For companies that employ traveling employees, such as truck drivers, dealing with work injuries sustained by such employees can be challenging, because predicting which state will have jurisdiction over the employee's injury is not always easy.  In a recent decision, Watt v. WCAB (Boyd Bros. Transp.), the Commonwealth Court provided some guidance on this jurisdictional question, as least as applied to Pennsylvania law.  As is often the case, the injured driver in Watt sought worker's compensation benefits in Pennsylvania, which offered  more generous coverage than other potential benefits from New Jersey or Alabama.   In Watt, the Court held that Pennsylvania did not have jurisdiction over a workers' compensation claim made by a Pennsylvania resident, who was injured in New Jersey while working for an Alabama trucking company.  In so holding, the Court examined and applied the extra-territorial jurisdiction provisions of the Pennsylvania Workers' Compensation Act.

In Watt, the claimant, a Pennsylvania resident, applied to work as an interstate truck driver for Boyd Brothers Transportation by responding to an online advertisement.  After a successful telephone interview, the claimant attended a mandatory training course in Ohio.  Thereafter, the claimant and his new employer entered into a "workers' compensation agreement" that provided as follows:

• that the employee would be subject to Alabama workers' compensation law and  Alabama law would govern any workers' compensation claims brought by the employee;
• that the employer administered all workers' compensation claims from Alabama;
• that the employee's state of hire was Alabama; and
• that the employee's employment would principally be localized within Alabama. 

Shortly after beginning his employment, the claimant was injured in New Jersey.

Per the agreement, the company provided workers' compensation benefits to the employee under the Alabama Workers' Compensation Act.  However, claimant filed a claim for benefits in his home state of Pennsylvania.  Pennsylvania workers' compensation benefits are generally available, where (a) an injury occurs in Pennsylvania; (b) where employment is "principally localized" in Pennsylvania; (c) where a contract of hire is made in Pennsylvania for employment that is not principally localized in any state; or (d) where the contract of hire is made in Pennsylvania for employment principally located in another state whose workers' compensation law is not applicable to the employer for some reason. An important exception exists where the employment is regularly in at least one other state and there is an agreement that such other state's laws shall apply.  Such agreements are enforceable, unless the other state refuses jurisdiction.  An "exception to the exception" exists in the above scenario, however, when the injury occurs in Pennsylvania.  In that circumstance, the written agreement conferring jurisdiction on another state is unenforceable.

In denying his claim for benefits in Pennsylvania, the PA Workers' Compensation Judge found that claimant's employment was not "principally localized" in Pennsylvania and that the workers' compensation agreement between claimant and the employer was enforceable.  The PA Workers' Compensation Appeal Board affirmed.  On appeal to the Commonwealth Court, the claimant argued that his employment was principally located in Pennsylvania, as he logged more miles in the Commonwealth of Pennsylvania than in any other state.  He also argued that the workers' compensation agreement was void and contrary to public policy and should not have been relied upon when determining where his employment was principally localized.

The Commonwealth Court rejected these arguments and affirmed the WCJ and WCAB decisions.  As to claimant's first argument, the Court found that while he was domiciled in Pennsylvania, that was not enough to find that his employment was principally located in Pennsylvania.  Indeed, driving logs demonstrated that claimant spent only 19 percent of his driving time in Pennsylvania.  The Court held that although he "may have spent more time and driven more miles in Pennsylvania than any other one state, he did not spend a substantial part of his working time in Pennsylvania" as required for PA jurisdiction under Section 305.2(d)(4) of the Act.  Accordingly, claimant's employment was not principally located in any one state.

Turning to claimant's second argument, the Commonwealth Court held that the workers' compensation agreement between claimant and the employer did not violate public policy and that the same was valid.  The Court pointed to Section 305.2(d)(5) of the Act, which states:

"An employee whose duties require him to travel regularly in the service of his employer in this and one or more other states 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."

In consideration of the above, the Court reasoned that because claimant's employment was not principally localized in Pennsylvania, because he was injured in New Jersey, and because Alabama did not refuse jurisdiction over his claim, the workers' compensation agreement controlled and did not violate public policy and served as a legitimate factor in determining jurisdiction.

So, what does the Watt case mean for Pennsylvania employers?  It serves as a reminder of the extra-territorial jurisdiction provisions of the PA Workers' Compensation Act and provides insight into how a PA employer might structure an agreement with a traveling employee to either avoid or ensure that jurisdiction over work injuries lies in Pennsylvania.  Because Pennsylvania is so much more costly in terms of workers' compensation benefit payments, employers might also utilize the "extraterritorial provisions" of the Act to structure driving jobs, as did the employer in Watt, to make sure  choice of law agreements will be enforced by Pennsylvania Courts, should a challenge arise.  Keep in mind, however, that even an otherwise enforceable agreement will be of little use, in a case where the injury actually occurs in Pennsylvania.