5 Investigative Tips for Determining Jurisdiction of Out-of-State Injuries

Workers’ Compensation Defense Digest | July 2023

Accidents that happen outside of Virginia are known as “foreign injuries” under Virginia Code § 65.2-508. That code section provides the framework for determining whether the accident falls under the jurisdiction of the Virginia Workers’ Compensation Act.

When an accident takes place outside of Virginia, the claimant can recover under the Act if both:

(1) The claimant’s contract of employment was made in Virginia; and
(2) The employer has a place of business in Virginia; provided the contract of employment was not expressly for services outside Virginia.

It is the claimant’s burden to establish these elements.

Contract of Employment

The contract of employment may be in writing or may be a verbal agreement. The place where the last act necessary to give validity to a contract occurs is the place where the contract is made.

Determining where the last act necessary to complete the contract is made can be tough, but the case law provides useful examples:

In Pro-Football Inc. v. Paul, 39 Va. App. 1, 569 S.E.2d 66 (Sept. 3, 2002), a professional football player was traded from the Denver Broncos to the Washington Commanders. As a term of the employment contract, it was required that the claimant present to the team’s facilities in Virginia, complete the team’s physical, and be on the team’s roster. All of those acts took place in Virginia.

>> Given this, the Court of Appeals agreed with the Commission that there was jurisdiction in Virginia.

In Slafer v. Landmark Wiring Sys., Inc ., VWC File No. 225-74-28 (Feb. 14, 2007), a representative from the employer traveled to the claimant’s home in Florida to discuss a job opportunity. The employer representative offered the claimant the job in Florida and the claimant indicated he needed to discuss it with his wife, but tentatively accepted the position. After discussing with this wife, the claimant called from his home in Florida to accept the job. The claimant was injured in Florida while working for the employer.

>> The Commission found there was no jurisdiction in Virginia, as the last act necessary to complete the contract was made in Florida, when the claimant called to accept the job.

Place of Business

An “employer’s place of business” is not defined in the Act. However, case law has interpreted it to mean that the employer must do more than simply conduct business in the Commonwealth, it must maintain a place of business in Virginia.

In Sagar v. Tower Legal Staffing, Inc., JCN VA00001575543 (Mar. 20, 2023), the employer had a registered agent in Virginia, was authorized by the Virginia State Corporation Commission to conduct business in Virginia, and had a rented storage facility in Virginia. However, all bookkeeping and administrative tasks were performed out of the New York office, and the company did not hold itself out to have a place of business in Virginia.

>> The Commission found this insufficient to meet the “place of business” prong of Va. Code § 65.2-508 because there were not enough contacts with Virginia.

In CLC Constr. v. Lopez, 20 Va. App. 258 (Apr. 25, 1995), the employer rented a construction yard in Virginia where it stored its equipment and where employees met daily to go to job assignments. The employer performed many projects in Virginia. The employer also performed its bookkeeping functions, including taxes and payroll in Virginia.

>> In determining that the employer had a place of business in Virginia the Court of Appeals stated that the employer did not just conduct business in Virginia but that it “actually maintained a place of business” in Virginia.

5 Investigative Tips & Reminders

1. If the accident happened in Virginia, there is jurisdiction in Virginia. Make sure to confirm the address where the accident took place.

2. The state or country where the claimant lives is NOT a factor that is used to determine whether there is jurisdiction in Virginia. Jurisdiction over workers’ compensation claims in Virginia is governed by statute, not by agreement between the parties.

>> For example, if an employment contract says that all workers’ compensation proceedings will be governed by the laws of North Carolina, Virginia will still have jurisdiction if all the provisions of Va. Code § 65.2-508 are met or if the accident occurred in Virginia.

3. Multiple states can have jurisdiction over one accident. The claimant decides where to pursue their claim. A claimant can file claims in multiple states; however, most states do not permit a double recovery. In Virginia, the employer and carrier will receive a credit for benefits paid in another state.

4. Whether an employment contract was made in Virginia is determined by the last act necessary to complete the contract. This can get complicated.

>> For example, if the accident happened outside of Virginia, claimant was in Maryland when she accepted the employment offer via telephone, and that was the last act necessary to make the contract valid, then there is no jurisdiction in Virginia.

However, some contracts indicate that for the contract to be valid other conditions must be met.

>> For example, some contracts say the employee must complete training in Virginia before the contract becomes effective.

If the contract of employment was in writing, ask the employer to provide a copy. If the contract of employment was verbal, ask the employer about the hiring process and what the last thing is that a candidate must do before they are considered an employee. Then ask where that act occurred.

Scenario (a): Employer calls the claimant by phone and offers work to the claimant, providing details of the job and the pay. The claimant tells the employer during the call that he accepts. There is no paperwork filled out and everyone considers the agreement made. The last act is the claimant’s verbal acceptance of the job and jurisdiction will be determined by where the claimant was at the time he accepted the job over the phone.

>> If he was located in Virginia at the time of the call, it will be Virginia. If he was in Maryland at the time of the call, it will be Maryland.

Scenario (b): Employer calls the claimant by phone and offers work to the claimant, providing details of the job and the pay. The claimant tells the employer during the call that he accepts. The claimant is in Maryland at the time of the call. The employer says he must complete training in Virginia before the claimant can begin work. The claimant completes the training.

>> The last act is completing the training in Virginia and jurisdiction will be in Virginia.

Scenario (c): Employer calls the claimant by phone and offers work to the claimant, providing details of the job and the pay. The claimant tells the employer during the call that he accepts. The claimant is in Maryland at the time of the call. The employer says that to complete the process, the claimant needs to complete application and tax paperwork and deliver or send it to their office in Manassas, VA. This scenario can create a very fact-specific situation – you will want to ask both the claimant and the employer:

• • Was the paperwork was ever completed?
  • Was the job offer was conditioned upon the paperwork being completed, or if the paperwork was a post-hire task?
  • Did the claimant began working before the paperwork was submitted? [To determine whether the phone call or the paperwork would be considered the last act of the employment contract under the facts of the case.]
    

5. When determining whether an employer has a place of business in Virginia, review the following factors:

• The number of employees in Virginia at the time of the accident
• The number of jobsites or contracts in Virginia on the date of injury
• Whether the claimant’s supervisors are in Virginia
• Whether the employer leased or owned property in Virginia
• Whether the employer conducts its bookkeeping in Virginia
• Whether the employer performs other administrative functions in Virginia

*If you have not received the 2022 editions of the Virginia Workers’ Compensation Adjuster’s Handbook and Noteworthy Cases, please request free copies via email.

Workers’ Compensation Practice Group at McCandlish Holton defends workers’ compensation claims in all areas of Virginia from initial investigation to the trial and appellate levels of litigation. 

Our experienced team provides innovative legal strategies tailored to the needs of your claims.  We carefully balance aggressive advocacy with skilled diplomacy to successfully resolve claims. Contact Us.