Employers Beware: A Job Applicant (Never Hired) was Awarded Workers’ Compensation Benefits

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A significant case has come down from the Mississippi Court of Appeals. Averitt Express Inc. v. Kevin Collins gives some insight into the perils of having a job applicant perform physical activity, suffer an injury and possibly make a workers’ compensation claim. The reason the case is important is because while lowering medical costs through a UR program is critically important, avoiding workers’ comp claims to begin with is just as important.

The facts of the case involve a truck driver named Kevin Collins. Mr. Collins applied for, and was granted, an interview with Averitt Express Inc. Averitt Express is a significant player in the freight transportation and supply chain business. The company has over 4,100 tractors and 12,000 trailers that operate from 80 terminals throughout the United States and Mexico.

After the interview, Collins received a letter telling him he got the job provided he passed a physical, drug screening and road test. On Sunday, Nov. 4, 2012, Collins took the road test administered by manager Danny Smith. If all went well on the road test Collins would report for orientation the next day (Monday).

Part of the road test called for Mr. Collins to enter and exit the rear of the trailer. This is a common test because manipulating cargo and operating the trailer lift gate are tasks the drivers must do. While entering the back of the trailer Collins injured his knee. The next day, Monday, he was informed he did not pass the road test. Later, he was diagnosed with torn meniscus. Initially he sought treatment on his own but later made a formal workers’ compensation claim to Averitt Express.

Averitt Express denied the workers’ compensation claim based on the fact that Mr. Collins was never an employee. In other words, he was never hired and was never a worker. So why should Averitt pay for workers’ comp benefits? In a hearing before an administrative law judge (ALJ), the ALJ ruled that Collins was an employee pursuant to Section 71-3-3(d) of the Mississippi Code.

That section of the Code defines an employee as any person in the service of an employer, expressed or implied, where the employer has the right of control. The ALJ stated that Collins was acting in service to Averitt because he was demonstrating to them whether or not he was qualified for the job. Also, because Averitt controlled the testing environment, including precisely how Collins was to perform each task, the ALJ ruled that he was an employee in accordance with the statute when he was injured.

In light of this Mississippi case, the next question for a business may be “What can we do to avoid a workers’ comp claim from a job applicant?” To answer this question it is helpful to review three established cases from California.

Laeng v. WCAB (1972) 37 Cal. Comp.185
In this case an individual named Laeng saw a newspaper advertisement for a job as a refuse crew worker with the city of Covina. As part of the hiring process he was required to perform a physical agility test. During the agility test Laeng ran an obstacle course and fractured his foot. He later brought a workers’ comp claim. The city of Covina argued that there was no coverage because Laeng was never hired and therefore not an employee. The WCAB said that when a tryout involves an operation that would be ordinarily viewed as hazardous “a special employment exists.” The WCAB ruled Laeng had a valid workers’ comp claim.

Barragan v. WCAB (1987) 52 Cal.Comp. 467
In this case a student was participating in an internship for a local hospital. While demonstrating exercises to a patient to perform as a part of the patient’s physical therapy, she injured herself. She later filed a workers’ compensation claim. The hospital argued that she was not an employee because they were not paying her. In other words, consideration was lacking. The WCAB disagreed. They stated that in this instance she received instruction from the hospital staff to train her as a physical therapist. Receiving instruction was consideration for the intern’s services, which were billed to patients. Because there was consideration, she had a valid workers’ comp claim. Also, the WCAB noted that the hospital had control over the student in a manner consistent with an employer/employee relationship.

Esters v. General Motors Corp. (1988) 53 Cal.Comp. 244
In this case GM directed a job applicant to obtain a physical exam including a chest X-ray. This examination was to be performed by a 3rd party not associated with GM, at the 3rd party’s location. While at the exam the job applicant was injured and later made a claim for workers’ comp benefits. The WCAB said that there was nothing in this case that parallels actual working conditions (as opposed to the Laeng case above). Plus, this did not involve the degree of control or exposure to special risk that would give rise to an employment relationship. In this case the WCAB sided with GM.

While states differ in how they deal with workers’ compensation for job applicants, the cases above demonstrate some touchstones. First, if you make a job applicant undergo physical activity that would ordinarily be viewed as hazardous or potentially hazardous, and they are injured, they will likely have a valid workers’ comp claim. Second, if you exercise control over a job applicant as if they were hired, and they are injured, then they will likely have a workers’ comp claim. Third, if your company is receiving a benefit (as with an unpaid intern providing services for which you bill your customers), and the intern is injured, the intern will probably have a valid workers’ comp claim. While each situation is unique, these are fact patterns businesses should be wary of if they are interested in avoiding workers’ comp claims by job applicants.

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Tom Swiatek

Tom Swiatek

As Assistant Vice President of Regulatory Services, General Counsel, and Editor in Chief of UR Nation, Tom Swiatek draws on his experience as an insurance attorney on both the general liability side, as well as on workers’ compensation matters. As a California Workers’ Compensation Section Member, Tom is leading the discussion with respect to the regulatory challenges and opportunities facing the workers’ compensation system.