Courts are frequently called upon to decide when an employee’s injury is or is not work-related for purposes of compensation and both the statutes and case law offer guidance. A recent decision of the Minnesota Supreme Court nullified a test developed by the Workers’ Compensation Court of Appeals, but seems not to have changed the law.
In the everyday course of human events, including employment and otherwise, accidents occur that result in injury. But while no one—except a very good defense lawyer—would argue that the event, accident, and injury are totally unrelated, establishing a causal relationship among them for purposes of establishing eligibility for compensation remains a knotty challenge.
Minnesota courts and the Minnesota Legislature have wrestled with this question for over 100 years, most recently to decide whether two key phrases in the Workers’ Compensation Act, “in the course of” and “arising out of,” should be interpreted together as one, together as two, or separately in determining whether an injury is work-related so as to warrant compensation to the injured party.
On December 26, 2013, the Minnesota Supreme Court issued its decision in the case of Dykhoff v. Xcel Energy, specifically rejecting a test that had been created years earlier by the Minnesota Workers’ Compensation Court of Appeals (“WCCA”) to be used when analyzing whether an injury “arose out of and in the course of” employment. The supreme court specifically ruled that the statute and prior decisions from the supreme court required that such an analysis of “compensability” required that the two phrases—“arising out of” and “in the course of”—be analyzed separately. The court also required that each factor must be specifically met before an injury can be deemed to be “compensable.”
Since the supreme court’s decision in Dykhoff, plaintiff and defense attorneys have debated the status of the law and whether the court’s decision radically changed it. Some have even suggested that the Minnesota Legislature address the issue, contemplating revision of the involved statutory provision.
Statutory & Judicial History
The Minnesota Workers’ Compensation Act was created by the Minnesota Legislature in 1913. The legislature required that, for someone’s personal injury to be compensable under the act, it must be caused by an accident “arising out of and in the course of his employment.”1
The Minnesota Supreme Court, when analyzing the statute, consistently and from the earliest stages concluded that the statute required two elements: “in the course of” and “arising out of.” For example, in Novack v. Montgomery Ward and Company the Minnesota Supreme Court stated:
“In the course of” refers to the time, place and circumstances under which the accident takes place … . It “arises out of” the employment when it reasonably appears from all the facts and circumstances that there is a causal connection between the conditions which the employer puts about the employee and the resulting injury. If the injury can be seen to have followed as a natural incident of the work and to have been contemplated by a reasonable person familiar with the whole situation as a result of the exposure occasioned by the nature of the employment, then it arises “out of” the employment.2
When specifically discussing the “arising out of” requirement, the court required that there must be some “increased risk” of employment associated with the injury, referring to the concept in terms such as “positional risk,” “street risk,” “incidental risk,” and “heightened risk.”
In Auman v. Breckenridge Telephone Company,3 the court denied the claim of an employee who was injured while walking from the garage on the employer’s premises to his office; he was struck by a bullet, accidentally discharged from a gun by a boy in an adjacent apartment building. The court determined that the injury did not “arise out of” employment and concluded that “some connection must be found between the employment and the accident so that the latter may, with some reason, be said to arise out of the former.” Specifically, with regard to the facts of this case, the court concluded that, “In order for an employee to be awarded compensation from his employer for disability caused by the accidental discharge of a gun, he must prove that one in the employment is more likely to be injured from such a source than those who are not.”
In 1957, the Minnesota Supreme Court issued its decision in Nelson v. City of St. Paul,4 again addressing whether an injury “arises out of” employment. In that case, the employee was a teacher who was struck by a batted ball while walking on a public sidewalk adjacent to the playground of the school at which she taught. The injury was felt to be compensable, even though the employee was on a public sidewalk and had not specifically commenced her work day. When discussing the “arising out of” element, the court stated that it is:
expressive of the requirement that there must be a causal connection between the conditions which the employer puts about the employee and the employee’s resulting injury. The requisite causal connection—which need not embrace direct and proximate causation as for tort—exists if the employment by reason of its nature, obligation or incidents may reasonably be found to be the source of the injury-producing hazard. The causal connection of source is supplied if the employment exposes the employee to a hazard which originates on the premises as part of the working environment, or if the employment, as part of the working environment, peculiarly exposes the employee to an external hazard whereby he is subjected to a different and greater risk than if he had been pursuing his ordinary personal affairs. In other words, if the injury has its origin with a hazard or risk connected with employment, and flows therefrom as a natural incident of the exposure occasioned by the nature of the work, it arises out of the employment.5
The Novack and Nelson decisions were cited by the supreme court in its 1988 decision in Gibberd v. Control Data Corporation.6 In that case, the court stated that “the very words ‘arising out of’ connote a causal connection, whereas ‘in the course of’ refers to the time, place and circumstances of the incident causing the injury.”7
Tests of Work Connectedness
In 1994, the Minnesota Court of Appeals issued its decision in United Fire and Casualty Company v. Maw,8 articulating principles that formed the basis of an analysis that was later used by the Workers’ Compensation Court of Appeals when analyzing compensability issues. In that case, the employee was injured when he was struck by a truck while standing on a street corner where it was prearranged he should meet to begin his work day. A tort claim was made against the driver and owner of the truck. The truck was driven by a coworker and owned by the president of the employer of the employee. The truck’s insurer denied coverage, asserting that the incident was work-related and, therefore, the workers’ compensation policy should apply.
