State News : North Carolina

NWCDN is a network of law firms dedicated to protecting employers in workers’ compensation claims.

NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.  

Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.

Contact information for NWCDN members is also located on the state specific links in the event you have additional questions or your company is seeking a workers’ compensation lawyer in your state.

North Carolina



Written by: Bruce Hamilton

Wanda Blanche Taylor and Adrian A. Phillips appointed to the Full Commission by Gov. Cooper

Wanda Taylor has been appointed by Gov. Cooper to the Full Commission. If confirmed by the General Assembly, Attorney Taylor will replace Commissioner Charlton Allen, who has stayed on following the expiration of his term on June 30, 2020. Attorney Taylor is a Fellow of the College of Workers’ Compensation Lawyers. She received her JD degree from UNC-Chapel Hill and her undergraduate degree from Duke University. She is currently the Director of Litigation/Counsel at Key Risk Insurance. Previously, attorney Taylor served as a Deputy Commissioner and Chief Deputy Commissioner at the Industrial Commission for 20 years. Ms. Taylor’s appointment is subject to approval/confirmation by the North Carolina Gen. Assembly.

Adrian Phillips has been appointed by Gov. Cooper to the Full Commission to fill the slot currently held by Commissioner Loutit, whose term is set to expire April 30, 2021. Attorney Phillips has served as a Deputy Commissioner at the Industrial Commission since 2002. Before joining the IC, attorney Phillips worked as an assistant attorney general in the tort claim section of the North Carolina Department of Justice. Prior to that, Ms. Phillips prosecuted Medicaid fraud cases for the North Carolina Department of Justice and served as an assistant district attorney and Caswell and Person Counties. Attorney Phillips received her JD from North Carolina Central University school of Law and her undergraduate degree at Bennett College. Ms. Phillips’ appointment is also subject to confirmation by the North Carolina Gen. Assembly.


Celeste Harris Appointed to Serve as Deputy Commissioner

Celeste Harris has been appointed as a Deputy Commissioner. Attorney Harris has been in private practice for 30 years representing injured workers and workers compensation matters and individuals in personal injury and Social Security disability matters. She is a North Carolina state board certified Specialist in Worker’s Compensation Law and a North Carolina certified mediator. She earned her law degree from St. Louis University of school of Law, attending Wake Forest University school of Law during her third year. Ms. Harris will be assigned to the Winston-Salem regional office of the IC.


Notice to All Carriers, Third-Party Administrators, and Self-Insured Employers: New Requirement to Provide Commission with Email Address for Claim-Related Documents

Effective March 1, 2021, all carriers, third-party administrators, and self-insured employers are required to provide the Commission with an email address for receipt of claim-related documents. The designated email address shall be provided to the Commission at  . The email address provided will be used in cases where the Commission does not have an individual email address for the claims representative assigned to the claim. Providing an email address is mandatory and will ensure timely receipt of claim-related documents. See Rule 11 NCAC 23A .0109 (d).


Bruce Hamilton is a Partner in Teague Campbell’s Raleigh office. He is the legal advisor for the NCASI and, for the past 30 years, his practice has focused exclusively on workers’ compensation defense.

Written by: Tracey Jones

In the course of handling a workers’ compensation case, an adjuster will have to communicate with the employee’s treating physician to collect valuable medical information relevant to the diagnosis and ability to return to work. As noted in N.C.G.S § 97-25.6(c)(2), Written Communications with Healthcare Providers:

Defendants may communicate with the Plaintiff’s authorized health care provider in writing, without the express authorization of Plaintiff, to obtain certain relevant medical information not available in Plaintiff’s medical records, provided Defendants provide Plaintiff with contemporaneous written notice.

Without express authorization by the employee, but with contemporaneous written notice – Defendants may request the following additional information not available in the employee’s medical records:

  • The diagnosis of Plaintiff’s condition;
  • The appropriate course of treatment;
  • The anticipated time that Plaintiff will be out of work;
  • The relationship, if any, of Plaintiff’s condition to the employment;
  • Work restrictions from the condition, including whether Plaintiff may return to work with the employer as provided in attached job description (New provision enacted 7/1/12 provides clarity that Defendants may forward job description to physician);
  • The kind of work for which Plaintiff may be eligible; and
  • Any permanent impairment as a result of the condition.

Defendants must provide Plaintiff a copy of the healthcare provider’s response within ten business days of receipt.

