Duke v. Xylem

• Court: Court of Appeals of North Carolina
• Decided: July 5, 2022
• Docket: 21-450
• Status: Published

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

2022-NCCOA-449

No. COA21-450

Filed 5 July 2022

North Carolina Industrial Commission, I.C. No. 18-752665

LESLIE DUKE, Employee, Plaintiff,

v.

XYLEM, INC., Employer, BERKSHIRE HATHAWAY HOMESTATE INS. CO., Carrier, Defendants.

Appeal by plaintiff from opinion and award entered 15 March 2021 by the

North Carolina Industrial Commission. Heard in the Court of Appeals 9 February

2022.

Bryant Duke Paris III PLLC, by Bryant Duke Paris III, for plaintiff-appellant.

Teague Campbell Dennis & Gorham, L.L.P., by Heather T. Baker and Lindsay A. Underwood, for defendants-appellees.

DIETZ, Judge.

¶1 Plaintiff Leslie Duke was injured in Virginia while working as a driver for

Xylem, Inc.

¶2 Xylem’s principal place of business is Virginia and Duke’s principal place of

employment was Virginia. Duke accepted an offer of employment with Xylem by

phone from his home in North Carolina and later traveled to Virginia to complete a

driver’s test, drug screening, and background check as part of an “onboarding” DUKE V. XYLEM, INC.

Opinion of the Court

process.

¶3 Duke initially filed his workers’ compensation claims in Virginia, but the

Virginia Workers’ Compensation Commission dismissed some of the claims for failure

to respond to discovery requests and dismissed the remaining claims after Duke

withdrew them. Duke then filed a workers’ compensation claim in the North Carolina

Industrial Commission. The Commission dismissed the claim for lack of subject

matter jurisdiction.

¶4 On appeal, Duke argues that the Commission erred in its jurisdictional

analysis because his contract of employment was formed in North Carolina when he

accepted Xylem’s offer of employment on the phone.

¶5 We reject this argument. As explained below, in a strange quirk of our

jurisprudence, we are not bound by the Commission’s jurisdictional fact finding and

must make our own findings based on an independent review of the record.

Nevertheless, we agree with the Commission and find that the last act necessary to

create a binding employment contract occurred in Virginia, when Duke underwent

an “onboarding” process that included a mandatory drug screening and background

check that, under company policy, were prerequisites to hiring any prospective

employee as a commercial driver. Accordingly, we affirm the Commission’s opinion

and award. DUKE V. XYLEM, INC.

Facts and Procedural History

¶6 Xylem, Inc. is a Virginia company that manages and clears vegetation and

trees for utility companies and municipalities. Xylem is incorporated in Virginia,

headquartered in Norfolk, Virginia, and maintains its fleet operation facility in

Wakefield, Virginia. Xylem does not have an office in North Carolina.

¶7 Leslie Duke worked as a commercial truck driver for many years. Duke lives

in Hertford, North Carolina.

¶8 On 6 October 2017, Xylem’s vice president, William Hoover, called Duke and

invited him to come to the company’s Wakefield fleet facility to discuss possible

employment. Duke agreed and traveled to Wakefield where the parties discussed

Duke’s driving experience, and Duke inspected Xylem’s trucks and other equipment.

¶9 The following week, Hoover called Duke at his home in North Carolina and

offered Duke a position with Xylem. The particulars of this job offer are disputed.

Duke contends that he accepted the job offer and was immediately hired.

¶ 10 Xylem contends that Duke’s employment offer, as with any employee of the

company, was contingent on Duke first completing a series of pre-hiring conditions

including a driver’s test, drug test, and driver’s license background check. Both

Xylem’s president and chief executive officer, Randolph Hoover, and Xylem’s

operations manager, Matthias Breyer, testified that Xylem’s hiring process requires

a prospective employee to complete an onboarding process that includes a driver’s DUKE V. XYLEM, INC.

test, drug test, and background check before formally becoming an employee of the

company.

¶ 11 On 17 October 2017, Duke arrived at Xylem’s Wakefield facility and completed

the employee onboarding requirements, including authorizing and submitting to drug

screening and a background check. The authorization form for the drug screening

indicated that it was directed at a “prospective employee.” Duke acknowledges that

he completed and electronically signed the hiring documentation, including the drug

screening authorization, on an electronic device while at the Wakefield facility on 17

October 2017. But Duke maintains that his signature on his written employment

documentation is a forgery.