Analyzing whether the injury was compensable under the Minnesota Workers’ Compensation Act, the Minnesota Court of Appeals quoted Arthur Larson’s treatise, Workmen’s Compensation for Occupational Injuries and Death,9 for the proposition that: “The ‘arising out of’ and ‘in the course of’ tests are not applied independently; they are elements of ‘a single test of work connection.’” 10 The appellate court then applied a “positional risk test analysis” to the facts presented and concluded that the injury should be considered work-related. The court also determined that the claimant was in the course of his employment at the time of the injury.11
Following the decision in the United Fire case, the WCCA began to alter its analysis in compensability cases. For example, in Duchene v. Aqua City Irrigation,12 the WCCA cited to United Fire approvingly and began to use the concept of “work-connectedness.” In Duchene, the employee had been eating lunch, during a noon lunch break. When he arose from a seated position, his knee popped and he experienced pain. The WCCA concluded that in such situations, where the injury is “unexplained,” the two concepts of “arising out of” and “in the course of” are not clearly separable, but “are expressed similarly in the ‘circumstances’ of the injury.” In so doing, the WCCA, in effect, applied a “positional risk” analysis when it stated that
the fact that the employee could not explain how the knee injury occurred does not make the fact of its occurrence during work hours, at the worksite, while engaged in activities incidental to the employment, any less work-connected. On the facts of this case, the absence of any evidence that the injury arose in a place or in circumstances personal to the employee, the requirement that the injury have its “origin” or “source” in the employment is satisfied.13
The WCCA began to refine its analysis when it issued its decision in Bohlin v. St. Louis County.14 In that case an employee parked her vehicle in the employee parking lot to begin her work day. As she turned from the vehicle, she felt something pinch in her lower back. In finding that the injury was not compensable, the WCCA created a new test to be applied to determine whether an injury arose out of and in the course of employment. The court created what it called a “balancing” or “work connection” test.
Although the WCCA in Bohlin stated that the primary test for determining whether an injury arises out of employment is the “increased risk” test, and denied Bohlin’s claim of injury on that basis, it did not stop there. Reviewing other types of risk scenarios and the tests applied to those scenarios, the court explored the question of compensability from several different angles. The court first noted that a positional risk analysis had been applied in cases where an injury was caused by a street risk or hazard, but that this did not fit the facts in Bohlin. The court also noted that an increased risk analysis had been applied in cases where the injury was caused by a neutral risk occurring on work premises, such as an automobile, lightning, or an assault. Once again, the WCCA indicated that the facts in the Bohlin case did not fit that analysis. The WCCA also noted that the Minnesota Supreme Court, in reviewing compensability of different types of injuries, had consistently applied the increased risk test.
The WCCA then turned to United Fire and Casualty Company v. Maw for direction. The WCCA cited that case for the proposition that, “Although the ‘arising out of’ and ‘in the course of’ requirements expressed two different concepts, in practice these requirements are not independent but are ‘elements of a single work-connection.’” Then, apparently, because United Fire discussed a passage in Larson’s for the proposition that in any given case a certain level of work-connection must be established, the WCCA created what has been subsequently referred to as a “balancing test.” This test was described by the court as follows: “If the ‘course’ test is weak, but the ‘arising’ test is strong, the necessary minimum quantum of work connection will be met, as it is also if the ‘arising’ test is weak and the ‘course’ factor is strong.”
Since Bohlin, the WCCA has issued a lengthy series of decisions, at times applying the balancing test and at other times concluding that the balancing test need not be applied. The application of the balancing test reached its culmination in the WCCA decision in Dykhoff v. Xcel Energy.15 In Dykhoff, the employee fell while traversing a corridor in the basement level of the Xcel headquarters in downtown Minneapolis. In the process, she injured her knee. The compensation judge found that the injury did not “arise out of” her employment, since she did not show that the injury resulted from any increased risk of injury.
The WCCA reversed, concluding that the “proper analysis of compensability requires the balancing of both the ‘arising out of’ and ‘in the course of’ elements to determine whether, on the facts of each case, there is sufficient ‘work connection.’” The WCCA found that the “in the course of” element was strong enough to outweigh the deficiencies in the “arising out of” element, reversed the denial of the claim and awarded benefits. In the course of its decision, the WCCA not only cited to its prior decision in Bohlin, but also cited to United Fire.
