DOUGLAS W. SUMMERS, Employee/Appellant, v. NORTHERN INDUS. ERECTORS, INC., SELF-INSURED/THE BUILDERS GROUP/TBG CLAIM SERVS., Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
SEPTEMBER 15, 2010
JURISDICTION - OUT-OF-STATE EMPLOYMENT; STATUTES CONSTRUED - MINN. STAT. § 176.041, SUBD. 3. Substantial evidence does not support the arbitrator’s conclusion that the employee was “hired” in North Dakota, within the meaning of Minn. Stat. § 176.041, subd. 3, and that Minnesota lacks jurisdiction to consider the employee’s claim for benefits, where the employee, a Minnesota resident, was contacted by a project superintendent of the Minnesota employer and accepted the offer of a job in North Dakota during a telephone conversation while at home in Minnesota; a “direct call” was made by the employer to the union office notifying the union of the name call of the employee; and the employee was dispatched to the North Dakota job site from the St. Paul union hall.
Reversed and remanded.
Determined by: Johnson, C.J., Pederson, J., and Rykken, J.
Arbitrator: Larry J. Peterson
Attorneys: Stephen R. Daly, Kueppers, Kronschnabel & Daly, St. Paul, MN, for the Appellant. William G. Laak and Jeffrey R. Homuth, McCollum, Crowley, Moschet & Miller, Minneapolis, MN, for the Respondents.
THOMAS L. JOHNSON, Judge
The employee appeals the arbitrator’s determination that the employee was not “hired” by the employer in Minnesota, within the meaning of Minn. Stat. § 176.041, subd. 3, and that Minnesota lacks jurisdiction over the employee’s workers’ compensation claim. We reverse.
Douglas W. Summers, the employee, sustained an admitted personal injury on November 13, 2009, arising out of his employment with Northern Industrial Erectors, Inc., (NIE), the employer, self-insured through The Builders Group/TBG Claim Services. The employee’s injury occurred in Underwood, North Dakota, at the NIE Cold Creek Station construction site.
At the time of his hiring, the employee was a resident of Minnesota and a member of Ironworkers Union Local 512 - Region A, in the Twin Cities. NIE was apparently a party to a collective bargaining agreement with the Ironworkers Union. The agreement was not, however, placed in evidence.
Charles Witt is the business manager, financial secretary, and treasurer of Ironworkers Local 512. Mr. Witt testified that in 2004, Local 563 in Duluth, Minnesota, and Local 793 in North Dakota were merged into Local 512. The union, however, retained three regions: Region A is the original Local 512 territory, Region B is the Duluth territory, and Region C is North Dakota. Local 512 has its main office in St. Paul, Minnesota, with sub-offices in Mandan, North Dakota, and Duluth, Minnesota.
Based upon the testimony of Mr. Witt and Charlie Roberts, the business agent for Local 512 - Region A, under the collective bargaining agreement, one of the functions of the union is to provide union workers for employers who are parties to the contract. When an employer, such as NIE, needs ironworkers for a particular project, it can obtain workers by making an “open call” to the union. The employer contacts the local union office, tells the union business agent the number of workers needed, any specific job requirements, and the job location. The business agent reviews the union out-of-work list and selects those workers who possess the particular skills required by the employer and who have been out of work the longest. The business agent then contacts the selected workers. The union provides the workers with a Report to Contractor Slip containing the name of the employee, the employer, the job name, and the job location, and assigns or dispatches the selected workers to the employer’s job site. Thus, for an “open call” request by an employer, the union selects the workers sent to the job.
Following the merger of the unions, a policy was adopted in which union members in a particular region have first call on work available within that region. If there were not enough qualified union workers available in North Dakota, Larry Morris, the business agent for Local 512 - Region C, would contact Mr. Roberts in St. Paul. Mr. Roberts would then review the combined out-of-work list for union members within Regions A and B, and select those who have been out of work the longest and possess the particular skills needed by the employer.