When communicating with healthcare providers, NC adjusters and Defendants can use the following examples as a guide:

  • Communications on Diagnosis: In situations where you are trying to differentiate between a shoulder injury or back injury; or if you are trying to determine if Plaintiff has an enumerated occupational disease; or if the doctor is just not being clear about the diagnosis in his note – you can ask the question bluntly in correspondence.
  • Communications about Return to Work: Useful when you require information for when Plaintiff may be able to return to some form of light duty work.  You no longer have to serve the form MSQ on which too much information may be placed.
  • Communications regarding causation: You may now reference facts listed in Plaintiff’s records that might indicate lack of causal relationship and then inquire about opinion.
  • Communications regarding appropriate care:
    • Why are you recommending X treatment?

It is critical to keep in mind that all correspondence with the treating physician must be shared with the employee. All correspondence must occur with an authorized healthcare provider.

If you have questions on corresponding with medical providers or other workers’ compensation questions, reach out to Teague Campbell’s skilled team of workers’ compensation attorneys.

Written By: Elizabeth Ligon

The day is finally here and your case is settled. But is it really over? Let’s go over some key issues in regards to mutual consent in settlement agreements and make sure.

First things first, a settlement agreement is a contract, to be interpreted and tested by established rules relating to contracts. A valid contract exists only where there has been a “meeting of the minds” as to all the essential terms of the agreement.   Material terms generally means anything essential to the bargain, such as amount of settlement.  The fact that a few secondary issues remain to be resolved will not defeat enforcement.   If a court finds the material terms of a contract are overly vague or not definitive enough to provide a basis for mutual consent, it will not enforce the agreement.

Often times a court will find no mutual consent where a settlement agreement includes a provision that a release will be drafted later.  Disagreements as to the terms of the release have caused many settlement agreements to fail.  Similarly, where parties provide in the settlement agreement that the release to be delivered later is to be “mutually agreeable to both parties”, courts have refused enforcement of the entire agreement because there was no meeting of the minds on that material term.

Keeping that in mind, North Carolina courts will not recognize lack of mutual consent when a party claims that it had not signed the agreement, and that the signature of his attorney was not authorized. North Carolina courts presume that an attorney acts under the authority and in favor of the client, even in settlement circumstances. One who challenges the actions of his attorney has the burden of rebutting the presumption and proving lack of authority.

Ensuring that mutual consent occurs and that all settlement terms are well documented is critical, but that is only part of the settlement agreement process.

Written By John Tomei 

When the actions of an insured give rise to the need for a carrier to cancel a workers’ compensation policy, it is vitally important for the carrier to be aware of how to effectively cancel the policy under North Carolina law. The North Carolina Supreme Court has long established the principle that failure to comply with statutory requirements for cancelling an insurance policy renders the cancellation ineffective. Pearson v. Nationwide Mutual Ins. Co., 325 N.C. 246, 382 S.E.2d 745 (1989). Compliance with statutory requirements may seem straightforward but there are a few common pitfalls that prevent effective cancellation and create liability.

Cancellations of workers’ compensation insurance policies in North Carolina are governed by N.C.G.S. § 58-36-105, “Certain Workers’ Compensation Insurance Policy Cancellations Prohibited” (hereinafter the “Statute”). It is critical for an insurance carrier to be aware of the governing statute and the correct processes to effectively cancel a workers’ compensation insurance policy in North Carolina.

Provisions of the Statute

The Statute states:

(a)  No policy of workers’ compensation insurance or employers’ liability insurance written in connection with a policy of workers’ compensation insurance shall be cancelled by the insurer before the expiration of the term or anniversary date stated in the policy and without the prior written consent of the insured, except for any one of the following reasons:

 (1) Nonpayment of premium in accordance with the policy terms;

(2) An act or omission by the insured or his representative that constitutes material misrepresentation or nondisclosure of a material fact in obtaining the policy, continuing the policy, or presenting a claim under the policy;

(3) Increased hazard or material change in the risk assumed that could not have been reasonably contemplated by the parties at the time of assumption of the risk;

(4) Substantial breach of contractual duties, conditions, or warranties that materially affects the insurability of the risk;

(5) A fraudulent act against the company by the insured or his representative that materially affects the insurability of the risk;

(6) Willful failure by the insured or his representative to institute reasonable loss control measures that materially affect the insurability of the risk after written notice by the insurer;

(7) Loss of facultative reinsurance, or loss of or substantial changes in applicable reinsurance as provided in G.S. 58-41-30;

(8) Conviction of the insured of a crime arising out of acts that materially affect the insurability of the risk;

(9) A determination by the Commissioner that the continuation of the policy would place the insurer in violation of the laws of this State; or

(10) The named insured fails to meet the requirements contained in the corporate charter, articles of incorporation, or bylaws of the insurer, when the insurer is a company organized for the sole purpose of providing members of an organization with insurance coverage in this State.

