that are engendered by the majority’s decision:

Employers subject to many, different state workers’ compensation schemes face significant problems. When a claim can potentially be filed in any state in the country, a motor carrier employer must become expert on up to 50 state workers’ compensation systems, and establish an infrastructure of health care providers and legal counsel in every state. This cumulative burden results in significantly increased administrative expenses to manage claims in many different states, loss of economies of scale that could result from dealing in only one or a limited number of forums, and difficulties in assembling a cadre of health care personnel to provide the medical care and rehabilitative services associated with workers’ compensation programs. Motor carriers must also waste resources on developing a network of legal counsel in multiple states to fight jurisdictional issues that need not arise. Finally, the unpredictability of where a claim may be heard increases the carrier’s workers’ compensation insurance premiums or cost of self insurance.

Brief of Amici Curiae, American Trucking Association, Inc. and Pennsylvania Motor Truck Association at 5-6.

The majority’s decision requires employers to obtain workers’ compensation coverage in each and every state in which their employees travel. This unnecessary and expensive duplication of insurance coverage is the precise problem that the Legislature believed had been addressed and resolved by the adoption of Section 302(d)(5). The majority resurrects the problem today. For these reasons, I dissent.

Justice CASTILLE joins this dissenting opinion.

. The Workers' Compensation Act "shall apply to all injuries occurring within this Commonwealth, irrespective of the place where the contract of hiring was made, renewed, or extended, and extraterritorially as provided by section 305.2." 77 P.S. § 1.