In contrast to an “open call,” Mr. Witt testified, under the collective bargaining agreement an employer has the right to make a “direct call” for a specific named employee. To make a direct call, the employer’s representative contacts the union and tells the business agent that the employer wants to hire a specific individual. That individual then reports to the union office in his member region and receives a Report to Contractors Slip dispatching him to the contractor’s job site. The worker’s place in the union’s out-of-work list is not a consideration. In addition to the information on the slip as set forth above, the Report to Contractor Slip has a line which states: Direct Call: Yes No. In the case of a direct call, the union official would circle “Yes.” Thus, for a direct call, the employer selects the worker it wants to hire.
Mr. Roberts explained the open call and direct call procedures as follows:
A direct call is basically a call from the contractor, and it’s basically called a name call. If a contractor wants a particular ironworker or needs a particular skill that the ironworker has, [the employer] can direct call that ironworker and that brings him up, regardless of where he’s at on the out-of-work list. And the no is an open call, meaning the contractor calls for 20 ironworkers and we determine who goes. A direct call, the contractor has the right; he determines who goes there.
In early December 2008, the employee spoke with a friend who worked for NIE who told him the company had work for welders in Underwood, North Dakota. On December 14, 2008, the employee called Ron Schmidt, the project superintendent in Underwood, inquiring about employment as a welder for NIE at the Cold Creek Station project. On December 22, Mr. Schmidt made two calls to the employee at his home in Minnesota. Mr. Schmidt testified he did not recall the details of the conversations but testified he recalled discussing the employee’s qualifications for the job and testified the employee agreed to go to work for NIE at its Underwood, North Dakota, project. When asked whether he made an offer of employment to the employee over the telephone, Mr. Schmidt testified. “I said I had work for him out there. I needed welders bad, there’s no doubt about that. But I told him I’m going to have to go through the hall, which is in Mandan, [North Dakota] to get a direct call to him.” Mr. Schmidt further stated he could hire someone over the phone, “tentatively, but I’ve got to go through the union hall.” (T. 83.) When asked whether the employee agreed to go to work for NIE at the Underwood, North Dakota job site, Mr. Schmidt testified the employee stated “[h]e said he was capable of doing the job, yes,” and agreed he understood that the employee found the job and going up to Underwood to be acceptable and that the employee would do so. (T. 89.)
The employee testified that, in his telephone conversations with Mr. Schmidt in December 2008, he was told that NIE wanted to hire him because he had the wire feed welding certification the employer was looking for at its Cold Creek Station project. When asked what happened next, the employee testified:
A: Well, I asked him if - - Ron, you need to name call me out of the hall. And he says, well, I can do that, so he did.
Q: What is a name call?
A: It’s just a direct call. It takes you kind of like off the list. You can be anywhere on that list. If he direct calls you, then you pretty much go out.
* * *
Q: Is that what happened here?
Q: Did Northern Industrial name call you?
According to Mr. Schmidt’s telephone records, he called the Mandan, North Dakota, union office shortly after speaking with the employee on December 22, 2008. Mr. Schmidt testified he had no recollection of anything specific with respect to the call but testified, “I would imagine that I requested . . . I called Larry [Morris] and probably requested Doug Summers.” (T. 87.) Mr. Schmidt stated it was his practice to make calls for employees through the regional office where the project was located. He further testified that the procedure was that Mr. Morris would have then contacted the Region A office. Larry Morris had no recollection of the call but agreed he most likely passed on the call for Doug Summers to the St. Paul union hall.
On December 22, 2008, Mr. Roberts and the employee spoke by telephone regarding the direct call from NIE. On December 23, 2008, the employee went to the St. Paul, Minnesota, union office. Mr. Roberts provided a Report to Contractor Slip dispatching the employee to the Cold Creek Station project in Underwood, North Dakota, circling “yes” on the slip evidencing that it was a direct call.
