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Cluff v. NANA-Marriott, et al (1/27/95) sp-4162
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, telephone (907) 264-0607.
THE SUPREME COURT OF THE STATE OF ALASKA
EDNA CLUFF, )
) Supreme Court No. S-6083
) Superior Court No.
v. ) 4FA-92-1965 CI
NANA-MARRIOTT, ALASKA NATIONAL ) O P I N I O N
INSURANCE CO., UNIVERSAL OGDEN )
SERVICES, EAGLE PACIFIC )
INSURANCE CO., and the ALASKA )
WORKERS' COMPENSATION BOARD, )
Appellees. ) [No. 4162 - January 27,
EDNA CLUFF, )
) Supreme Court No. S-6223
) Superior Court No.
v. ) 4FA-93-2610 CI
Appeal in File No. S-6083 from the
Superior Court of the State of Alaska, Fourth
Judicial District, Fairbanks, Niesje J.
Steinkruger, Judge. Appeal in File No. S-
6223 from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Jay Hodges, Judge.
Appearances: William J. Soule, Law
Offices of William J. Soule, Anchorage, for
Appellant. Joseph M. Cooper, Laurence Keyes,
Russell, Tesche & Wagg, Anchorage, for
Appellees Nana-Marriott and Alaska National
Insurance Co. Robert B. Mason, Law Offices
of Mason & Griffin, Anchorage, for Appellees
Universal Ogden Services and Eagle Pacific
Before: Moore, Chief Justice,
Rabinowitz, Matthews, Compton and Eastaugh,
Edna Cluff appeals from a Workers' Compensation Board
(Board) determination that NANA-Marriott (NANA) was her employer
for workers' compensation purposes at the time of her injury.
Although Cluff was an employee of Universal Ogden Services
(Universal) on the day of her injury, and has never been employed
by NANA, she was taking a physical stress test which NANA
required potential employees to take in order to be eligible for
hire when she was injured.
I. FACTS AND PROCEEDINGS
On October 21, 1991, Cluff, a housekeeper employed by
Universal to work at an ARCO facility on the North Slope, was
injured while participating in a stress test at the facility.
This test, which involved physical exercises and some lifting,
was conducted by a physical therapist for the purpose of testing
potential employees of NANA. ARCO had recently awarded NANA the
contract for services which Universal had been providing. NANA
required all potential employees to take the test.
Uncontroverted evidence establishes 1) that the
physical therapist who ran the test, Marsha Wakeland, had
contracted with NANA and conducted the test at its direction; 2)
that the test was for the purpose of evaluating potential NANA
employees and reducing injuries among those hired; 3) that
Universal paid Cluff for the time during which she took the test;
4) that NANA never paid Cluff any wages for this time period; and
5) that NANA never hired Cluff. The parties dispute, however,
whether Cluff applied for or intended to apply for a position
with NANA. The Board did not resolve any of the factual disputes
between the parties.
Cluff testified that she never intended to apply for a
position with NANA but rather intended to wait for a position to
open up with Universal. When told by one of her supervisors
while she was in Fairbanks that she could apply for work with
NANA at NANA's Anchorage office, she refused. She also testified
that she only participated in the stress test on instructions
from her supervisor.
Universal and NANA assert, however, that Cluff was
knowingly attempting to secure employment with NANA. A NANA
supervisor, Hank Henry, testified that Cluff approached him about
possible employment and that Cluff was concerned about having
missed interviews which NANA had already conducted with Universal
employees. He testified that he informally interviewed her and
promised to recommend her to NANA's human resources department.
He did not have authority to hire her. Wakeland testified that,
before she began the testing, she told all test participants that
she worked for NANA and what the purpose of the test was.
Cluff's supervisor denied instructing Cluff to take the test and
stated that Cluff had told her that she had interviewed with
Cluff filed a report of injury with the Board naming
Universal as her employer. In this report, she stated that she
was injured "doing stress test for NANA/Marriott." Universal
controverted Cluff's claim, contending that her injury did not
arise out of and in the course and scope of her employment. NANA
accepted responsibility for Cluff's claim and paid her temporary
total disability and medical benefits. On May 7, 1992, Cluff
filed an application for adjustment of claim against Universal,
and NANA petitioned for a determination of Cluff's correct
After a hearing, the Board determined that NANA was
Cluff's employer for workers' compensation purposes. It first
found that Cluff was performing services for NANA under an
implied contract of employment and on rehearing concluded that
the stress test was an integral part of a tryout period.1,2
Cluff appealed to the superior court; the superior court affirmed
the Board. Cluff appeals to this court.
