United States: Recruiting Workers In Colorado To Work In Another State? Watch Out! The Workers' Compensation Act Of Colorado Applies When You Least Expect It Due To The Extraterritorial Provision

Last Updated: March 2 2016
Article by Melissa J. Lyon

The Colorado Court of Appeals issued its decision in Youngquist Bros. Oil & Gas, Inc. v. Indus. Claim Appeals Office of the State of Colorado and Travis Miner, 2016 COA 31, last week. This decision is important for companies recruiting workers in Colorado to work in another state – the Workers' Compensation Act of Colorado may apply when you least expect it. The full text of the decision can be found here.

The facts of the case are simple. Youngquist Brothers Oil & Gas, Inc. ("Youngquist"), an oil and gas company with operations in North Dakota, hired its workforce primarily from Texas, Oklahoma, Indiana and Colorado. Youngquist Bros. Oil & Gas, Inc. v. Indus. Claim Appeals Office of the State of Colorado and Travis Miner, 2016 COA 31, ¶ 3. Travis Miner ("Miner") was one such Colorado-recruited employee.

Youngquist maintained workers' compensation insurance in North Dakota, but not in Colorado. Id.

While living in Grand Junction, Colorado, Miner submitted his online application for a position with Youngquist. Id. at ¶ 4. At the conclusion of a phone interview with a Youngquist representative, Miner was offered a job, which he accepted. Id. Youngquist flew Miner to North Dakota the following day and arranged and paid for the flight; once there, a Youngquist representative met Miner at the airport and transported him to Youngquist's offices and after completing paperwork and passing a preliminary drug screen, Miner began his first evening rig shift. Id. at ¶¶ 4-5, 19.

On his second evening shift, Miner slipped and fell down the rig's stairs, injuring his back. Id. at ¶ 6. Miner did not immediately report the injury to his supervisor; instead, he worked three more shifts before reporting that he was hurt. Id.

Youngquist agreed to allow Miner to seek medical treatment in Colorado. Id. at ¶ 7. His treating physician concluded that although Miner had a pre-existing back injury, the condition was worsened by his work-related fall. Id.

North Dakota Workforce Safety and Insurance denied Miner's workers' compensation claim without a hearing, apparently due to his pre-existing back condition. Id. at ¶ 8.

Miner then filed a claim for workers' compensation benefits in Colorado and after a hearing, it was determined that Miner was hired in Colorado and his claim was therefore subject to the Workers' Compensation Act of Colorado. Id. at ¶ 9. Miner was found to have suffered a compensable work-related injury and he was awarded benefits. Id.  Further, Youngquist was subject to the statutory 50% penalty for failing to carry workers' compensation insurance in Colorado. Id.

The Colorado Court of Appeals affirmed the decision, relying on the text of the extraterritorial provision found in C.R.S. § 8-41-204. The court explained that the extraterritorial provision gives Colorado "jurisdiction to award benefits for out-of-state work-related injuries if an employee was (1) hired or regularly employed in Colorado and (2) injured within six months of leaving Colorado." Id. at ¶ 11 citing C.R.S. § 8-41-204; see also Hathaway Lighting, Inc. v. Indus. Claim Appeals Office, 143 P.3d 1187, 1189 (Colo. App. 2006).

If an employer hires an employee in Colorado and the employee is injured within six months, that is enough to make that employer subject to the requirements of the Workers' Compensation Act of Colorado.

Further, the Colorado Court of Appeals disagreed with Youngquist's argument that it did not have the sufficient minimum contacts with the state to establish personal jurisdiction in Colorado. Id. at ¶ 24. The court applied the jurisdictional analysis from Alaska Packers Ass'n v. Indus. Accident Comm'n, 294 U.S. 532, 542-43 (1935) in making its decision.

In Alaska Packers, a California person was hired in California to work in Alaska during salmon canning season and he was injured in Alaska before returning to California to file a workers' compensation claim. Id. at ¶ 26 (Internal citations omitted). The Supreme Court upheld California's extraterritorial provision and the analysis hinged on where the employment relationship was entered into and the state's legitimate interest in the protection of its residents. Id. at ¶¶ 27, 30 (Internal citations omitted). The Court of Appeals in Youngquist agreed that both of these factors supported Colorado's jurisdiction because Miner was hired in Colorado. Id. at ¶ 31.

Moreover, Youngquist was subject to the mandatory 50% penalty on employers subject to the Workers' Compensation Act of Colorado for failing to carry workers' compensation insurance. Id. at ¶ 36.

The takeaway is this: "If an employer hires a Colorado employee in this state and the employee is injured within six months of leaving Colorado, the employer is subject to the [Workers' Compensation] Act [of Colorado]." Id. at ¶ 15.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Melissa J. Lyon
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