The employee was told by Mr. Roberts that he needed to check in with the Mandan, North Dakota, union office, get a drug test, and obtain his OSHA 10 safety training. The OSHA 10 class was cancelled in North Dakota, so the employee remained in Minnesota for another week and took the OSHA 10 class on January 3, 2009, in St. Paul. On January 4, 2009, the employee traveled to Mandan, North Dakota, and rented a hotel room. The employee was not paid by NIE for his travel expenses. On January 5, 2009, the employee went to the Mandan union office where Mr. Morris gave the employee another Report to Contractor Slip dated January 5, 2009. The employee was referred to Preble Medical Services in Mandan where he took a drug test. He then went to the job site where he filled out a W-4 form, a new employee information form, a child support notification, and a form acknowledging the employer’s alcohol and drug testing policy, and started work that day. On November 13, 2009, the employee was injured on the job.
The employee filed a claim for workers’ compensation benefits in Minnesota and the matter proceeded to arbitration pursuant to the rules of the Union Construction Workers’ Compensation Program. By an agreement of the parties, the only issue before the arbitrator was whether the employee was hired by NIE in Minnesota pursuant to Minn. Stat. § 176.041, subd. 3. In a Findings of Fact, Conclusions of Law and Order, the arbitrator determined the offer of employment by NIE to the employee occurred when Mr. Schmidt called the Mandan, North Dakota, union office requesting a direct call for the employee; the January 5, 2008, Report to Contractor Slip issued by the Mandan, North Dakota, Local 512 constituted a conditional acceptance of employment by the employee of NIE’s offer of employment; and the employment relationship between NIE and the employee was unconditionally established on January 5, 2009, when the employee passed the drug test and executed employment documents at the North Dakota job site. Based on these legal conclusions, the arbitrator found the employee was not hired within the state of Minnesota and that Minnesota lacks jurisdiction over the employee’s workers’ compensation claim. The employee appeals.
Whether the employee’s injury in North Dakota is compensable under the Minnesota Workers’ Compensation Act depends upon whether the circumstances of the employee’s employment and injury fall within the act’s extraterritorial application statute, Minn. Stat. § 176.041. Morrisette v. Harrison Int’l Corp., 486 N.W.2d 424, 46 W.C.D. 721 (Minn. 1992). The applicable provision of that statute, subdivision 3, states:
Temporary out of state employment. If an employee hired in this state by a Minnesota employer, receives an injury while temporarily employed outside of the state, such injuries shall be subject to the provisions of this chapter.
The parties stipulated that NIE is a Minnesota employer, and that the employee sustained a personal injury while temporarily employed outside of the state of Minnesota. The sole issue before the arbitrator was whether the employee was “hired” in Minnesota by NIE within the meaning of Minn. Stat. § 176.041, subd. 3.
In his memorandum, the arbitrator stated it was undisputed the employer and the employee could not enter into an employment relationship because “[t]he employment relationship between an ironworker and an employer is controlled exclusively by the union agreement between the Ironworkers Union Local 512 and the general contractors association of which the Employer is a member.” (Mem. at 9.) The arbitrator concluded the North Dakota office of Local 512 was a necessary party to the offer of a job at the NIE construction project and to the employee’s acceptance of the offer. Accordingly, the arbitrator determined that an employment contract could not have been entered into between the employee and the employer in Minnesota in the telephone conversations on December 14 or December 22, 2008. (Mem. at 15.) We cannot agree with this conclusion.
The arbitrator may be correct in stating that NIE “did not have the power or legal authority to hire the Employee outside the terms of the union agreement.” (Mem. at 15.) Since the collective bargaining agreement itself is not in evidence, however, we cannot review the document to determine its contents. Evidence of the rights and responsibilities of the parties in the hiring process was presented solely through the testimony of witnesses at the hearing.