In October 1993, Cluff brought a civil action for
negligence against NANA, the physical therapist who conducted the
stress test, and the therapist's employer. NANA moved for
partial summary judgment based on collateral estoppel arising
from the superior court's decision affirming the Board's
determination that NANA was Cluff's employer for workers'
compensation purposes. The superior court granted NANA's motion
for partial summary judgment and then entered final judgment
against Cluff. Cluff appeals from these orders. Cluff's
workers' compensation and civil suit appeals have been
consolidated on appeal.
A. Did the Board err by failing to determine whether
Universal was Cluff's employer for workers' compen
sation purposes before deciding whether NANA was liable
The decision of the Board only addressed the question
of whether Cluff was an employee of NANA for purposes of workers'
compensation. The Board did not determine whether Universal
could also be held liable for workers' compensation benefits.
The Board did not resolve any of the factual disputes between
Cluff and Universal and NANA. Apparently, the Board assumed that
if it found NANA to be Cluff's employer for workers' compensation
purposes, this would either preclude liability on the part of
Universal or make such liability irrelevant.
The Board's approach was incorrect.3 The Board failed
to take into account the doctrine of lent employment. Under the
lent employment doctrine, if one employer lends an employee to
another employer, the lending employer is called the "general"
employer and the other employer is called the "special"employer.
Ruble v. Arctic Gen., Inc., 598 P.2d 95, 97 n.3 (Alaska 1979); 1B
Arthur Larson, The Law of Workmen's Compensation 48.00, at 8-
434 (1992). As we will explain, the requirements for finding an
employment relationship for workers' compensation purposes
between a lent employee and a special employer are stricter than
the standards for finding an employment relationship between an
employee and an employer where there is only one employer.
If Cluff's version of the facts is accurate, her
general employer was Universal and NANA was, at most, her special
employer while she was on loan to NANA to take the stress test.
Therefore, the Board's decision was erroneous for three reasons,
which shall be explained in detail below. First, in a lent
employee situation, the statutory presumption of compensability
in our workers' compensation system applies to the general
employer; the Board failed to apply the presumption to Universal.
Second, a special employer may only be liable for worker's
compensation if there is an express or implied contract between
the special employer and the employee; the Board erred when it
determined that an implied contract existed between Cluff and
NANA. Third, the tryout exception does not apply to a special
employer in a lent employee situation; the Board decided that the
tryout exception applied to NANA.
1. The presumption of compensability
applies to Cluff's claim that Universal was
responsible for her injury.
The presumption of compensability for workers'
compensation claims is codified in AS 23.30.120(a)(1), which
In a proceeding for the enforcement
of a claim for compensation under this
chapter it is presumed, in the absence of
substantial evidence to the contrary that (1)
the claim comes within the provisions of this
chapter . . . .
Cluff argues that the Board erred in failing to apply the
statutory presumption against Universal. Universal and NANA
argue that the presumption is inapposite, because the presumption
only establishes that the claim comes within the provisions of
the workers' compensation act, which neither disputes. Universal
and NANA argue that the presumption has no effect on the
determination of which employer was liable for Cluff's injury
once they concede that the injury itself was compensable and that
NANA was liable.
Universal and NANA are in error. We stated in Ruble
that, where multiple employers are involved, the presumption
applies to the general employer and the special employer may be
liable for benefits only if a contract exists between the special
employer and the employee. 598 P.2d at 97.
According to [Professor] Larson, a
special employer . . . becomes liable for
workers' compensation only if the employee .
. . has made a contract of hire, express or
implied, with the special employer. . . . In
the usual case involving multiple employers,
the employee is seeking to hold a particular
employer liable for workers' compensation.
In such cases, the liberal purpose of the
workers' compensation act, to benefit the
employee, and the presumption that a claim
comes within the provisions of the act apply.
