Opinion ID: 1127365
Heading Depth: 2
Heading Rank: 3

Heading: Injury Arising Out of and In the Course of Employment

Text: The dispositive issue therefore is whether Wharton's disciplinary-induced stress injury, because of his misconduct, is compensable under HRS 386-3 (1993). [3] As a general rule in workers' compensation law, employee misconduct that involves deviation from the course of employment is material to the issue of compensability, although willful or negligent employee misconduct is generally irrelevant. Larson, 1A Workmen's Compensation Law (Larson), § 30.00 at 6-1 (1995). The test for determining whether an employee's activities are outside the course and scope of employment is stated by Professor Larson: When misconduct involves a prohibited overstepping of the boundaries defining the ultimate work to be done by the claimant, the prohibited act is outside the course of employment. But when misconduct involves a violation of regulations or prohibitions relating to method of accomplishing that ultimate work, the act remains within the course of employment. Violations of express prohibitions relating to incidental activities, such as seeking personal comfort, as distinguished from activities contributing directly to the accomplishment of the main job, are an interruption of the course of employment. 1A Larson, supra, § 31.00 at 6-10. In other words, we must determine whether Wharton's misconduct was outside or within the bounds of his employment duties. To put it in another way, [a] distinction must be made between [(1)] an unauthorized departure from the course of employment and [(2)] the performance of a duty in an unauthorized manner. Pacific Tel. & Tel. Co. v. Workers' Comp. Appeals Bd., 112 Cal.App.3d 241, 245, 169 Cal.Rptr. 285, 288 (1980). Wharton argues that his injury arose out of and in the course of his employment, i.e., his violation of the policy regarding time card proceduresthe unauthorized alteration of his time cardconstituted misconduct involving a violation of regulations or prohibitions relating to the method of accomplishing that ultimate work. The first question, therefore, is whether Wharton's misconduct was outside the boundaries defining the ultimate work. If we conclude that Wharton's misconduct was outside the course of his employment, the second question is whether the same misconduct/injury analysis applies to this case involving (1) misconduct outside the course of employment, (2) followed by a disciplinary action of suspension imposed by Employer, and (3) a stress injury sustained as a result of that suspension. Pacific Tel. & Tel. Co., supra, answers both questions.
In Pacific Tel. & Tel. Co., an advertising salesperson sustained psychiatric injury as a result of an accusation and investigation by his employer that he had forged customer signatures on advertising contracts and the stress from the subsequent termination of his employment. The court could not conceive of a realistic argument that [the employee] would be directly or indirectly serving his employer by the forging of contract signatures. Accordingly, [the court held that any] injury sustained during the actual furtherance of the criminal activity of forgery would not be compensable. Id. at 246, 169 Cal.Rptr. at 285. Moreover, in Pacific Tel. & Tel. Co. as in the present case, the wrongful actions of the employees were more than a violation of a regulation or prohibition relating to the method of accomplishing their work. In the present case, HECO's timekeeping policy specifically prohibited the alteration of time cards. Nevertheless, Wharton disregarded such policy and altered the time cards, charging his absences to industrial rather than sick leave. And of course, such misconduct has nothing to do with the work he was hired to do, i.e., maintaining and repairing electronic controls. Instead, he committed a prohibited act similar to the alleged forging of signatures in Pacific Tel. & Tel. Co., supra . We therefore hold that Wharton's misconduct fell outside the boundaries defining [his] ultimate work.
Two exceptions to the foregoing rule have been made. One is when the employer has previously accepted the benefit of the forbidden practice with knowledge that the prohibition has been violated. 1 Larson, supra, § 27.14, at 5-221. Here, there is no evidence that HECO has previously accepted the benefit, if any, of altering time cards from sick leave to industrial to invoke the exception. Moreover, the evidence simply does not show that HECO should have reasonably foreseen Wharton's disregard of the timekeeping procedure policy not to alter time cards. A second exception that allows compensation even though the claimant engaged in prohibited conduct is when a prohibition is so general in its terms that it is readily outweighed by the specific benefit to the employer [of the doing of the prohibited act]. 1 Larson, supra, § 27.14, at 5-222. Illustrative of this rule is Hayes v. Ambassador Court, Inc., 58 N.J.Super. 215, 156 A.2d 11 (1959). In Hayes, a building superintendent slipped and fell while washing windows for a tenant of a furnished flat. The court held that the employer's statement that the claimant was not supposed to do anything for tenants was a mere blanket interdiction insufficient to prove that the employee was forbidden from washing the windows, and therefore allowed the compensation. Id. at 219, 156 A.2d at 13. In the instant case, the prohibition was not a mere blanket interdiction. The prohibition was specificemployees were not to alter time cardsand should have been well understood by all employees. Moreover, Wharton's conduct did not further HECO's business. Indeed, the opposite is true because Wharton for his own benefit attempted to change his absences from sick leave to industrial. Accordingly, we hold that neither of the exceptions applies.
Noting that the claimed injury was not sustained directly during the course of the alleged criminal activity but sustained as a consequence of that accusation, investigation, and termination of [the employee], the court in Pacific Tel. & Tel. Co. further held that if the employee in fact engaged in the criminal act of forgery, his injury [as a consequence of the employer's accusation, investigation, and discharge of him] cannot be held compensable under the Workers' Compensation Act, [because] his injury would not be a consequence of his employment but incidental to his criminal conduct. 112 Cal.App.3rd at 246-47, 169 Cal.Rptr. at 285. The hearing testimony of HECO's supervisors, Thomas Paresa and Alden Ishii, provides reliable, probative and substantial evidence to support the Board's finding in this case that Wharton's conductalteration of time cardswas unauthorized and a prohibited act. Likewise, because we deem Pacific Tel. & Tel. Co., supra, persuasive, we hold that Wharton's disciplinary-induced stress injury did not arise out of and in the course of his employment.