(b)  Any cancellation permitted by subsection (a) of this section is not effective unless written notice of cancellation has been given to the insured not less than 15 days before the proposed effective date of cancellation. The notice may be given by registered or certified mail, return receipt requested, to the insured and any other person designated in the policy to receive notice of cancellation at their addresses shown in the policy or, if not indicated in the policy, at their last known addresses. The notice shall state the precise reason for cancellation. Whenever notice of intention to cancel is given by registered or certified mail, no cancellation by the insurer shall be effective unless and until such method is employed and completed. Notice of intent to cancel given by registered or certified mail shall be conclusively presumed completed three days after the notice is sent if, on the same day that the notice is sent by registered or certified mail, the insurer also provides notice by first-class mail and by electronic means if available as defined in G.S. 58-2-255(a) to the insured and any other person designated in the policy to receive notice. Any such supplemental notice given by electronic means shall be effective for the limited purpose of establishing this conclusive presumption. Notice of cancellation, termination, or nonrenewal may also be given by any method permitted for service of process pursuant to Rule 4 of the North Carolina Rules of Civil Procedure. Failure to send this notice, as provided in this section, to any other person designated in the policy to receive notice of cancellation invalidates the cancellation only as to that other person’s interest.

(c) This section does not apply to any policy that has been in effect for fewer than 60 days and is not a renewal of a policy. That policy may be cancelled for any reason by giving at least 30 days prior written notice of and reasons for cancellation to the insured by registered or certified mail, return receipt requested.

(d) Cancellation for nonpayment of premium is not effective if the amount due is paid before the effective date set forth in the notice of cancellation.

(e) Copies of the notice required by this section shall also be sent to the agent or broker of record though failure to send copies of the notice to those persons shall not invalidate the cancellation. Mailing copies of the notice by regular first-class mail to the agent or broker of record satisfies the requirements of this subsection.

Complying with Sections (a) and (b) to Reduce Risk of Improper Cancellation of Workers’ Compensation Insurance Policies

The central requirements of the Statute are that the insured be notified in writing of the precise reason for the cancellation of the policy and that the insured be given the required notice of such cancellation.

Some of the more common reasons for canceling a workers’ compensation policy include: failure to pay premiums, failure to submit to audits pursuant to the policy provisions, or other failures by the insured to otherwise cooperate with the carrier in providing coverage.

    • Nonpayment of a premium is covered under section (1).
    • Misrepresenting the nature of the insured’s business, and the risks connected with it, would come under section (2).
    • If the insured changes the nature of its business, thereby increasing the risk of an employee’s injury, such behavior would come under section (3).
    • Failing to submit to an audit would likely be deemed a substantial breach of contractual duties or conditions under the policy, which would be covered under section (4). Any form of fraud would be covered by section (5).
    • Behavior that would be covered by sections (6) and (7) are less common.
    • Clearly, if an insured commits a crime that impacts the insurability of the risk, that would be covered under section (8).
    • If the Department of Insurance determines that continuation of the policy would cause the carrier to violate the laws of the state of North Carolina, this would implicate section (9).
    • Finally, if the insured somehow violates its corporate charter, articles of incorporation or its bylaws, this conduct could give rise to cancellation of a policy where the carrier is a self-insurance pool or other similar organization, under section (10).

As mentioned above, when canceling a policy, it is critical for the carrier to state the precise reason, in writing, in its notice for the cancellation of the policy. Ideally, a citation to the particular section of the Statute, or at least tracking its language, would be best, since it would help to build a stronger case for effective cancellation in the event of litigation.

The Statute clearly sets out the manner by which the insured must be given notice of the cancellation of the policy. Specifically, the notice is not effective unless it is in writing and it is “given” to the insured, not less than 15 days before the proposed effective date of cancellation. Again, the written notice must be consistent with one or more of the 10 bases of cancellation as allowed under the Statute. Note that the Statute has no explicit requirement that the insured actually “receive” the notice of cancellation. Rather, the Statute clearly sets out the means by which the giving of the notice is rendered effective and how it can be proven as such. More specifically, the Statute provides that cancellation of a policy is effective once the mailing requirement is “employed and completed.” So, if the carrier can show its use and completion of the registered or certified mail and its return receipt process, such use is a showing of effective cancellation of a policy.