Id. at 97 (emphasis added, citations omitted).4 We quoted
What gives the lent-employee cases their
special character, however, is the fact that
they begin, not with an unknown relation, but
with an existing employment relation. . . .
The . . . presumption is the continuance of
the general employment, which is taken for
granted as the beginning point of any lent-
Id. at 97 n.8 (quoting 1B Arthur Larson, Workmen's Compensation
Law 48.10, at 8-210 to 8-211 (1978) (emphasis added)).
The law on when the presumption should be applied in
multiple employer cases was further developed in Alaska Pulp
Corp. v. United Paperworkers Int'l Union, 791 P.2d 1008 (Alaska
1990). In Alaska Pulp, the employer claimed that the claimant
had suffered a subsequent intervening injury while employed by
his union, thus making the union responsible for benefits under
the last injurious exposure rule. Id. at 1009. The employer
claimed that there was an employee-employer relationship between
the claimant and the union and argued that it should have the
benefit of the presumption with respect to its claim that the
union was the employer. Id. at 1011. We rejected this attempt
to extend the presumption of AS 23.30.120(1) to "inter-employer
disputes on the question of whether an employment relationship
existed between the worker and the subsequent party." Id. at
1011. Our holding did not disturb the principle that the
presumption applies where a lent employee makes a claim against a
general employer. We only held that the presumption may not be
used by an employer in disputes with other possible employers
when the question is which is responsible for payment of a
workers' compensation claim. Id. at 1011-12.
In reaching this conclusion, we emphasized that the
presumption of AS 23.30.120(1) is a "pro-worker"presumption and
that workers may be deprived of valuable rights if an employee
status to which they have not consented contractually is thrust
[W]e do not think that the pro-worker
presumption of AS 23.30.120(1) was intended
to facilitate proof of an employee status
contrary to that asserted by the worker. An
important purpose underlying the contract of
employment requirement is to avoid "thrust
[ing] upon a worker an employee status to
which he has never consented . . . [since
doing so] might well deprive him of valuable
rights . . . ." 1C A. Larson, The Law of
Workmen's Compensation 47.10 at 287-289
(1986). In a dispute between purported
employers, a presumption that the subsequent
party was indeed the worker's employer
contravenes this purpose. Such use of the
presumption risks thrusting upon a worker an
employee status to which he never consented,
and could deprive him of valuable rights.
For example, once deemed to have had an
employment relationship, any common law
rights the worker may have had against the
subsequent party are terminated. We do not
believe that the presumption of AS
23.30.120(1) was intended to adversely affect
workers' rights in this manner.
Id. at 1011-12 (emphasis added). In the instant case, unlike in
Alaska Pulp, application of the presumption to Universal is
appropriate, since Cluff is attempting to use the presumption to
prevent NANA and Universal from thrusting upon her an employee
status to which she did not consent contractually.5
On remand, the Board must apply the presumption of AS
23.120.30(a)(1) to Cluff's claim that Universal was her employer
for workers' compensation purposes. Under the presumption,
Cluff's injury is presumed to have arisen "out of and in the
course of employment"by Universal, absent substantial evidence
to the contrary.6 The presumption "will drop out if an employer
adduces 'such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion'"that Cluff's injury did not
arise out of and in the course of her employment for Universal.
Municipality of Anchorage v. Carter, 818 P.2d 661, 665 (Alaska
1991) (quoting Kodiak Oilfield Haulers v. Adams, 777 P.2d 1145,
1150 (Alaska 1989)).
2. No implied employment contract existed
between Cluff and NANA at the time of her injury.
In lent employee cases, a special employer may be
liable for workers' compensation benefits only if the employee
has made an express or implied contract of hire with the special
employer. Selid Construction Co. v. Guarantee Insurance Co., 355
P.2d 389 (Alaska 1960); Kroll v. Reeser, 655 P.2d 753, 756
(Alaska 1982); Ruble v. Arctic Gen. Inc., 598 P.2d 95, 97 (Alaska
1979); 1B Arthur Larson, The Law of Workmen's Compensation 48,
at 8-434 (1992). In Selid, an oiler employed by a construction
company was ordered by the company to work temporarily for
another company. 355 P.2d at 390. The oiler went to work for
the other company and was injured toward the end of the day. Id.
at 391. The construction company urged us to apply the lent
employee doctrine and conclude that the oiler was the special
employee of the other company for workers' compensation purposes.