According to the witnesses’ testimony, in an “open call” by an employer, the union selects qualified workers from the out-of-work list maintained by the union office, conveys the employer’s offer of work to those selected, and dispatches the workers to the job site. Thus, for an open call, the union acts as the employer’s agent in the hiring process. Compare, e.g., Houle v. Stearns-Rogers Mfg. Co., 275 Minn. 345, 157 N.W.2d 362, 24 W.C.D. 485 (1968). In contrast, the witnesses testified that in a “direct call,” an applicant is identified by the employer, who determines the qualifications of the worker, elects to hire that worker, and then makes a name call to the union. Mr. Witt and Mr. Roberts testified that NIE has this right as a party to the collective bargaining agreement. In addition, Mr. Schmidt testified he had the authority to hire and fire workers for NIE at the Cold Creek Station job site.
In Morrisette, the supreme court stated that in determining whether an employment contract was formed a court need not rely on words alone, but can “consider the surrounding facts and circumstances in the context of the entire transaction, including the purpose, subject matter, and nature of it.” 486 N.W.2d at 427, 46 W.C.D. at 726 (citing McEwen v. State Farm Mut. Ins., 281 N.W.2d 843 (Minn. 1979)). A contract of employment is governed by the same rules applicable to other types of contracts, including the requirements of offer and acceptance. Smith v. Employers’ Overload Co., 314 N.W.2d 220 (Minn. 1981) (citing Houle, id.). The general rule is that a contract is deemed to be made at the place where the final assent is given. Ordinarily, to constitute an acceptance of an offer there must be an expression of the intention by word, sign, writing, or act communicated or delivered to the person making the offer or his agent. Pierce v. Foley Brothers, Inc., 283 Minn. 360, 168 N.W.2d 346, 354-55 (1969). Thus, the question is where the final assent was given by the employee to the offer of employment with NIE.
In Pierce, the supreme court adopted the rule that “an oral contract consummated over the telephone is deemed made where the offeree utters the words of acceptance.” Id. at 355, citing Travelers Ins. Co. v. Workmen’s Comp. App. Bd., 68 Cal.2d 7, 14, 64 Cal.Rptr. 440, 444, 434 P.2d 992, 996 (1967). On December 22, 2008, Mr. Schmidt called the employee at his home in Minnesota. It is clear from the testimony of both the employee and Mr. Schmidt that by that date they had agreed the employee would go to work for NIE at the Underwood, North Dakota, job site. Following that telephone conversation, Mr. Schmidt called the Mandan, North Dakota, union office to make a direct call for the employee. The arbitrator concluded NIE offered employment to the employee during this telephone call between Mr. Schmidt and Mr. Morris. We disagree.
Based upon the testimony in this case, the procedure for a direct call was that NIE notified the union of its decision to hire a specific employee by making a direct call for that employee. We cannot determine whether this notification was required under the terms of the collective bargaining agreement or whether it was simply a procedure established by the union. In any event, assuming the employee was a union member in good standing, there is no evidence the union could reject NIE’s direct call of the employee or that the union did so in this case. The evidence establishes that Mr. Schmidt had authority to hire workers for NIE at that job site, that he told the employee he had work for him at the Cold Creek Station and would make a direct call for him, and that the employee, at his home in Minnesota, agreed to go to work for NIE during the December 2008 telephone conversations with Mr. Schmidt. We believe, under these facts, there was an offer of employment and acceptance by the offeree over the telephone, sufficient to meet the requirements of a contract for hire in Minnesota.
The employee accepted NIE’s offer of employment in the December 2008 telephone conversations with Mr. Schmidt. The union procedures thereafter were only record-keeping functions having nothing to do with the formation of the employment contract. Mr. Schmidt testified the employee had to be dispatched through the union hall to work for NIE at the Underwood, North Dakota, construction site. On December 23, 2008, the employee went to the St. Paul, Minnesota, union office where he picked up a Report to Contractor Slip dispatching him to the Cold Creek Station job site. On January 5, 2009, the employee reported to Larry Morris at the Mandan, North Dakota, union office. Mr. Morris then issued another Report to Contractor Slip to the employee. The arbitrator concluded Mr. Morris’s issuance of the Report to Contractor Slip on January 5, 2009, constituted a conditional acceptance of employment by Mr. Summers to NIE’s offer of employment. Again, we disagree with the arbitrator’s conclusion.
