Nevada Supreme Court Sets Out Rules Regarding Traveling Employees
In a case of first impression, the Supreme Court of Nevada addressed the traveling employee rule and, quoting Larson’s Workers’ Compensation Law, § 25.01, approved of the so-called Larson rule that traveling employees remain within the course of their employment continuously during the trip, except when a distinct departure on a personal errand is shown [Buma v. Providence Corp. Dev., 2019 Nev. LEXIS 75 (Dec. 12, 2019)]. The court vacated and remanded a lower court order that had denied workers’ compensation benefits to the widow and daughter of a traveling employee who died in an all-terrain-vehicle (ATV) accident while on a required business trip for his employer. The Supreme Court held the lower court erred when it based its denial of benefits on the basis of the going and coming rule. According to the high court, Nev. Rev. Stat. § 616B.612(3) created a traveling employee rule and that rule should have been utilized by the lower court.
Background
The deceased employee worked full-time as a vice president of sales for the employer. He split his time working at home in Reno, Nevada, and traveling out-of-state on business. The employee had broad discretion in carrying out his duties, worked irregular hours, and was constantly on call. He made his own travel arrangements.
When the employee traveled to Houston, Texas, he stayed with a local friend and independent affiliate of the employer, who owned a ranch about two hours from Houston. The two would travel into Houston to conduct business. On his last trip, the employee flew to Houston on Sunday and drove from the airport to his friend’s ranch in late afternoon. Their first business presentation was in Houston the following morning at 8:30 a.m. Sometime after 5 p.m. Sunday, the two went on an ATV ride around the ranch property, as they had done on some prior trips. While riding, the employee rolled his ATV and died at the scene.
His widow and daughter filed a workers’ compensation claim for death benefits. The insurer’s TPA denied the claim. The employee’s widow appealed administratively. The hearing officer affirmed the TPA’s determination that the employee’s death occurred during an activity that was not part of his work duties. The claimants again appealed the decision, arguing that the employee traveled to the Houston area solely for the purpose of work. The appeals officer affirmed the denial. The claimants then petitioned for, and the district court denied, judicial review. They appealed from that order.
Going and Coming Rule Did not Apply
The Supreme Court first observed that the going and coming rule did not apply in the case in as much as the deceased employee was a traveling employee and not an employee with a generally fixed schedule and place of work. The Court added that the claimants were correct in arguing that Nev. Rev. Stat. § 616B.612(3) created a traveling employee rule. Quoting Larson, the Court acknowledged that the traveling employee rule did not require coverage for every injury. Again quoting Larson, the Court held that a traveling employee should not recover for injuries sustained while on a personal errand amounting to a distinct departure from his or her employer’s business. The Court stressed that the “distinct departure” exception to the traveling employee rule comported with Nevada’s requirement that, to be covered by workers’ compensation, the injury must arise out of the employment.
Reasonable Recreational Needs During Downtime
The Court indicated that traveling employees may generally tend to their reasonable recreational needs during downtime without leaving the course of employment.
Category-Based Approach Should be Applied
The Court went on to hold that a “category-based approach” should be applied to traveling employees. For clarity’s sake, the Court said that risks necessitated by travel—such as those associated with eating in an airport, sleeping in a hotel, and reasonably tending to personal comforts—are deemed employment risks for traveling employees. Purely personal risks—such as a cardiac arrest, the risk of which was not aggravated by the conditions of the travel or employment—remain non-compensable under the Nevada Industrial Insurance Act. Additionally, neutral risks that traveling employees may encounter are compensable only if the increased-risk test is met.
Appeals Officer and District Applied Incorrect Rule
The Court observed that both the appeals officer and district court decided compensability based on three main facts:
- There were no company events scheduled for the day of the accident;
- The employee} was not meeting with clients until the following day; and
- The employee was not required to ride the ATV for work purposes.
The Court reasoned that while these factors might be significant in the non-traveling-employee context, these facts were not outcome-determinative under NRS 616B.612(3), the statutory rule for traveling employees. The first and second factual findings did not speak to the reality that the employee was required to be in the Houston area for work and that, to get there in time to make the scheduled joint presentation with his friend and colleague, the employee needed to arrive a day ahead of time. As for the third factual finding, the Court said it begged the outcome-determinative question: whether the employee’s ATV outing with his business associate/co-presenter while on a business trip amounted to a “distinct personal departure on a personal errand.”
Had the lower court used the correct legal principles, it would have been guided toward the facts made relevant by those principles. Instead, the lower court utilized the wrong standard and, therefore, did not adequately find the facts. Remand was required.