Id. at 392. We held that the oiler was, at the time of the
injury, an employee of the construction company and not of the
other company for workers' compensation purposes. Id. at 393.
The relationship of employer-employee
can only be created by a contract, which may
be express or implied. Once created, the
relationship cannot be changed to substitute
another employer without the employee's
consent. The employee must have understood
and agreed before there can be any transfer
to another employer. Where the employee
commences to serve another at the direction
of his employer, no new relationship is
necessarily created. He may simply be
performing his duty to the employer who gave
the order. Even though his actions may be
controlled by the new master, no new
relationship is created in the absence of an
express or implied contract between the
employee and the new master. Consent of the
employee to a change in masters cannot be
implied merely from his obedience to the
order of his master.
All parties agree that there was no express employment
contract between NANA and Cluff. In its first decision, the
Board concluded that "the employee was performing services for
NANA-Marriott under an implied contract of employment (as far as
workers' compensation is concerned) when she suffered her
injury." "An implied employment contract is formed by a relation
resulting from 'the manifestation of consent by one party to
another that the other shall act on his behalf and under his
control, and consent by the other so to act.'" Childs v. Kalgin
Island Lodge, 779 P.2d 310, 314 (Alaska 1989) (quoting 9 W.
Jaeger, Williston on Contracts 1012, at 4-5 (3d ed. 1967)).
The existence of an implied contract must be determined by
considering all the factors in light of the surrounding
The circumstances surrounding the stress test are not
sufficient to give rise to an implied employment contract. Even
if Cluff consented to act under NANA's control for the period of
the test, neither party treated the test as an employment
relationship. Although the test may have been for NANA's
benefit, it cannot be fairly said that Cluff acted on NANA's
behalf or that NANA consented to Cluff acting on its behalf. An
implied employment contract will not be found to exist in a
situation which clearly preceded any possible future employment
3. The "tryout exception"adopted by this
court in Childs v. Kalgin Island Lodge is not
applicable in the lent employee context.
In Childs, we adopted the "tryout exception to the
general rule that a contract for hire must exist before benefits
can be awarded." Childs, 779 P.2d at 314. We stated that "when
an employer exposes potential employees to risks inherent in a
tryout period and the applicant is under his direction or
control, any injury resulting during such a period is compensable
as a matter of law." Id. at 315. In reliance on Childs, the
Board concluded that "the stress test was an integral part of the
'tryout' period."7 We conclude, however, that the tryout
exception is inapplicable to a special employer in the lent
employee context. Therefore, if the Board, after applying the
presumption of compensability, concludes that Universal is liable
to Cluff for compensation benefits, its decision that the tryout
exception applies to Cluff's relationship with NANA will not
stand as a matter of law.
Our conclusion that the tryout exception may not apply
to special employers in the lent employee context is based on
Professor Larson's treatise, the general principles of workers'
compensation law, and the policies behind the tryout exception.
Larson endorses the tryout exception. 1A Larson, supra, 26.26,
at 5-327. However, Larson also states that a special employer
may be liable for compensation benefits only if the special
employer has an express or implied contract with the lent
When a general employer lends an
employee to a special employer, the special
employer becomes liable for workmen's
compensation only if: (a) the employee has
made a contract of hire, expressed or
implied, with the special employer; (b) the
work being done is essentially that of the
special employer; and (c) the special
employer has the right to control the details
of the work.
1B id. 48.00, at 8-434. Larson puts great emphasis on the
importance of a contract for hire with a special employer in lent
In compensation law, the spotlight
must now be turned upon the employee, for the
first question of all is: Did he make a
contract of hire with the special employer?
If this question cannot be answered "yes,"
the investigation is closed, and there is no
need to go on into tests of relative control
and the like. . . .
This must necessarily be so, since
the employee loses certain rights along with
those he gains when he strikes up a new
employment relation. Most important of all,
he loses the right to sue the special
employer at common law for negligence; and
when the question has been presented in this
form, the courts have usually been vigilant
in insisting upon a showing of a deliberate
and informed consent by the employee before
employment relation will be held a bar to
1B id. 48.11 to 48.12, at 8-440.8 Since there is no contract
of hire during a tryout, the tryout exception cannot apply to
special employers in a lent employee context.