Importantly for a carrier, the Statute provides for a conclusive presumption of completion of the registered or certified mailing of notice of a cancellation of a policy, three days after the notice is sent. Specifically, on the same day that the notice is sent by registered or certified mail, if the insurer also provides notice by first-class mail and by electronic means if available (as defined in G.S. 58-2-255(a), which concerns and allows for electronic insurance communications and records) to the insured, this conclusive presumption applies. So, to enjoy this conclusive presumption, the best practice is for a carrier to (1) use the required registered or certified mail return receipt process and, (2) use the first class mail and electronic means of communications as allowed in the Statute for electronic insurance communications and records.

Complying with Section (c) Notice Requirements for Effective Cancellation

It is important to be aware that section (c) of the Statute has significantly different notice requirement for cancellation of those workers’ compensation insurance policies that have been in effect for less than 60 days and are not a renewal of a policy. More specifically, those policies may be canceled for any reason, and not just those set out in section (a)’s subsections (1) through (10), simply by giving the insured at least 30 days prior written notice of the reason for the cancellation.

In a homeowners insurance policy case which involved N.C.G.S. § 58-41-15, in Ha v. Nationwide Insurance Co., the Court held that an insured’s actual receipt of notice of the cancellation is necessary in these section (c) policy cancellations. In that statute, under its section (c), a carrier is required to “furnish” an insured with the notice of cancellation, rather than “giving” such notice to an insured in the workers’ compensation statute.

Keeping this in mind, it is not clear whether Ha would apply to a N.C.G.S. § 58-36-105 (c) cancellation of a workers’ compensation policy. In this writer’s opinion, the holding in Ha would very likely be found applicable to workers’ compensation policies. This is because of the very similar structure, language and provisions of each of the two statutes.

With all of this in mind, section (c) provides for the same registered or certified mail, return receipt requested process for giving an insured notice of a policy’s cancellation, as does section (b). However, it must be noted that section (c) does not provide for the conclusive presumption of completion of the registered and certified mailing of notice of a cancellation of a policy, as provided in section (b). So, in section (c), a carrier can only use and complete registered or certified mail and its return receipt process, to prove that an insured actually received the notice of cancellation of the policy to effectively cancel it under section (c)’s circumstances.

Additional Items to Consider When Canceling a Policy, Sections (d) and (e)

If a policy is canceled for nonpayment of premium, section (d) of the Statute provides that such cancellation is not effective if the amount due is paid before the effective date set forth in the notice of cancellation.

Finally, in section (e) of the Statute, it is required that copies of the notice required by the Statute be sent to the agent or broker of record. However, there is no sanction of invalidating the cancellation if copies of those notices are not sent to such persons. Nonetheless, it is the best practice to copy such persons, as that may serve to aid in proving that the notice of cancellation was also given to the insured.

Final Thoughts for Insurance Carriers Keep In Mind

The foremost considerations in effectively canceling a North Carolina workers’ compensation policy are 1.) N.C.G.S. § 58-36-105’s requirements that the precise reason be stated in writing, and 2.) that the notice be given consistent with both the 15-day timing, as well as the mailing requirements.

Have questions? Reach out to Teague Campbell’s John Tomei who can aid insurance carriers in the effective cancellation of policies when the actions of their insureds dictate the need for such cancellations.

The Industrial Commission recently passed a number of rule changes which were scheduled to go into effect on two different dates.The first set of rule changes went into effect on December 1, 2020.

The rules that went into effect on December 1 included changing the medical charge threshold from $2,000 to $4,000 to dictate when employers need to file the first report of injury, or Form 19. There were also changes made concerning claims for death benefits, which allow the parties to either submit a Form 30 Agreement for Compensation for Death, or a proposed Opinion and Award. Another change provided that payment for a permanent disability will not be approved if claimant has returned to work with the defendant-employer and has permanent work restrictions, unless a job description is also provided as part of the filing. Finally, the last change was to the Form 90 Report of Earnings and dictates that form can only be served when defendants are paying ongoing temporary total disability or temporary partial disability benefits, and Defendants are now able to serve the Form 90 via e-mail, facsimile, certified mail, or any other method that provides proof of receipt.

The next set of changes go into effect on March 1, 2021.

