The Sophisticated Employer Blog

The Michigan Court of Appeals just released a published decision which only happens a handful of times during the year, and this one addresses an employment issue.

It is Smith (and intervening plaintiff Citizens Insurance Company) v. Chrysler Group, LLC, in which the appellate court reversed the Michigan Compensation Appellate Commission and awarded worker’s disability compensation benefits. Let’s look at this case to see what happened.

Apparently, Raymond Smith was an exempt employee who worked as an auditor for Chrysler. Normally, Smith worked out of the Auburn Hills Technology Center, but on this fateful morning, he was driving his personal vehicle from his home in Clarkston, Michigan to Chrysler’s Jefferson Avenue North Assembly Plant in Detroit to conduct an audit that was to begin at 7:30am. Rather than stop at the Tech Center, he drove directly to the plant, transporting the company owned computer and cellphone and the documents he needed for the audit. Chrysler paid his mileage for the distance between the Tech Center and the plant.

Smith was involved in an automobile accident and was granted worker’s disability compensation benefits by the magistrate judge. This decision was appealed by Chrysler and the magistrate was reversed. Smith then appealed the decision to the Michigan Court of Appeals which denied Smith’s request to even hear the case. Smith appealed to the Michigan Supreme Court which remanded it back to the Court of Appeals to hear the case.

This may be why the decision is published, and it is where our story picks up. Incidentally, I am guessing that Citizens Insurance intervened because it insured Smith’s car and would have been facing a potential claim if worker’s disability compensation benefits were denied.  

So, one would think that if employees were injured on their  commute to work, they wouldn’t receive worker’s disability compensation benefits. But, the following exceptions exist:

(1) the employee is on a special mission for the employer, (2) the employer derives a special benefit from the employee’s activity at the time of the injury, (3) the employer paid for or furnished employee transportation as part of the employment contract, (4) the travel comprised a dual purpose combining the employment-related business needs with the personal activity of the employee, (5) the employment subjected the employee to excessive exposure to traffic risks, or (6) the travel took place as a result of a split-shift working schedule or employment requiring a similar irregular nonfixed working schedule. Bowman v RL Coolsaet Construction Company, 275 Mich App 188, 191 (2007).

The appellate court noted that both the magistrate and the Appellate Commission erred when they conducted a balancing test under an old four factor test from a case called Stark v. L.E. Myers Company instead of determining if any of the above six factors in Bowman applied.

While the magistrate applied the wrong test, he actually reached the right result, finding that Smith was on “a special mission for his employer” (the first Bowman factor) when the accident happened.

While 70% to 80% of his work consisted of travel to other locations, Smith’s main work site was the Tech Center (as specified by his employee location code and because this is where he performed his “in office” work). Thus, Smith did not just work at different locations, his job was to travel to different locations to conduct audits.

In addition Chrysler paid mileage to Smith when he traveled to the other locations, thus satisfying the third Bowman factor. The court found that this factor alone would have sufficient to make Smith eligible for worker’s disability compensation benefits. Thus, the appellate court reversed the Compensation Appellate Commission finding Smith eligible for benefits.

What? Holy cow! Who knew that paying mileage to an employee could have such a consequence? We may all want to rethink this. This is a published case, so it should not be ignored.

If you need to have your employment policies reviewed, contact an experienced employment attorney.