Violating wage and hour law can be a defense  to paying workers’ compensation – at least in Oregon. That wasn’t the formal holding of a recent Oregon Supreme Court decision involving a truck driver hurt during a driving test, but it’s the practical effect of the decision.

Thomas Robinson summarizes almost every state appellate court decision on workers’ compensation on his blog. A few weeks he posted: “Oregon Supreme Court: Minimum Wage Law May Not Be Used to Determine Claimant’s Status as Worker.”

My first reaction was, “Not a big deal. There are different standards, even within states, about coverage for wage and hour laws and workers’ compensation laws.”

But then I read the post.

In the Oregon case, a professional driver was making a delivery for the company as part of a mandatory driving test. The delivery benefited the company, but the test drive was unpaid. The employee injured himself unhooking the trailer. He wasn’t hired by the company.

The question in the Oregon case was whether the worker was an employee for the purposes of workers’ compensation. More precisely the question was whether there was a contract of hire. The trial court decided that since for purposes of Oregon’s minimum wage law the employee should have been paid for the driving test, that there was an implied contract for the purposes of workers compensation. But the Oregon Supreme Court found that didn’t matter for the purposes of workers’ compensation because they couldn’t establish the existence of a contract of hire because they employee knew he was not going to get paid for the driving test, so there was not an expectation of payment, so there was no contract for hire.

This decision is terrible for many reasons. First of all, new employees are more vulnerable to injury. Truckers are also at higher risk for injury. Finally, the decision seems to tell employers that in some circumstances violating wage laws is a defense to a workers’ compensation claim.

Maybe a driving test is a close issue when it comes to wage and hour law. But I represented   one former employee in a wage and hour case who worked for several weeks without being paid. If that person had hurt themselves at work, under the reasoning of the Oregon decision, that person would not have received workers’ compensation benefits.

Employers have a strong economic incentive to violate wage laws for driving tests. In this case the employers’ potential damages under wage and hour law would be minimal – even with liquidated damages and attorney fees. That’s assuming an employee would even bring a charge. A workers’ compensation claim could cost an employer  tens of thousands of dollars in medical bills alone.

As a plaintiff’s lawyer I clearly don’t like the outcome of this decision. But some on the defense/insurance side might say that it is up to the legislative branch to fix a bad decision. Maybe, but  it’s a canon of legal interpretation that statues of covering similar areas need to construed in harmony with each other.

The precise term for this concept is in pari materia. Workers’ compensation and wage laws both regulate working conditions and the relationship between employee and employer. They should be construed together to effectuate the purpose s of each act. Holding that violating wage and hour laws can be a defense to paying workers’ compensation seems to inconsistently interpret those two laws. In pari materia is particularly important when dealing with overlap between workers’ compensation and wage and hour issues as these laws were enacted at different times.

In Nebraska, workers’ compensation laws are supposed to be liberally construed to effectuate the beneficent purpose of the act. Put another way, in a close legal case about coverage of the act, a court should find a worker to be covered. In Nebraska, contractual interpretation is a question of law. So again, in a close legal question about the existence of a contract of hire, the law should be interpreted in favor of the worker in finding the  existence of a contract of hire.

Despite all of the legal thumbs on the scale for an employee on the issue of employment in a workers’ compensation case, I am not sure how a Nebraska court would rule in a case involving an injury during an unpaid driving test. Nebraska courts have previously held than an employee injured during a pre-employment physical examination after a conditional offer of employment was not covered by workers’ compensation. The pre-employment physical exam injury case seemed  to rely on the proposition of law that a clear contractual relationship must exist before the workers’ compensation act is applicable.