Even assuming the employee was required to go through the union hall as a condition precedent to formation of the contract for hire - - and there is little or no evidence of such a requirement in a direct call situation - - the evidence does not support the arbitrator’s conclusion that the North Dakota office of Local 512 was a necessary party to the offer of a job at the NIE construction project and to the employee’s acceptance of the offer.
Mr. Roberts testified the employee was dispatched from the Region A office in St. Paul directly to the job site in Underwood. (T. 57-58.) Mr. Witt similarly testified that in a direct call situation, the St. Paul hall would issue a Report to Contractor Slip to the Cold Creek Station job. He stated the dispatch slip given to the employee in St. Paul was the controlling Report to Contractor Slip and the one the union would rely on for the employee’s work assignment. (T. 113-15.) “The slip that we would write from down here [St. Paul] . . . is the one that’s going to send Doug Summers to that job.” (T. 116.)
Mr. Roberts further testified that ironworkers dispatched from Region A were instructed to check in with the North Dakota sub-office as a courtesy, so they knew where their members were and so that the business agent in North Dakota knew who was in his area. “Larry, the business agent, keeps track of everybody out there, whether they’re coming in on an open call or a direct call.” (T. 56.) Mr. Roberts further explained the Report to Contractor Slip is for the ironworker and the union, “to check in with the union steward on the project and for the superintendent to make sure he’s got the right guy. It’s their traveling ticket.” (T. 72.) The slip Mr. Morris issues is “for his own records, so he knows where everyone is at.” (T. 56.) Mr. Witt also testified that a worker dispatched from St. Paul had to report to Mr. Morris’s office to confirm that the person did in fact go up to the job. The “reason its done that way is so that not only do we know who’s going up there, but Larry [Morris] would also know, as well as the contractor, which people are going to be going to work on that particular project.” (T. 112.) Mr. Morris agreed the employee had already been assigned on the St. Paul slip to a particular contractor. “The slip down there [St. Paul] was to get from the St. Paul hall to my hall for that particular job for that particular contractor. . . . He would need to come to my hall here so that I would know which contractor he was going to work for.” (T. 103.)
Based on this testimony, it appears the primary purpose of notifying the union of a direct call is administrative - - to permit the union to make a record of the employment and job location of its members. Even if we assume a dispatch from the union hall has some legal significance in terms of offer and acceptance, the offer of employment through a direct call was clearly made and accepted no later than the point at which the employee was issued a Report to Contractor Slip at the St. Paul, Minnesota, union office on December 23, 2008, dispatching him to the employer’s Cold Creek Station job site in Underwood, North Dakota. The evidence simply does not support a conclusion that reporting to the Mandan, North Dakota, union hall after that point had any significance in the hiring process; instead, it appears that going to the North Dakota union hall served solely administrative purposes.
The arbitrator concluded the employment relationship between NIE and the employee was unconditionally established on January 5, 2009, when the employee passed a drug test in Mandan, North Dakota, and executed employment documents at the Underwood, North Dakota, job site. The arbitrator concluded the hiring was not complete until these conditions had been met. The respondent argues the fact that these functions were completed in North Dakota make this case similar to and controlled by the case of Wood v. Fred Madsen Constr. Co., 49 W.C.D. 569 (W.C.C.A. 1993). We disagree.
In the Wood case, a friend, then working for the employer, told the employee the employer was looking for carpenters at a project in Grand Forks, North Dakota. The friend arranged an interview for the employee with Fred Madsen, the vice president of the employer. That interview took place in Grand Forks, North Dakota, where, after discussing his qualifications as carpenter, Mr. Madsen agreed to hire the employee. The employee sustained an injury in North Dakota and brought a claim for Minnesota workers’ compensation benefits. At the hearing, the only issue was whether the employee was hired in the state of Minnesota. In affirming the compensation judge’s denial of Minnesota jurisdiction, this court noted the record established that both parties to the employment contract, the employee and Mr. Madsen, did not consider the employee hired until his interview in North Dakota was completed. Accordingly, the hiring occurred in North Dakota and Minnesota lacked jurisdiction.