Some of the rule changes provide updates to filing requirements. Specifically, these changes show that the Commission is working to make full use of the Electronic Document Filing Portal (“EDFP”). A number of documents that were previously exempt from EDFP filing, like the Notice of Appeal to the Court of Appeals, can now be filed via EDFP. These rule changes were delayed to an effective date of March 1, 2021, to coordinate with the rollout of the Commission’s new case management system. The new system was released in early 2021. Rule 11 NCAC 23A.0109 has now been updated to reflect changes in the contact information required to be provided to the Commission by the parties. This rule has been amended to streamline the provision of contact information by the parties, to make it easier for the Commission to reach the parties if necessary. Specifically, updated contact information can be provided via EDFP, or by email

A change was made to 11 NCAC 23G .0104 to change the “physical attendance” requirements to remote requirements. "Attendance" is now defined as in-person whenever the mediation rules approved by the North Carolina Supreme Court require it. The rule now allows for the in-person requirement to be excused or modified by agreement of the parties. Further, the attendance requirement will be met with remote technology when the mediation rules approved by the North Carolina Supreme Court require attendance via remote technology. The rule also provides that all parties shall comply with public health and safety requirements in effect at such time of the mediation. This rule was revised in light of the ongoing COVID-19 crisis, and the ongoing need to have mediations via Zoom or WebEx.

Moving forward, we encourage our clients to be aware of these rules, particularly those concerning ongoing changes regarding the COVID-19 pandemic, which change often. To view an annotated copy of the rules effective March 1, 2021,click here.

If you have any questions in regards to the rule changes, feel free to reach out to a member of our workers’ compensation team.

Industrial Commission Policy Update on In-Person Hearings, Mediations, and Other Procedural Directives.

The North Carolina Industrial Commission has adopted an Emergency Rule that in turn allows the Industrial Commission to implement Emergency Orders and Directives of the Chief Justice of the North Carolina Supreme Court. In short, the Industrial Commission wants its operating structure to be in sync with, and operate consistently with, the civil system when it comes to holding hearings, mediations and other procedural directives from the Chief Justice. As of January 14, 2021, and consistent with the January 14, 2021 Order of the Chief Justice of the Supreme Court of North Carolina, all Industrial Commission mediations are to be conducted remotely, unless all parties and persons required to attend the mediation, including the mediator, agree to conduct the mediation in-person, or unless the Industrial Commission orders that the mediation be conducted in-person. Additionally, all Deputy Commissioner Hearings shall be conducted remotely via WebEx video conference, unless the Deputy Commissioner grants an in-person hearing upon a showing of good cause as to why an in-person hearing should be allowed. Full Commission hearings shall continue to be conducted via Microsoft Teams video conference.


Industrial Commission Appoints New Chief Deputy Commissioner and Deputy Commissioner

In November, 2020, Deputy Commissioner Tammy Nance was designated as the Chief Deputy Commissioner by Chair Phillip Baddour. Chief Deputy Commissioner Nance previously served as a Deputy Commissioner from 1987 to 1995. She was in private practice for several years representing both employers and employees in workers’ compensation matters and in 2011, returned to the Commission and served on the Full Commission until 2018. In 2019, Ms. Nance began serving as a Deputy Commissioner assigned to head up the Claims Administration Section.

Additionally, former representative Larry D. Hall, who most recently was serving as the Secretary of the North Carolina Department of Military and Veterans Affairs, was recently appointed as a Deputy Commissioner. Deputy Commissioner Hall represented Durham County in the North Carolina House of Representatives for 10 years and served as the House Minority Leader during his final four years.


Updates from Annual Industrial Commission’s Workers’ Compensation Educational Conference

Chair Philip Baddour provided an update at the North Carolina educational conference in October 2020. As of August 31, 2020, 1,508 Form 19’s had been filed listing COVID-19 and 119 Form 18’s have been filed listing COVID-19. Of the COVID-19 cases where a Form 60, 61 or 63 had been filed, 57% had been denied on a Form 61, 19% had been accepted on a Form 60, 18% had been paid without prejudice on a Form 63, section 1, and 6% had been paid without prejudice on a Form 63, section 2.

In addition, for the fiscal year 2019-2020, 27 claims had been filed for extended benefits under G. S. Section 97-29 (c). Seven of the claims had been mediated and three Deputy Commissioner Hearings had been held, but, as of the October conference, there had not yet been any decisions rendered.

NCIC Rule Changes Effective December 1, 2020.

Finally, seven Industrial Commission Rules were revised, and one new Industrial Commission Rule was added, all effective December 1, 2020.

Rules Effective 12-1-20.pdf (

Overview of December 1, 2020, NCIC Rule Changes

The Rules affected were 11 NCAC 23A .0104, .0408, .0409, .0501, .0903, 11 NCAC 23E .0104, and 11NCAC 23L .0103 and new Rule 11NCAC 23B .0106.

