Duke v. Xylem ( 2022 )

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.
2022-NCCOA-449
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.
2022-NCCOA-449
Opinion of the Court
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.
2022-NCCOA-449
Opinion of the Court
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.
2022-NCCOA-449
Opinion of the Court
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.
2022-NCCOA-449
Opinion of the Court
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.
2022-NCCOA-449
Opinion of the Court
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.
2022-NCCOA-449
Opinion of the Court
“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.
2022-NCCOA-449
Opinion of the Court
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.
2022-NCCOA-449
Opinion of the Court
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.