The conclusion that the tryout exception may not apply
to a special employer also follows from the basic principles of
compensation law. Two major features of the compensation system
are that "the employee and his dependents, in exchange for . . .
modest but assured benefits, give up their common-law right to
sue the employer for damages for any injury covered by the act"
and that "the right to sue third persons whose negligence caused
the injury remains, however, with the proceeds usually being
applied first to reimbursement of the employer for the
compensation outlay, the balance (or most of it) going to the
employee." 1 id. 1.10, at 1-2. The doctrine that workers'
compensation law provides an exclusive remedy is, however,
limited to situations where the worker gains something of value
in exchange for surrendering the common law right to sue in tort:
If, as stated [by Larson] earlier, the
exclusiveness defense is a "part of the quid
pro quo by which the sacrifices and gains of
employees and employers are to some extent
put in balance,"it ought logically to follow
that the employer should be spared damage
liability only when compensation liability
has actually been provided in its place, or,
to state the matter from the employee's point
of view, rights of action for damages should
not be deemed taken away except when
something of value has been put in their
2A id. 65.40, at 12-41.
Applying the tryout exception to a special employer in
the lent employee context would be improper because it would take
away the lent employee's right of action for damages without
giving the employee anything of value in its place. If a general
employer lends an employee to a special employer for purposes of
a tryout and the lent employee is injured, the lent employee is
assured of getting compensation benefits from the general
employer. Thus, applying the tryout exception to the special
employer would take away the lent employee's right to sue the
special employer in tort without giving the employee any
additional benefits in exchange.
Moreover, the policies underlying the tryout exception
do not support extension of the tryout exception to cover lent
employees. The tryout exception is aimed at making sure that
compensation benefits are provided once the risks of employment
begin to operate where there is no contract of hire. See Laeng
v. Workmen's Compensation Appeals Bd., 494 P.2d 1 (Cal. 1972).
As a lent employee is already guaranteed compensation benefits
from the general employer if injured while trying out with a
special employer, it is unnecessary to extend the tryout
exception to lent employees.
Since the tryout exception is not applicable to special
employers in the lent employee context and since no employment
contract was made between Cluff and NANA, if the Board on remand
finds that Universal is liable to Cluff for compensation
benefits, NANA will not be liable for compensation benefits and
Cluff will have the right to sue NANA in tort.
B. Should the tryout exception apply to the stress
test if the Board finds that Universal is not liable to
If the Board finds that Universal was not Cluff's
employer for workers' compensation purposes, determining whether
the tryout exception applies to Cluff's relationship with NANA
will require additional factual determinations by the Board on
remand. Cluff argues that the tryout exception is inapplicable
to the facts of her case. Cluff claims that her case is
distinguishable from Childs for four reasons: 1) she did not
apply for or intend to apply for a job with NANA; 2) she did not
file a workers' compensation claim against NANA; 3) the stress
test alone was not sufficient to establish a tryout under law;
and 4) she took the stress test at the direction of her employer
Universal. We shall address Cluff's arguments in inverse order.
Cluff is correct that the tryout exception should not
be applicable if she took the stress test at the direction of
Universal. If the Board finds that Universal instructed Cluff to
take the test, that will mean that Universal was Cluff's general
employer at the time of the test and Universal lent Cluff to NANA
for the test.9 As we explained above, the tryout exception is
not applicable to a special employer in a lent employee
Cluff is in error, however, in her argument that the
stress test is not sufficient to establish a tryout under law.
It is true that, unlike Cluff, the applicant in Childs performed
actual work for the employer. Childs, 779 P.2d at 314. But when
we adopted the tryout exception in Childs, we relied on Laeng,
494 P.2d 1. See Childs, 779 P.2d at 315. The applicant in Laeng
did not perform any services for his potential employer and only
participated in a physical agility test designed to mimic the
activities he would have engaged in if hired. 494 P.2d at 3.
