A Quick Guide on How to Navigate Claims That Occur Outside of North Carolina

Whether the North Carolina Industrial Commission has jurisdiction to adjudicate a workers’ compensation claim can be critical to a claim’s defense. A scenario where this issue commonly arises is when an employee is injured outside of the state of North Carolina, yet chooses to file a North Carolina claim.

N.C. Gen. Stat. Section 97-36 is the statute governing the North Carolina Industrial Commission’s jurisdiction over claims arising from accidents occurring outside of the state. Of particular importance, the North Carolina Court of Appeals has held that Section 97-36 is the controlling jurisdictional statute in workers’ compensation cases even if a party has met the minimum due process requirements for jurisdiction under North Carolina civil procedure law.

N.C. Gen. Stat. Section 97-36 provides three circumstances when the North Carolina Industrial Commission has jurisdiction over claims arising from accidents occurring outside of the state:

  1. If the contract of employment was made within North Carolina
  2. If the employer’s principal place of business is in North Carolina
  3. The employee’s principal place of employment is in North Carolina

Under North Carolina law, an employee’s principal place of employment is the state “most important, consequential, or influential” to the employment. Courts typically focus their inquiry on where the employee performed the majority of his/her job duties. In cases where an employee did not perform the majority of his/her job duties in any one state, courts have looked to the states where the employee had the most significant contacts. By way of illustration, the North Carolina Court of Appeals has held the employee’s principal place of employment was North Carolina where, although there was no one state where the employee performed his/her job duties, he/she had the most substantial degree of contact with North Carolina.

To determine whether the contract of employment was made in North Carolina, courts use the “last act” test. The last act has been defined as the final act necessary to make the contract a binding obligation. Typically, the last act would be the employee’s acceptance of employment or the completion of conditions of employment.  For example, the North Carolina Court of Appeals held that the last act of employment was not in North Carolina, where the plaintiff’s employment was contingent upon complete of orientation, a road test, a drug test, and a physical exam. Rather, all of these actions took place in Mississippi.

Determining the employer’s principal place of business is relatively straightforward. An employer’s principal place of business is the primary location where its business is performed. This is often where the business is headquartered.

Clients should pay close attention to these factors if they have a plaintiff who was injured outside of North Carolina. If none of the above factors can be satisfied, the claim does not have jurisdiction in North Carolina and a motion to dismiss the claim from North Carolina should be successful.

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