¶ 12 Duke began working as a fleet support employee, driving a truck from the

Wakefield, Virginia fleet facility to various job sites, primarily in Virginia. In April

2018, Duke sustained a rotator cuff tear or cervical spine herniation while working

in Virginia.

¶ 13 Duke initially filed multiple claims for workers’ compensation with the

Virginia Workers’ Compensation Commission. Duke alleged five different dates of

injury in these filings and acknowledged Virginia’s jurisdiction as a Virginia

employee.

¶ 14 Ultimately, the Virginia Workers’ Compensation Commission dismissed

portions of Duke’s claims for failure to respond to discovery requests and dismissed DUKE V. XYLEM, INC.

the remaining claims after Duke informed the commission that he was withdrawing

them.

¶ 15 Duke later filed a workers’ compensation claim with the North Carolina

Industrial Commission. The Commission dismissed Duke’s claim in an opinion and

award finding that Duke’s contract of employment was formed in Virginia; Xylem’s

principal place of business was in Virginia; and Duke’s principal place of employment

was Virginia. Thus, the Commission concluded that it lacked subject matter

jurisdiction over Duke’s claim. Duke timely appealed.

Analysis

¶ 16 Duke argues that the Commission erred by dismissing his workers’

compensation claim for lack of subject matter jurisdiction. Specifically, he contends

that the Commission erred by finding that the last act necessary to create a contract

of employment between Duke and Xylem occurred in Virginia.

¶ 17 When an employee sustains a workplace injury outside the State, the

Industrial Commission has subject matter jurisdiction only if one of three statutory

criteria apply: (1) the contract of employment was made in this State; (2) the

employer’s principal place of business is in this State; or (3) the employee’s principal

place of employment is in this State. N.C. Gen. Stat. § 97-36; Davis v. Great Coastal

Express, 169 N.C. App. 607, 610 S.E.2d 276 (2005).

¶ 18 On appeal, Duke does not challenge the Commission’s findings on the second DUKE V. XYLEM, INC.

and third criteria—that Xylem’s principal place of business is Virginia and that

Duke’s principal place of employment was Virginia. Duke’s argument focuses entirely

on the first criteria and the Commission’s finding that Duke’s contract of employment

was made in Virginia.

¶ 19 “To determine where a contract for employment was made, the Commission

and courts of this state apply the ‘last act’ test. For a contract to be made in North

Carolina, the final act necessary to make it a binding obligation must be done here.”

Murray v. Ahlstrom Indus. Holdings, Inc., 131 N.C. App. 294, 296, 506 S.E.2d 724,

726 (1998) (citation omitted). The last act of the employment contract is generally the

employee’s acceptance of employment, but it can also be the completion of other

conditions of employment that come after an employee accepts the offer of

employment, such as an “orientation, road test, drug test, and physical exam.”

Holmes v. Associated Pipe Line Contrs., Inc., 251 N.C. App. 742, 750, 795 S.E.2d 671,

676 (2017). The key factor in determining whether these sorts of employment

requirements constitute the “last act” is whether there is a possibility that the

prospective employee could fail to meet the criteria, thus becoming ineligible for

employment. Id.

¶ 20 So, for example, in Holmes, this Court distinguished a requirement to submit

to a mandatory drug screening (a necessary last act) from filling out “routine”

employment paperwork (not a necessary last act) because “a prospective employee’s DUKE V. XYLEM, INC.

demonstrated willingness to submit to a drug test is more than simply an

administrative formality given that—unlike the completion of garden-variety

personnel forms—the taking of a drug test carries the risk of failing the test.” Id. at

751, 795 S.E.2d at 676–77. Because passing that drug test was a precondition for

employment at the company, “taking of the drug test was the last act necessary to

form a binding employment relationship.” Id. at 751, 795 S.E.2d at 677.

¶ 21 Here, the Commission found that Duke’s “successful completion of the drug

test and other onboarding tasks” was a condition precedent to employment. The

Commission further found, given that “the successful tests and other processes that

took place on 16 and 17 October 2017 were conditions precedent to Plaintiff’s

employment, the Full Commission finds that the ‘last act’ necessary to render

Plaintiff’s employment a binding contract occurred in Virginia.”