In this case, the testimony establishes that NIE’s project superintendent had authority to hire the employee; that the employee accepted in Minnesota the offer made by Mr. Schmidt by telephone; and that the employee was issued a Report to Contractor Slip at the St. Paul, Minnesota, hall dispatching him to work at the Cold Creek Station project prior to leaving the state. The only things remaining to complete were a drug test and filling out various employment documents. The papers, a W-4 form, a new employee information form, a child support notification, and a form acknowledging the employer’s alcohol and drug testing policy, are the kinds of forms and papers normally filled out by employees on their first day of work. These kinds of administrative tasks, completed after the employee reports to work, are consistent with the performance of a contract for hire already in existence.
Similarly, many construction projects require an employee drug test prior to beginning work. Larry Morris testified the drug test was done in Mandan, rather than Minnesota, because “[i]t was a lot of paperwork involved and it was easier to do up here.” (T. 100.) Mr. Schmidt testified he had the right to reject any worker who arrived at the job site smelling of alcohol, and although he did not so testify, we assume Mr. Schmidt could also reject a worker who failed the drug test. The drug test fulfilled an express or implied promise by the employee that he was fit to work for NIE, which included being drug free. Such contingencies, which may preclude a worker from assuming work duties or from retaining employment, are conditions subsequent to employment rather than conditions precedent. Compare, e.g., Sterling v. Fagen, Inc., 69 W.C.D. 459 (W.C.C.A. 2009); Houle at 368, 24 W.C.D. at 495-96.
We conclude the final assent by the employee to NIE’s offer of employment occurred in Minnesota and that Minnesota does have jurisdiction over the employee’s claim for workers’ compensation benefits. The decision of the arbitrator is, therefore, reversed. Based upon our decision reversing the arbitrator’s decision, we need not reach the issue, raised by the employee, of any alleged bias or conflict of interest of the arbitrator.
 On the Report to Contractor Slip, Mr. Roberts filled in Alberichi as the contractor name, rather than NIE. Mr. Roberts testified this was an error on his part and the employee was dispatched to the Cold Creek Station job site in Underwood, North Dakota, as specifically stated on the slip. Sometime later, Mr. Roberts testified he crossed-out Alberichi and wrote in NIE on the slip.
 The union business agents testified that NIE employees at the Cold Creek Station project were required to have certification of OSHA 10 hour safety training within the past 3 years.
 That slip reflected an open call, not a direct call by the employer. (Resp. Ex. A.) Mr. Morris testified that, at that time, he was not aware of the December 23, 2008, direct call slip from the St. Paul union hall. (T. 101-02.)
 We presume NIE was a party to a collective bargaining agreement by which NIE agreed to hire only members in good standing with Ironworkers Union Local 512 for its construction projects. In a collective bargaining agreement, the rights and obligations of parties are governed by the terms of the agreement and by the provisions of the National Labor Relations Act. We presume that under the terms of the agreement, NIE gave up its common law right to bargain for the services of an employee outside the terms of the agreement. Presumably, the collective bargaining agreement contains certain terms and conditions of employment including wage rates, benefits, and other work rules which are applicable to all union employees hired by NIE. These terms and conditions of employment would be part of any employment contract between any union member and NIE. We further presume the agreement included the two hiring processes described by the witnesses as an “open call” and a “direct call.”
 In Houle, the Minnesota supreme court addressed the place of hiring for a union worker under a collective bargaining agreement. In Houle, the employer made an open call request to the union, in accordance with the terms of a collective bargaining agreement, for workers for a construction project in South Dakota. The employee was contacted in Minnesota through the union office in Minneapolis. The supreme court applied what Larson calls the “agency theory of place of contract” and concluded the union acted as an agent of the employer in conveying the offer of work to individuals from the union out-of-work list, and that the contract of hire was entered into in Minnesota. See Larson, § 143.03[c], pp. 143-17-18. In this case, unlike Houle, the employee was not part of an open call made through the union hall.