Employees injured while driving to or from work ordinarily are not covered by workers compensation because such accidents are considered not to have occurred in the course and scope of employment. This “coming and going” rule of no coverage remains as the general rule; yet under a new Court of Appeals holding – declared in Smith v Chrysler Group, LLC, __ Mich App __ (No. 339705, February 25, 2020), and applied in Adams v Amcomm Telecommunications Inc, unpublished Court of Appeals opinion (No. 346502, April 9, 2020) – the circumstances allowing for an exception to the general rule have become significantly more expansive.
One of the policy decisions built into the No-Fault Automobile Insurance Act from its inception, as a means of reducing the cost of the mandatory coverage, is the concept that personal protection insurance (“PIP”) benefits would be secondary to other benefits that are “provided or required to be provided under the laws of any state or the federal government[.]” MCL 500.3109(1). Workers’ compensation, of course, constitutes a source of benefits “required to be provided” under Michigan law. Accordingly, when a person sustains injuries in a motor vehicle accident “arising out of and in the course of [the person’s] employment,” MCL 418.301(1), the no-fault insurer’s obligation to pay PIP benefits is subordinated to whatever benefits the person is entitled to claim under the Workers Disability Compensation Act (“WDCA”), to the extent that the benefits overlap.
But since PIP insurers are incentivized by statutory penalties to issue prompt payment of benefits after processing an accident claim, information that the injuries might have been work-related or that the employer might improperly be denying a workers compensation claim often will not emerge until a substantial amount of PIP benefits already have been paid. In such instances, the PIP insurer is permitted to initiate an action in the workers compensation agency, or intervene in such an action already initiated by the injured person, to pursue reimbursement from the employer’s workers compensation carrier. Russell v Welcor, Inc, 157 Mich App 351 (1987). Most often, the dispute centers on whether the motor vehicle accident occurred in the course and scope of the person’s employment.
In Smith v Chrysler Group, LLC, the plaintiff was an auditor employed by the defendant. Although he normally worked out of the Chrysler Technology Center in Auburn Hills, he was injured in a motor vehicle accident while driving from his home in Clarkston to one of the company’s assembly plants in Detroit, where he would be conducting an audit. When his employer denied workers compensation benefits on grounds that he was injured not while working but while driving on his way to work, Smith filed an application for hearing. Citizens Insurance Company, having paid benefits as Smith’s no-fault insurer, participated in the action as intervening plaintiff.
In light of the “general rule” that injuries sustained while traveling to and from work are not compensable, [1] the case would turn on whether Smith’s circumstances would invoke any of the recognized “exceptions” to the rule. One frequently cited case, Stark v L E Myers Co, 58 Mich App 439 (1975), specifically listed four factors “relevant to the ultimate determination of whether an injury to an employee while on the way to work is sufficiently employment-related to be compensable”: (1) Whether the employer paid for or furnished the employee’s transportation; (2) whether the injury occurred during or between working hours; (3) whether the employer derived a special benefit from the employee’s activities at the time of the injury; and (4) whether the employment subjected the employee to excessive exposure to traffic risks.
Based on the evidence in Smith, the hearing magistrate found that Smith satisfied the first factor since he was, in fact, reimbursed by the employer for his mileage while driving to the Detroit assembly plant that day. Having found that none of the other three factors were met, however, the magistrate concluded that the accident did not arise out of and in the course of employment. The Michigan Compensation Appellate Commission (“MCAC”) affirmed, relying on a later case, Forgach v George Koch & Sons Co, 167 Mich App 50 (1988), to confirm that no one factor in and of itself is dispositive but, rather, all four must be considered in a “balancing test” toward the overall determination of whether a sufficient “nexus” existed between the employment and the injury to render the injury a circumstance of the employment.
Subsequent cases, even some issued by the Supreme Court, identify additional “factors” to consider as exceptions to the general rule of no coverage (e.g., where the employee is on a “special mission” for the employer, or where the travel comprises a “dual purpose” combining employment-related business with the personal activity of the employee), yet most courts – and the MCAC in particular, as it did in Smith – consistently regard the several identified exceptions as mere “factors” to be considered and weighed together as elements of a balancing test. The Court of Appeals has now put an end to this approach.
On Smith’s appeal from the MCAC, the Court of Appeals overruled Forgach along with the entire “balancing test” approach in these “coming and going” cases. In a published and thus binding opinion, the Smith Court announced its interpretation of the relevant case law as establishing “exceptions” to the general rule, not mere “factors” to be considered, and held “that each of those exceptions is independent of the others.” Accordingly, based on a finding that Smith was, indeed, on a “special mission” for his employer when traveling down to the Detroit assembly plant to conduct an audit, and based on the separate finding that Smith was reimbursed for his travel mileage – either one of which, by itself, would be sufficient – the Court held that plaintiff was entitled to compensation. And Citizens, therefore, was able to recover reimbursement for the overlapping PIP benefits it had paid for Smith’s injuries.
The Court of Appeals very recently found the opportunity to apply this new approach for “coming and going” cases. In Adams v Amcomm Telecommunications Inc, Selective Way Insurance Company had paid PIP benefits for injuries its insured sustained while driving an employer-provided van from his home on his way to the employer’s warehouse. His intent was to have the materials and supplies in the van reconciled at the warehouse then proceed to a job site to perform cable installation work. His claim for benefits was denied by the trial magistrate, and the MCAC affirmed, holding that while the employee had been provided a company van to drive to and from the warehouse and customer locations, when considered all together, the “four Forgach” factors weighed in favor of the employer and a finding of no coverage. The intervening no-fault insurer appealed, however, and the Court of Appeals reversed, relying on Smith: “[T]he exceptions to the travel to and from work rule are exceptions, not factors. Adams met the exception to the coming and going rule concerning employer-provided transportation. The MCAC erred by determining that Adams was not acting in the scope of employment when he met one of the exceptions of the coming and going rule.” With any one of the exceptions deemed satisfied, the Court noted, there was no need to analyze any of the other factors and analyze whether they weighed in the employee’s favor.
This change in the framework for analyzing potentially work-related motor vehicle accident cases constitutes a dramatic change that should significantly broaden workers compensation coverage of injuries concurrently covered by PIP. No-fault insurers should pay close attention to injury claims arising not only from motor vehicle accidents occurring in the course of the work day, but to those occurring during the insured’s travel to and from work, as well. Inquiry should be made as early as possible whether a workers compensation claim has been made and whether the carrier is accepting the claim. And if there is any doubt, a coverage analysis should be conducted to determine whether any exception to the general rule of no-coverage applies.
[1] By statute, an employee injured while going to or coming from work while on the employer’s premises where the work is to be performed, at or near the time of his or her working hours, “is presumed to be in the course of his or her employment.” MCL 418.301(3). Otherwise, however, “[i]njuries sustained by an employee while going to or coming from work generally are not compensable under the WDCA.” Bowman v RL Coolsaet Constr Co, 275 Mich App 188, 190 (2007).
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Sarah Nadeau, Editor of The Garan Report Publication, is a Shareholder in our Detroit Office. Sarah can be reached at 313.446.1530 or snadeau@garanlucow.com