The stress test taken by Cluff is similar to the agility test
taken in Laeng since Cluff took a test designed to mimic the
activities she would have engaged in if employed by NANA. We
find, therefore, that the tryout exception is applicable to the
facts of the stress test.
We interpret Cluff's contention that Childs should not
be applicable because Cluff did not seek workers' compensation
benefits against the purported employer (NANA) as an argument
that the tryout exception should not be applicable defensively.
None of the jurisdictions applying the tryout exception has
decided whether the exception may be applied defensively.
Allowing the tryout exception to increase employers' compensation
liability without permitting employers to use it defensively
would contravene the basic balancing principle of the
compensation system that the employee gives up the common law
right to sue in tort for modest but assured benefits. See 1
Larson, supra, 1.20, at 1-2. Forbidding defensive use of the
tryout exception would turn the tryout exception into a tool that
could only benefit employees without providing a corresponding
benefit to employers. We therefore decline to hold that the
tryout exception may not be used defensively.
However, Cluff's argument that the tryout exception
should not be applicable because she did not apply for or intend
to apply for a job with NANA leads us to a limitation on
defensive use of the tryout exception. When an employee accepts
a job with an employer, it is fair that the employee loses the
right to sue in tort in exchange for workers' compensation
coverage because the employee knows that employment is being
accepted and presumably knows the impact that such acceptance has
on the right to sue. Likewise, it can be fair for an employee to
give up the right to sue in tort when participating in a tryout
only if the employee knows that she is applying for a job and
participating in a tryout. Otherwise, defensive use of the
tryout exception would thrust upon the employee an employment
status to which she did not consent and deprive the employee of
valuable rights. See Alaska Pulp, 791 P.2d at 1011.
Consequently, we decide that the tryout exception may be applied
defensively only where the employee knows that she is
participating in a tryout and applying for a job.
The Board did not determine whether Cluff intended to
apply for a job with NANA or knew that she was participating in a
test that was part of a job application process. The Board must
resolve this on remand only if it finds that Universal was not
Cluff's general employer. If the Board then finds that Cluff
intended to apply for a job with NANA and knew that she was
participating in a test that was part of a job application
process when she took the stress examination, it will follow that
NANA was Cluff's employer for compensation purposes. Otherwise,
NANA may not be considered Cluff's employer for compensation
C. Did the superior court err in dismissing Cluff's
civil action against NANA?
Although we remand Cluff's workers' compensation case
to the Board for additional proceedings, we affirm the dismissal
of NANA as a defendant in Cluff's civil suit. We have previously
stated that dismissal with prejudice of an action based on
collateral estoppel when the initial suit is still subject to
appeal, rather than staying the action pending the outcome of the
appeal, is not error. Lyman v. State, 824 P.2d 703, 705-06
(Alaska 1992). Since the superior court committed no error when
it entered its judgment, and since we are not issuing a final
decision on whether NANA is liable to Cluff for compensation
benefits, this court is not the proper forum for attacking the
superior court's judgment. If Cluff prevails on remand before
the Board (or on a subsequent appeal) on her contention that NANA
was not her employer, Cluff may file a Civil Rule 60(b)(5) motion
for relief from judgment in the civil action, which should be
granted as a matter of course assuming that it is filed within a
reasonable time after final resolution of the controversy being
remanded to the Board.
The Board erred by attempting to determine whether NANA
was liable to Cluff for compensation benefits without first
attempting to determine whether Universal was liable to Cluff for
compensation benefits. The Board erred by failing to apply the
presumption of compensability to Cluff's claim that Universal was
her employer with regard to the injury. The Board erred in
concluding that an implied contract of employment existed between
Cluff and NANA. The Board did not make the factual findings
necessary to determine whether the tryout exception is applicable
to this case.
