Employee Signs Employment Contract Under Indiana Law
An employer may present a prospective employee with a contract that includes a forum selection clause. This requires the employment relationship to be governed by the law of a different state than the state where the employee is hired or expects to work. However, that contract may not, under Massachusetts law, deprive the employee of the workers’ compensation benefits available in Massachusetts, if the employee is otherwise eligible.
Mark Mendes applied for a job with Franklin Logistics, Inc., an Indiana-based trucking company, and before he was hired he agreed to sign an employment agreement, stating that any claims he might later bring for occupational injury or illness from his work for Franklin Logistics would be governed by the laws of Indiana.
Employee is Injured
On January 18, 2010, while working for Franklin Logistics in Maine, Mr. Mendes sustained an injury to his lower back. Due to the pain, he declined the dispatcher’s directive to seek treatment in Pennsylvania and instead traveled to St. Luke’s Hospital in New Bedford, Massachusetts. At the time of the proceedings before the Reviewing Board, Mr. Mendes had not returned to work.
Employee Receives Benefits, But Then Ruling is Reversed
Mr. Mendes filed a claim for benefits, which the insurer, Fidelity & Guaranty Ins. Co., denied on several grounds, including lack of Massachusetts jurisdiction. Following a § 10A conference, Mr. Mendes was awarded § 34 benefits for a closed period and § 35 benefits for an additional closed period. Both parties appealed the order.
The hearing judge, although agreeing that Mr. Mendes’ back injury was work-related, as well as medically partially disabling and totally vocationally incapacitating, still denied benefits and dismissed Mr. Mendes’ claim on the grounds that Massachusetts had no jurisdiction.
Reviewing Board Rejects Forum Selection Clause, Recommits Claim
The Reviewing Board of the Massachusetts Department of Industrial Accidents found that Mr. Mendes might be able to invoke Massachusetts workers’ compensation law on the theory of localization, which means that he had worked enough time in Massachusetts for his claim to be filed here. However, this would not be possible if the employment contract was valid, Mr. Mendes’ claim regarding his work injury was governed by Indiana law, and no Massachusetts workers’ compensation benefits were available.
The Reviewing Board agreed with the insurer that a forum selection clause like the one Mr. Mendes signed was enforceable in Massachusetts, as long as it was not unfair or unreasonable to do so. However, the Board noted that the question whether a forum selection clause was enforceable in the specific workers’ compensation context did not appear to have been decided in Massachusetts. Under the applicable law in the state, the Massachusetts Workers’ Compensation Act, an agreement by an employee waiving his or her right to compensation is invalid. G. L. c. 152, § 46. The only exceptions are:
- Notice by the employee at the time of hire that he or she retained the common law right to sue his or her employer in the general courts, G. L. c. 152, § 24; and
- The waiver of future benefits as part of an approved lump sum settlement. G. L. c. 152, § 48.
The Reviewing Board found that neither exception applied to Mr. Mendes.
In addition, the Reviewing Board agreed with Mr. Mendes that if he had not signed the contract, he would not have been hired, and that this situation is a classic example of unequal economic power between the parties. In such a case, the choice of law provision would not be enforced in Massachusetts because the party against whom the provision was applied, in this instance Mr. Mendes, did not have a meaningful choice at the time of negotiation.
For all these reasons, the Reviewing Board recommitted Mr. Mendes’ claim to the administrative judge for findings as to whether jurisdiction was proper in Massachusetts under the theory of localization.
If you have become ill or been injured at work, for more information about the workers’ compensation process, contact a Boston workers’ compensation attorney at Pulgini & Norton to schedule a free consultation to find out more about what our lawyers can accomplish for you. Contact us with a brief description of your situation or reach us by phone at our Downtown Boston, Hyde Park, or Braintree, Massachusetts office locations.