Related Post: Overview of December 1, 2020 NCIC Rule Changes by Attorney Lindsay Underwood

Amendments to Rules 11 NCAC 23A .0108, .0109, .0302, 11 NCAC 23B .0104, .0105, 11 NCAC 23L .0101, .0102, .0103, and .0105 will also become effective March 1, 2021.

Rules Effective 3-1-21.pdf (

Bruce Hamilton is a Partner in Teague Campbell’s Raleigh office. He is the legal advisor for the NCASI and, for the past 30 years, his practice has focused exclusively on workers’ compensation defense.

Written by: Melissa P. Woodard and Tracey Jones

The current state of the law in North Carolina Workers’ Compensation in latent occupational disease claims is in flux right now. Considering current case law, there are often three options for calculating a plaintiff’s average weekly wage, and neither the plaintiffs’ bar nor the defense bar can be certain about how the Industrial Commission will rule.


The primary reason this issue remains unsettled is that these kinds of cases, namely asbestosis, byssinosis and silicosis claims, are not often tried. There are always multiple defendants and they require extensive expert testimony resulting in astronomical litigation costs for both sides. Attorneys are forced to address the average weekly wage issue at mediation and come to a compromise that does not always adhere to how the respective side would like to interpret N.C.G.S. § 97-2(5).

Under N.C.G.S. § 97-2(5), there are five methods of calculating the average weekly wage.

The first three apply when the plaintiff worked at the employer in the 52 months prior to diagnosis of the alleged occupational disease. Since asbestosis, byssinosis and silicosis typically do not manifest for many years after exposure and because last injurious exposure may be separated by subsequent employers or decades, these methods for calculating the average weekly wage are arguably inapplicable. Most often, the fifth method, which is essentially a catch-all, “whatever is most fair,” approach is used. This is where the three different approaches can be utilized.

The three approaches for determining “whatever is most fair” include:

      1. The last full year of wages;
      2. The last year of wages listed on the Social Security Earnings Report; or
      3. Wages earned in the 52 weeks prior to the diagnosis.

Last Full Year

The plaintiffs’ bar generally argues that the average weekly wage should be based on the last full year of wages the plaintiff earned regardless of any other circumstances. This argument may be considered “fair” under the Court of Appeals’ holdings in Lipe v. Star Davis Co. Inc. and Abernathy v. Sandoz Chemicals, which state that the average weekly wage should be based on the wages earned while working, not the actual wages earned when the employee died or was diagnosed.  237 N.C. App. 124, 767 S.E.2d 539 (2014); 151 N.C. App 252, 565 S.E.2d 218 (2002). In both cases, the plaintiff was diagnosed with an alleged occupational disease, but had retired years earlier. The Court held that he average weekly wage was based on the last years they worked, not zero, because using their actual earnings was “obviously unfair.”  Id.

As an illustrative example, we will use Joe Smith, who worked for 30 years and retired in June 2008:

Based on his Social Security Earnings Report, Joe earned $52,000 in 2007, which was his last full year of employment, and $26,000 in 2008, where he worked less than 52 weeks.  Joe did not have any reported wages since 2008. In 2019, Joe was diagnosed with asbestosis and has timely filed his claim. Using this approach, Joe’s average weekly wage would be $1,000 based on the 2007 wages since it was his last full year of wages.

Last Year of Wages

In 2018, the Court of Appeals decided Penegar v. United Parcel Service, which holds that the average weekly wage can be based on post-retirement wages from another employer and need not be based solely on earnings from the last injurious employer, nor does it have to be solely based on full time wages. 259 N.C. App. 308, 815 S.E.2d 391 (2018).

In Penegar, the employee retired from UPS and then earned post-retirement wages with Union County in the amount of $4,272.92, resulting in an average weekly wage of $82.17. Id. The plaintiff argued the wages should be based on those from the last injurious employer, but the Court held the post-retirement wages were indicative of his actual earnings in the years prior to his diagnosis. Namely, the Court quoted N.C.G.S. § 97‑2(5), and emphasized that the average weekly wage should reflect what the plaintiff would have earned, not what he could have earned. In 2019, the Supreme Court of North Carolina denied a petition for discretionary review the plaintiff filed, essentially, but not overtly, affirming the holding.

Obviously, this seems to conflict with Abernathy and Lipe, but there is an argument that one can read the cases together without Penegar abrogating the prior case law. Under this argument, the average weekly wage should be based on the last year of wages, regardless of whether it was a full year. This is supported by the fact that either extrapolating 52 weeks of earnings from a partial year or using a previous year when the most recent earnings are not a full 52 weeks is based on the other statutory methods under N.C.G.S. § 97-2(5), not the fifth method, and the Penegar court clearly used the fifth method.

