In handling workers’ compensation claims, it is common to hear the following question from a client: “Why is this employee receiving benefits when they disregarded a directive from management or company rule or directive resulting in an injury?” Unfortunately, an act of negligence on the part of an employee while in the performance of his work duties will not bar that employee’s right to compensation for the accident resulting from the negligence. Stubblefield v. Watson Elec. Constr. Co., 277 N.C. 444, 177 S.E.2d 882 (1970).

There is a line of cases holding that an employee can be barred from receiving workers’ compensation benefits if that employee disregards a direct order from a then-present supervisor. Courts have made a distinction between a situation in which an employee disregards a direct order from a then-present supervisor and a situation in which an employee is injured while disregarding a general company rule or prohibition not to perform a certain activity. In Hoyle v. Isenhour Brick & Tile Company, 306 N.C. 248, 293 S.E.2d 196 (1982), the Supreme Court of North Carolina explained this reasoning as follows: “When there is a rule or a prior order and the employee is faced with the choice of remaining idle in compliance with the rule or order or continuing to further his employer’s business, no supervisor being present, the employer who would reap the benefits of the employee’s act if successfully completed should bear the burden of injury resulting from such acts.”

Though not a complete bar to recovery, N.C.G.S. § 97-12 provides employers some form of redress when an employee is injured while disregarding a general Company rule or prohibition not to perform a certain activity. N.C.G.S. § 97-12 states, in pertinent part:

When the injury or death is caused by the willful failure of the employee to use a safety appliance or perform a statutory duty or by the willful breach of any rule or regulation adopted by the employer and approved by the Commission and brought to the knowledge of the employee prior to the injury compensation shall be reduced ten percent (10%). The burden of proof shall be upon him who claims an exemption or forfeiture under this section.

For years, defendants in workers’ compensation claims were asking what exactly the term “approved by the Commission” meant. Defendants would often seek a 10% reduction in benefits as a result of a breach of a rule or regulation and have that request denied by the Commission based on the theory that the rule or regulation had not been “approved by the Commission.” In denying the request for the 10% reduction, the Commission would never actually explain how, in practice, an employer would get a rule or regulation approved by the Commission.

Finally, in November, 2014, in response to repeated requests by the defense bar, the Commission supplemented its Rules by adding 04 NCAC 10A.0411, which states:

The process for the Commission to approve safety rules or regulations adopted by an employer as set forth in G.S. 97-12 is as follows:

(1) The rules shall comply with the general provisions of the safety rules outlined by the American National Standards Institute and the Occupational Safety and Health Act. These standards can be purchased at and accessed free of charge at, respectively.

(2) The rules shall be filed by the employer in writing with the Commission’s Safety Education Director by mailing them to 4339 Mail Service Center, Raleigh, NC 27699- 4339 or e-mailing them to

(3) The rules shall be reviewed by the Safety Education Director of the Commission and approved if they are found to be in compliance with Item (1) of this Rule. The Commission shall return to the employer a copy of the rules bearing a certificate of approval from the Commission indicating that the rules have been approved by the Commission pursuant to G.S. 97-12. An employer may revise and resubmit the rules if not approved by the Safety Education Director of the Commission.

It is recommended that all employers take advantage of this new provision and submit their safety rules and regulations to the Commission for approval. As detailed above, while it is still not a basis for a complete denial of benefits, this clarification should make it easier for employers seeking a 10% reduction in benefits.

Even if a rule or regulation is approved by the Commission and an employee fails to follow said rule or regulation, an employer will still need to submit sufficient evidence of the following to be entitled to the reduction in benefits: that the failure was willful, that the injury or death was caused by the failure, and that the employee was made aware of the rule or regulation prior to the injury.

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Joseph Delfino

The information published in Hedrick Gardner Alerts is general in nature and not intended to take the place of legal advice on any particular matter. © 2017 Hedrick Gardner Kincheloe & Garofalo LLP