Opinion ID: 1160240
Heading Depth: 1
Heading Rank: 3

Heading: jurisdiction

Text: In the proceeding below, the Board held that it had jurisdiction to hear appellee's claim under either ¶ 2 or ¶ 3 of § 386-6. We affirm the finding of jurisdiction on the basis of ¶ 2. Section 386-6 provides: Territorial applicability. The provisions of this chapter shall be applicable to all work injuries sustained by employees within the territorial boundaries of the State. If an employee who has been hired in the State suffers work injury, he shall be entitled to compensation under this chapter even though the injury was sustained without the State. The right to compensation shall exclude all other liability of the employer for damages as provided in section 386-5. All contracts of hire of employees made within the State shall be deemed to include an agreement to that effect. If an employee who has been hired without the State is injured while engaged in his employer's business, and is entitled to compensation for the injury under the law of the state or territory where he was hired, he shall be entitled to enforce against his employer his rights in this State if his rights are such that they can reasonably be determined and dealt with by the director of labor and industrial relations, the appellate board, and the court in this State. As ¶ 1 of § 386-6 makes clear, the Workers' Compensation Law applies to all work injuries sustained by employees within the territorial boundaries of the State. If appellee had suffered a work injury in Hawaii, then the only inquiry  one easily answered  would have been whether she was an employee. But the alleged work injury undisputedly occurred without the State or outside the territorial boundaries of Hawaii. Therefore, either ¶ 2 or ¶ 3 of § 386-6 had to apply before the Board had jurisdiction to hear appellee's claim. [1] Paragraph 2 provides that [i]f an employee who has been hired in the State suffers work injury, [s]he shall be entitled to compensation ... even though the injury was sustained without the State. (Emphasis added). Since appellee was admittedly an employee of appellant United Air Lines, we must determine whether she was hired in the State. The term hired in the State suggests different definitions. The definition that appellants support, which the Board below rejected, is that the contract of hire is created in the State. This definition would require an employee to be under a contract of hire created in Hawaii before she could recover for out-of-state injuries. The acceptance of this definition would place Hawaii in the group of states which adheres to the contract theory of workmen's compensation for out-of-state injuries. By this theory, the place where the employment contract was made becomes decisive. The contract theory holds that [t]he compensation law of the state of contract ... [becomes] a part of that contract, and therefore applie[s] no matter where the injury occur[s]. 4 A. Larson, Workmen's Compensation § 87.31 (1978). For example, suppose a woman employed under a contract created in Hawaii had thereafter been permanently transferred to New York, losing all contact with Hawaii. Under the contract theory, if she suffered an injury years later in New York or any other state besides Hawaii, she would then be entitled to compensation under ¶ 2 of § 386-6. The contract theory, therefore, looks not to the present but to the past. The important factor is not whether the employee now has some substantial connection with Hawaii but whether the employee's contract of hire  deliberately or accidently  was created in Hawaii. By the example given above and for other reasons, including those given below, the contract theory leads to unsatisfactory results: The confusion and absurdities which would arise under [the contract theory] are readily apparent: In cases involving a position such as that of traveling salesman for a company operating in several states, the administration and effectiveness of [workmen's compensation] acts might be seriously impeded. Liability for injuries, except those incurred in the course of employment within the state could be escaped by the simple means of placing the machinery of hiring in motion outside of the state. Where a workman, continuously employed, had been assigned to duties in several states, it might be necessary to examine the nature of the contract and its modifications made in every state in which he had worked. The facts of each new assignment of duties would have to be studied to determine if at any time there was a new hiring, or if the changes in duties involved merely unsubstantial modifications of the original contract of hire... . [Furthermore, many injured] employees may never reside or [even] work in [the] state [where the contract was made]. Fay v. Industrial Commission, 100 Utah 542, 114 P.2d 508, 510-11 (1941). We believe that a better definition of hired in the State is that an employment relationship exists in the State. This definition follows the employment relationship theory, which has been hailed as the most relevant to [workmen's] compensation. . and the least artificial. 4 A. Larson, supra, § 87.41; see Fay v. Industrial Commission, supra, 114 P.2d at 510-11. Other courts have also provided a broad construction of hired in the State. For example, the Utah Supreme Court has interpret[ed] the phrase hired in this state to mean the status of being hired, or in other words, the maintenance of the status of employer and employee in this state... . Id. at 114 P.2d 510 (some commas omitted). [2] In addition, the Texas Supreme Court has commented that [t]he phrase, who has been hired in this State, has no reference to the place where the contract of hiring took place. The test is: What was the status of the employee at the time of injury with regard to being a Texas employee? If, at such time, he occupied the status of a Texas employee, he is entitled to protection under our Compensation Statutes, even though he was working out of the state. Southern Underwriters v. Gallagher, 135 Tex. 41, 45, 136 S.W.2d 590, 592 (1940); accord, Renner v. Liberty Mutual Insurance Co., 516 S.W.2d 239, 241 (Tex.Civ.App. 1974). We hold that the phrase hired in the State as used in ¶ 2 of § 386-6 incorporates the employment relationship test. To be covered under ¶ 2, an employee must have an employment relationship existing in Hawaii at the time of her injury. See generally 4 A. Larson, supra, §§ 87.40-44. Here, appellee was maintaining her employment status in Hawaii at the time her out-of-state injury occurred: she was a flight attendant assigned to United's Honolulu base; although she spent much time away from Hawaii due to the nature of her work, her principal place of employment was situated in Hawaii; and she was a bona fide resident of Hawaii. We would be remiss if we denied the protection of our Workers' Compensation Law to a Hawaii employee. Having found jurisdiction on the basis of ¶ 2 of § 386-6, we find it unnecessary to examine ¶ 3.