¶ 22 Ordinarily, this Court’s review of fact finding by the Commission is “limited to

consideration of whether competent evidence supports the Commission’s findings of

fact.” Id. at 747, 795 S.E.2d at 674. Under this standard, when there is competing

evidence and the Commission assesses what evidence is more credible or deserves

greater weight, this Court must accept the Commission’s findings if there is any

competent evidence supporting them, even if there is substantial contrary evidence.

Hedrick v. PPG Indus., 126 N.C. App. 354, 357, 484 S.E.2d 853, 856 (1997).

¶ 23 But in a strange quirk of our jurisprudence, this rule does not apply to DUKE V. XYLEM, INC.

“jurisdictional facts” found by the Commission. Our Supreme Court recently

reaffirmed that “the finding of a jurisdictional fact by the Industrial Commission is

not conclusive upon appeal even though there be evidence in the record to support

such finding. The reviewing court has the right, and the duty, to make its own

independent findings of such jurisdictional facts from its consideration of all the

evidence in the record.” Cunningham v. Goodyear Tire & Rubber Co., 2022-NCSC-46,

¶ 19.

¶ 24 To be sure, in a case like this one, the rule does not make much sense. It is a

long-standing principle of appellate law that appellate courts “cannot find facts.”

Pharr v. Atlanta & Charlotte Air Line Ry. Co., 132 N.C. 418, 423, 44 S.E. 37, 38 (1903).

The Commission, unlike this Court, has the power to hear witness testimony if it

chooses, and thus can “observe the witnesses or their demeanor” and make key

credibility assessments when they are needed. Calloway v. Mem’l Mission Hosp., 137

N.C. App. 480, 484, 528 S.E.2d 397, 400 (2000). In tracing the history of this

jurisdictional rule, it is not clear that it was intended to yield the scenario here—

where this Court is forced to review transcripts of witness testimony, assess

credibility on a cold appellate record, and make our own fact findings that could

contradict the findings of a tribunal capable of calling witnesses and observing their

live testimony.

¶ 25 Nevertheless, this is the law and we must follow it. In re Civil Penalty, 324 DUKE V. XYLEM, INC.

N.C. 373, 384, 379 S.E.2d 30, 37 (1989). Examining the entire record in this case, we

conclude that the Commission properly found that the last act necessary to create a

binding employment contract occurred in Virginia. Randolph Hoover, Xylem’s

president and chief executive officer, testified in a deposition that he designed the

company’s hiring policies and wrote the employee handbook. Under these

employment policies, Xylem will not hire a commercial driver until the driver first

completes an orientation process that includes a mandatory drug screening and

driver’s license background check. Hoover testified that, under company policy,

prospective employees who have been offered a position cannot be hired until they

pass these initial screenings. Another company official, Matthias Breyer, confirmed

this testimony.

¶ 26 This testimony also is supported by the Xylem employee handbook, which

states that prospective employees must complete the required orientation process

before they are fully employed. Finally, when Duke completed and signed the drug

screening authorization form in Wakefield, Virginia on 17 October 2017, it indicated

that he was a “prospective employee” on the form.

¶ 27 We cannot identify any basis in the record to discredit this testimony and

supporting documentation. Moreover, Xylem’s employment practice—requiring the

drug screening and background check as a prerequisite to employment as a

commercial driver—is consistent with the practice at other, similar businesses DUKE V. XYLEM, INC.

examined in our case law. See, e.g., Taylor v. Howard Transp., Inc., 241 N.C. App.

165, 171, 771 S.E.2d 835, 839 (2015); Holmes, 251 N.C. App. at 751, 795 S.E.2d at

676. Accordingly, in our de novo examination of the entire record, we find that the

last act necessary to create a binding employment contract occurred in Virginia and,

as a result, the Commission properly concluded that it lacked subject matter

jurisdiction over Duke’s workers’ compensation claim. We therefore affirm the

Commission’s opinion and award.

Conclusion

¶ 28 We affirm the Industrial Commission’s opinion and award.

AFFIRMED.

Judges MURPHY and JACKSON concur.