Using this approach and utilizing our Joe Smith example again, the average weekly wage would be $500.00 based on plaintiff’s 2008 part-time wages.

There is a caveat to this argument of which one should be aware, however. If, in our example, Joe worked for the same employer in 2007 and 2008, then there is a very good argument that one would have to use the 2007 wages under the other prongs of N.C.G.S. § 97-2. However, if Joe went to work for another employer in 2008 and worked part-time, then the 2008 wages could be used under the Penegar analysis.

Wages Earned in the 52 Weeks Prior to Diagnosis

Finally, the most defense-oriented argument would be that Penegar has abrogated prior case law on this issue based on the strict statutory interpretation the Court of Appeals employed: the average weekly wage “should ‘most nearly approximate the amount which the injured employee would be earning were it not for the injury[,]’ not what the injured employee could be earning.” 259 N.C. App. 308, 815 S.E.2d 391 (2018) (quoting N.C.G.S. § 97-2(5)).

Taken literally, if the employee has retired and has earned no wages in the 52 weeks prior to the diagnosis, his average weekly wage is $0.00 because he was not earning any wages. Based on this argument, it is a misapplication of the law to use wages prior to the most recent year because they show what the plaintiff could be earning, which is in direct contradiction to the Court’s holding in Penegar and the clear language in N.C.G.S. § 97-2(5).

Returning again to our plaintiff, Joe Smith:

Joe’s average weekly wage would be $0.00, resulting in the minimum compensation rate of $30.00 because he retired in 2008 and has not earned any wages at all for more than 10 years prior to his diagnosis.

These discrepancies in average weekly wage calculations create huge gaps in exposure for the defense. Assuming 500 weeks of indemnity entitlement, Joe Smith could recover up to $333,335.00 under the first argument, last full year wages, and up to $166,666.00 under the second argument, last year of wages. Under the third argument, Joe would be entitled to the minimum compensation rate, which would result in indemnity exposure of $15,000.00.

Based on our example with plaintiff Joe Smith, the difference in exposure only increases with higher wage earners. The Industrial Commission has yet to apply the Court of Appeals’ holding in Penegar to an occupational disease claim like Joe Smith’s diagnosis of asbestosis, and many attorneys and adjusters alike wait in anticipation to see how the law will be applied.

If you have questions or wish to discuss this further, please contact one of our workers’ compensation attorneys.

Written by: Bruce Hamilton and Tracey Jones

Brief overview of the legal analysis of COVID-19 workers’ compensation exposure in North Carolina.

COVID-19 cases must be handled and analyzed on a case-by-case basis; however, based upon the current statute and case law, it is unlikely that suspected COVID-19 or actual COVID-19 cases would be considered compensable under either an injury by accident or occupational disease claim theory in North Carolina. With respect to occupational disease claims, North Carolina is an increased risk state, not a positional risk state. Even if the employee can show some increased risk, they will need to prove that any disease they contract actually came from their employment as opposed to some other type of exposure outside of their employment. Because the legal analysis behind the compensability of a COVID-19 diagnosis is very fact specific, please contact one of our attorneys to discuss your scenario in more detail.

How an increase in teleworking may affect workers’ compensation claims in North Carolina.

COVID-19 has reached North Carolina and is impacting our way of living and working every day. Many employers are relying on teleworking to keep their businesses up and running. With this change in location of work space, we are likely to see an increase in home-related injuries. Employees are allowed to work from home; however, they do not have 24/7 workers’ compensation coverage the entire time they are at home. While many will be teleworking, they will also be engaging in personal activities during this unusual period of time. It is going to be very difficult to contradict the employee’s account of when an injury occurred due to the very nature of teleworking.

How do we know the claimant was actually engaging in work at the time of an injury?

Any injuries at home will have to arise out of and in the course and scope of the employment. There is little case law in North Carolina dealing with injuries suffered by employees working remotely; however, these claims are no different from other claims in the level of proof required to establish a compensable injury by accident. Nonetheless, these claims will pose unique challenges for defendants when investigating the facts surrounding these alleged injuries. Defendants will need to thoroughly investigate the allegations and utilize recorded statements as quickly as possible before the employee retains representation. Questions should focus on the injured employee’s activities at the time of the injury, as well as the normal routine they have developed while working remotely.

