Wednesday, July 23, 2014

Pennsylvania "Extra-Territorial" Jurisdiction - Where is the Employment "Principally Localized"?

Interpretation of the Pennsylvania Workers' Compensation "Extra-Territorial" provisions for the possible extension of Jurisdiction and Coverage.

 The Pennsylvania Workers Compensation Act applies to all injuries occurring within the Commonwealth. Section 101, 77 P.S. 1.

Application of the PA Workers' Compensation Act is extended by the "Extra-Territorial" provisions at Section 305.2, 77 P.S. 411.2.

(a) If an employee, while working outside the territorial limits of this state, suffers an injury ... (for which he would have received benefits if the injury occurred with the state)... he shall be entitled to 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

(3)   he is working under a contract of hire made in this state, in employment localized in another state, whose workmen's compensation law is not applicable to his employer...

(4)   A person's employment is principally localized in this or another state when,

(i)   his employer has a regular 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) and (2) 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.

What does this mean in a real world application?

Greenawalt v. WCAB (Bristol Environmental, Inc.), No. 1894 C.D. 2013, a published opinion of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Simpson on May 12, 2014, offered a recent review of the application of these "extra-territorial' provisions.

Factual Background

Employee was a union laborer, receiving limited duration work assignments, with different employers, followed by layoff. He accepted an assignment with Bristol in New York. Bristol obtained lodging in an apartment complex for employees. He would return home to PA on weekends.

One morning, Employee slipped and fell on ice outside the apartment, as he walked to warm his automobile before leaving for the job site. He proceeded to the job site. He notified his foreman. Due to his symptoms, he was instructed to perform light duty work. He continued in light duty for several weeks, until his layoff.

Employee filed a Claim Petition alleging disability from this back injury.
Bristol denied the claim, asserting (1) PA lacked jurisdiction as the injury occurred in New York and (2) the injury did not occur in the course and scope of his employment

WCJ Decision 

Claim Petition  DENIED.
Employee worked under a contract of hire, made in Pennsylvania, for employment principally localized in New York. Although Employee worked in the past, for Bristol in New York, he did not have a continuous employment relationship, for purposes of determining where his employment was principally localized.

Employee Commonwealth Court Arguments

Employee argued his employment was principally localized in Pennsylvania, and jurisdiction was proper under 305.2 (a) (1).
Employee was hired in PA
He was trained in PA.
He completed over 30 assignments for Bristol in PA.
His New York job was expected to last less than one year (and it did).

Employee also argued in the alternative,
He as hired in PA.
His employment was not localized in any state.
Jurisdiction was proper under 305.2(a)(2).

Employee also argued in the alternative,
The WCJ did not determine if New York law would apply.
A remand was necessary to determine in there was jurisdiction pursuant to 305.2(a)(3).

Commonwealth Court Decision 

Claim Petition Denial was AFFIRMED.

Commonwealth Court Reasoning

The claimant has the burden of proof to establish jurisdiction in Pennsylvania for his workers compensation claim.slip opinion page 7 citing Williams v. WCAB (POHL Transp.) 4 A.3d 742 (Pa. Cmwlth. 2010).

Here, the review of the record and the WCJ findings support a conclusion that this Employee's employment was principally localized in New York, not in Pennsylvania.

Employee worked exclusively in Rochester, New York for Bristol after one week of training in Pennsylvania. He worked at that location, "as a rule and not as an exception". (citing Williams 4 A.3d at 746.

There was no continuous employment relationship with Bristol, as Employee worked with Global Insulation and LVI Environmental during that same year. In light of this break of employment with Bristol, for several months, the WCJ correctly determined there was no continuous employment relationship.

The "continuous employment relationship" argument is an important element in determining if a series of individual per-job assignments should be considered one continuous employment for the purpose of determining where the employment is principally localized. Here the evidence did not support Employee's argument.

Similarly, Employee's argument that his employment was not principally localized in any state, was properly rejected, as the evidence showed his employment was principally localized in New York.

Employee argued that subsections (i) to (iii) of 305.2 (d) (4) were not met to support the conclusion that his employment was principally localized in New York. However, the record reflects that Employer operated its business at the Rochester, New York location. Employee regularly worked 40 hours from that location.
Subsection (iii) requires Employee to be domiciled in New York and he testified he remained domiciled in Pennsylvania.

The Commonwealth Court rejected Employee's argument that the case should be remanded for a finding as to the applicability of New York workers compensation laws to this Employer.
Employee had the burden of proof to establish jurisdiction over his claim. As he admittedly presented no proof on this point, the WCJ did not err in failing to make a finding on this point.


1.   Reading this decision should alert the Employer and Workers Compensation claims professionals as to the complexity of these extra-territorial provisions.

One must carefully assemble evidence in support of each element of the "principally located" argument. Testimony and documentation will be necessary to establish Employer's position and rebut Employee's contentions.

Involve your workers' compensation defense counsel at an early stage of the claim investigation.

2.   As the issue of "jurisdiction" is significant in determining the success of the Employee claim and the existence or extent of liability for the Employer. It behooves the parties to thoroughly investigate and document these facts. At the inception of the claim, one should devote the "extra time" to  this issue.

3.   Often, jurisdiction is not disputed. However, when it is an "out-of-state" injury claim, the topic of jurisdiction becomes an essential element of the claim investigation and preparation.

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