We therefore REMAND for further proceedings consistent
with this opinion. The Board must first determine whether
Universal was Cluff's general employer with regard to the stress
test. In making this determination, the Board must apply the
presumption of compensability to Universal. If Universal was
Cluff's general employer, then, under lent employment rules, NANA
will not be liable to Cluff for compensation benefits. If
Universal was not Cluff's general employer, the Board may find
that the tryout exception applies and that NANA is liable to
Cluff for compensation benefits only if it determines that Cluff
intended to apply for a job with NANA and knew that she was
participating in a test that was part of a job application
The superior court's decision in case S-6223, granting
NANA summary judgment on Cluff's civil claim against it, is
1 In Childs v. Kalgin Island Lodge, 779 P.2d 310, 314
(Alaska 1989), we adopted the "tryout exception to the general
rule that a contract for hire must exist before benefits can be
awarded." We stated that "when an employer exposes potential
employees to risks inherent in a tryout period and the applicant
is under his direction or control, any injury resulting during
such a period is compensable as a matter of law." Id. at 315.
2 The Board issued two decisions because additional
documentation erroneously left out of its file was discovered
after the first decision. It is unclear whether the Board's
reliance on the tryout exception in its second decision was meant
as an additional reason, as a clarification, or merely as a
restatement of its first decision. The Board's statement in its
second decision that it was "reaffirm[ing]"its previous decision
and its reliance in both decisions on the stress test being
"integral" to NANA's business indicate that it did not
distinguish between an implied contract and the tryout exception.
3 This court independently reviews Board decisions on
questions of law. Childs, 779 P.2d at 313 (Alaska 1989). The
Board's factual determinations are reviewed under the substantial
evidence test. Yahara v. Construction & Rigging, Inc., 851 P.2d
69 (Alaska 1993). "Substantial evidence is that which a
reasonable mind, viewing the record as a whole, might accept as
adequate to support the Board's decision." Id. at 72.
4 We reiterated the quoted language in a subsequent case,
Kroll v. Reeser, 655 P.2d 753, 756 (Alaska 1982).
5 The application of the presumption of AS
23.30.120(a)(1) against the general employer in lent employee
cases also follows from a long line of cases using the
presumption in a wide variety of contexts. It is well-
established that the presumption goes far beyond the issue of
whether an injury is work-related.
[O]ur rulings had [initially] only
applied the presumption to claims which
sought to establish a nexus between the
injury and the work place. Our recent
decisions, however, have given a broader
reading to the presumption. In Municipality
of Anchorage v. Carter, 818 P.2d 661 (Alaska
1991), we extended the presumption of
compensability to a claim for continuing care
under AS 23.30.095(a) and found that "the
text of AS 23.30.120(a) indicates that the
presumption of compensability is applicable
to any claim for compensation under the
workers' compensation statute." Id. at 665.
In Wien Air v. Kramer, 807 P.2d 471 (Alaska
1991), we applied the presumption to a claim
for continuing temporary total disability.
Kirby v. Alaska Treatment Ctr., 821 P.2d 127, 129 (Alaska 1991).
In Kirby, we applied the presumption to claims for vocational
rehabilitation benefits. Id. In Sokolowski v. Best Western
Golden Lion Hotel, 813 P.2d 286, 292 (Alaska 1991), we held that
the presumption of compensability applied to each evidentiary
question inherent in the special hazard exception to the rule
that compensation is not payable for injuries suffered while the
employee is going to or coming from work.
6 AS 23.30.265(17) defines "injury"in relevant part as
"accidental injury or death arising out of and in the course of
employment . . . ." An "injury"falling within this definition
which results in "disability"is compensable. AS 23.30.265(10),
7 In support of its conclusion that the tryout exception
was applicable, the Board found that 1) Cluff "was participating
in a pre-employment stress test at the time of her injury"; 2)
the testing was "an activity integral to NANA's business
practices"; 3) NANA utilized Cluff's services for the testing; 4)
NANA controlled the time, manner, and location of the activity;
and 5) Cluff performed exercises related to the activities she
would engage in at the job for which she was being considered.
8 As noted earlier, this court has followed Larson and
stressed the important role that the contract of employment
requirement plays in preventing an unwanted employment status
from being thrust upon an employee and depriving the employee of
a valuable common law right. See Alaska Pulp, 791 P.2d at 1011-
9 The converse will not necessarily be true -- if
Universal did not instruct Cluff to take the test, Universal
still may be liable for Cluff's workers' compensation benefits,
depending on the Board's evaluation of such indicia of work
connectedness as Universal's sanction of the test, its payment of
Cluff during the time she was taking the test, the remoteness of
the work site, and other potential factors. Cf. 1-1A Larson,