Dykhoff v. Xcel Energy
The Minnesota Supreme Court reversed the WCCA. In its decision, the high court specifically rejected the Bohlin test “because it fails to give effect to all parts of Minn. Stat. Sec. 176.021, subd. 1.” The court went on to state that the plain language of the statute requires the employee to demonstrate that an injury “arises out of and in the course of” the employment. The work-connection test, as used by the WCCA, in the supreme court’s judgment, would “allow a court to consider the statutory elements as alternatives—that is, to balance the two factors against each other in a fashion that could relieve the employee of the burden of proof on one element if there is strong evidence of the other element.” The court concluded that, “Because the work-connection test renders either the ‘arising out of’ or the ‘in the course of’ elements superfluous and a portion of the statute ineffective, we reject the Bohlin test.”
When discussing the “increased risk” test and what it means, the court stated that, “Our precedent requires that Dykhoff show that her employment was ‘the predominant factor in peculiarly exposing her—in a different manner and in a greater degree than if she had been pursuing her ordinary personal affairs—to a hazard’ and that the hazard ‘may or may not be peculiar to or exclusively associated with the employment.’”16
The supreme court made clear more is required to satisfy the “arising out of” requirement in Minn. Stat. Sec. 176.021, subd. 1, than simply an injury occurring at work.
Separate but Equal Tests
The Minnesota Supreme Court has made it very clear that the Workers’ Compensation Act, which was created in 1913, as well as the decisions analyzing the law which have been issued by the supreme court since that time, establish that, for purposes of compensability, there are two requirements that must be met: (1) It must be shown that the injury “arose out of” employment; (2) It must also be shown that the employee was “in the course of” employment at the time of the injury.
Each of these factors must be analyzed separately. The balancing test which had been created by the WCCA, in which the deficiencies of one element can be outweighed by the strengths of the other, was specifically rejected. When analyzing these two concepts, the descriptions provided by the Minnesota Supreme Court in the Novack case remain accurate today: “‘in the course of’ refers to the time, place and circumstances under which the accident takes place … . It ‘arises out of’ the employment when it reasonably appears from all the facts and circumstances that there is a causal connection between the conditions which the employer puts about the employee and the resulting injury.”
When dealing with the “arising out of” element, the supreme court indicated that the employment must be the “predominant factor” in peculiarly exposing the employee to a hazard, in a different manner and to a different degree than had the employee been pursuing her ordinary affairs and that the hazard may or may not be peculiar to or exclusively associated with the employment.
To illustrate the concept, the supreme court discussed an earlier decision in Kirchner v. County of Anoka. The employee in Kirchner had been injured while walking down stairs. The injury was found to be compensable.
In Dykhoff, the supreme court indicated that the activity in Kirchner was not “obviously hazardous.” However, the fact that the stairway on which Kirchner fell did not have a handrail “increased the employee’s exposure to injury beyond that” the employee would face in his or her everyday nonwork life. As such, the injury became causally connected to that condition and, therefore, satisfied the “arising out of” element. In effect, the absence of the handrail exposed the employee in Kirchner to a “special hazard,” even though the workplace condition was not obviously hazardous.
In the final analysis, the supreme court’s decision in Dykhoff did not change the law. The court clarified what the law requires, both in terms of the legislative requirement and how that requirement has been interpreted by the court. In effect, it was the WCCA, whose analysis deviated from the original intent of the legislature and ran counter to the prior directives of the Minnesota Supreme Court, who altered the interpretation and application of the law.
1 Minn. Stat. Ch. 84A, Sec. 8195 (1913).
2 Novack v. Montgomery Ward and Company, 158 Minn. 495, 498, 198 N.W.290, 292 (1924).
3 188 Minn. 256, 246 N.W. 889 (1933).
4 Nelson v. City of St. Paul, 249 Minn. 53, 81 N.W. 2d 272 (1957).
5 Id., 249 Minn. at 55-56.
6 Gibberd v. Control Data Corporation, 424 N.W.2d 776 (Minn. 1988).
7 Id., at 780.
8 United Fire and Casualty Company v. Maw, 510 N.W.2d 241 (Minn. App. 1994).
9 Arthur Larson, Workmen’s Compensation for Occupational Injuries and Death, Section 29.00 (1993).
10 United Fire, supra n. 8 at 244.
11 Id., at 245.
12 Duchene v. Aqua City Irrigation, 58 W.C.D. 223 (02/19/1998) (aff’d., 577 N.W.2d 779 (Minn. 1998)).
14 Bohlin v. St. Louis County, 61 W.C.D. 69 (09/20/2000).
15 Dykhoff v. Xcel Energy, No. WC12-5436 (WCCA 11/30/2012).
16 Dykhoff v. Xcel Energy, A12-2324, ___N.W.2d.___ (Minn. 12/26/2013), citing Breimhorst v. Beckman, 227 Minn. 409, 421-22, 35 N.W.2d 719, 728 (1949).
17 Kirchner v. County of Anoka, 339 N.W.2d 908 (Minn. 1983).