An employee who is teleworking will still need to prove:

  1. An accident. Was there an interruption of the normal work routine?
    • Were they doing their normal job duties? Were they doing the job in their normal way and, other than the injury, did anything unusual occur?
    • Additional questions will need to be asked about the other activities they engage in while working remotely. What was their normal schedule and what other personal obligations did they have while working remotely? Who else was in the remote location and where were they located in the remote location?
  2. Arising out of the employment. The accident has to have some causal connection to the employment. One area of inquiry is whether the employee has a dedicated work space at their remote location. If the injury does not occur in the work space, then additional questions need to be asked regarding the specific activity being conducted at the time of the injury.
  3. In the course of employment. This prong looks at time, place and circumstance of the injury. By having employees work remotely, employers have shifted the location of the employee’s work space, most likely to their home. We do not believe they would be considered traveling employees, which provides a much greater scope of coverage for course of employment issues. Nonetheless, other questions arise such as: When does employment begin? Normally, an employee is deemed to be in the course of their employment as soon as they are on the employer’s premises. This is the “premises exception” to the coming and going rule. When does a remote employee’s day start and end for workers’ compensation purposes? Employers might want to consider establishing general work hours for employees who are teleworking. These are extraordinary times, so some flexibility is required, but general parameters on work hours is appropriate.

Practice Tips:

  • Employers should set specific work hours for employees who are teleworking and have a system for checking in and out.
  • Adjusters should conduct recorded statements of any reported injuries at home as early as possible and get as much information as possible, including additional information regarding the employee’s usual activities and schedule during this unusual period of time when they are teleworking.
    • How did they set up their home office, what was their schedule on a typical day, did they engage in any other personal activities while working from home etc.?
  • Carriers should review claims carefully and liberally use the Form 63 procedure for payment of medical bills without prejudice or use the Form 61 procedure when information is insufficient to accept or deny the claim.

During this time of uncertainty, our team is here for you. Please contact one of our workers’ compensation attorneys if you have any questions or concerns.

By: Bruce Hamilton

By: Tracey Jones and Melissa Woodard

There are two categories of workers’ compensation claims: injury by accident and occupational disease claims.  Occupational diseases are contracted over time based on the nature of the employee’s job.  Some of the most common examples are hearing loss, respiratory diseases from alleged exposure to harmful chemicals or dust, and carpal tunnel syndrome.

North Carolina has two types of occupational diseases: those enumerated, or specifically listed, in N.C.G.S. § 97-53 and those that fall into the catch-all provision of that statute.  The plaintiff must prove different criteria than when he or she alleges an injury by accident.  If an employee alleges an enumerated occupational disease, he must prove exposure to the harmful agent and causation.  Occupational diseases that fall under § 97-53(13), the catch-all provision, require proof of an additional element, increased risk.  The plaintiff must prove that the nature of his job put him at a risk greater than the general public of contracting the alleged occupational disease.  Briggs v. Debbie’s Staffing, Inc., 812 S.E.2d 706 (2018).

Occupational diseases also differ from injury by accident claims in their filing requirements.  In order to confer jurisdiction upon the Industrial Commission over an injury by accident claim, the plaintiff must file a Form 18 within two years of the date of injury or the last payment of medical bills, whichever is later.  For an occupational disease claim, however, the plaintiff has two years to file from the first date of disability or from the date a medical provider has provided an opinion causally linking the claimant’s disease and occupational exposure, whichever is later. N.C.G.S. § 97-58.  Frequently, this means the plaintiff will have long since left his or her employment with the insured employer and possibly retired altogether.

Another interesting distinction between injury by accident and occupational disease claims is found in N.C.G.S. § 97-57, which describes the employer and carrier liable for the claim.  The statute states the employer and carrier on the risk, or responsible for the claim, is the one where the employee was last injuriously exposed to the hazards of the occupational disease.  The Court has determined that injurious exposure, however slight, is enough to shift the liability to another carrier.  This issue creates a complexity to occupational disease claims that does not generally exist in injury by accident claims.  There are often multiple employers and usually many insurance carriers brought into occupational disease claims as defendants because it is difficult to prove where the last injurious exposure may have occurred.  As the result of the last injurious exposure standard being so low, often times the last employer and carrier in time ends up being liable despite evidence to the contrary.

Practice Tip: When dealing with an occupational disease claim, be sure to retain counsel as soon as possible and especially if discovery is served, because discovery in these cases can be very complicated and will require a detailed analysis regarding what is relevant and what should actually be produced.  Only in very rare cases would it be in the interest of the employer or carrier to accept an occupational disease claim due to the burden of proof on the plaintiff and the last injurious exposure defense outlined in from N.C.G.S. § 97-57.  The best practice is to allow defense counsel to take the lead on investigating the claim, in order to evaluate the strength of the last injurious exposure defense as well as answering discovery from the plaintiff.