By Elizabeth Ligon, Teague Campbell
Whether for team building or to celebrate the upcoming holidays, we often see a resurgence of off-site, employer-sponsored events this time of year, which also means an uptick in questions about whether injuries that occur at these types of events are compensable under the North Carolina Workers’ Compensation Act. As with most legal questions, the answer is oftentimes “it depends.” The general rule involving these off-site events is if an employer provides an occasion for recreation or an outing for employees and invites them to participate - but does not require them to do so - and an employee is injured while engaged in the activities, such injury does not arise out of the employment. However, the courts will consider several factors to determine whether an injury occurring at an event is compensable, including whether the event was sponsored and financed by the employer, the extent the employer encouraged their employees to attend the event, and the extent that the employer benefited from the event.
What does case law say?
In Chilton v. Bowman Gray School of Medicine, 45 N.C. App. 13, 262 S.E.2d 347 (1980), the Radiology Department of the hospital organized and paid for a picnic for members of the faculty and new residents to become acquainted. Employees felt no direct pressure to attend, but some employees testified that they felt that they should go to the picnic. During a volleyball game at the picnic, an employee broke his ankle. The Court of Appeals considered several factors to determine whether an injury at an employer-sponsored recreational event was compensable, including:
- Did the employer in fact sponsor the event?;
- To what extent was attendance voluntary?;
- Was there some degree of encouragement to attend evidenced by such factors as taking a record of attendance, paying for the time spent or requiring the employee to work if he did not attend, or maintaining a known custom of attending?;
- Did the employer finance the occasion to a substantial extent?;
- Did the employees regard it as an employment benefit to which they were entitled as of right?; and
- Did the employer benefit from the event, not merely in a vague way through better morale and goodwill, but through such tangible advantages as having an opportunity to make speeches and awards?
After considering these factors, the Court of Appeals found the injury not compensable because it was not clear that the Radiology Department sponsored the picnic; the event seemed to be a self-perpetuating one that occurred each year more because of tradition than from any initiative taken by the Department heads; attendance was voluntary; no record of attendance was taken; the participants were not paid for the time spent, nor was any employee required to work at the medical school if he did not attend; the picnic was not an event that employees regarded as being a benefit to which he was entitled as a matter of right; and the Radiology Department did not utilize the picnic as an opportunity to give a “pep” talk or grant awards.
However, the Court came to a different conclusion in Holliday v. Tropical Nut & Fruit Co., 242 N.C. App. 562, 775 S.E.2d 885 (2015). There. the employer required the claimant to attend a three-day conference. On the first evening of the conference, the employer organized a bowling and laser tag social event for the employees in attendance. The employer paid all expenses for the event, assigned employees to teams, and told each employee which activities they would be participating in upon arrival. The claimant was assigned laser tag. Approximately 15 minutes into the game, he began to feel sharp pain in his knee. After the game concluded, he immediately informed his general manager that he thought he had hurt his knee, but he was able to attend the remainder of the conference.
The North Carolina Court of Appeals held that, since the employer required its employees to attend the conference, encouraged their participation in activities, and derived a business benefit from the event as a whole due to the team building and networking opportunities of the sporting events, the claimant's injury arose out of his employment. The Court further noted that the conference and the claimant's participation in all events during the conference were scheduled by the employer and were calculated to further, directly or indirectly, the employer’s business.
Considerations
When considering whether an injury occurring at a work event would be compensable, evaluate whether the work event is sponsored and/or financed by the employer, and whether the employee’s attendance is mandatory. Team building activities are important, but in order to minimize your exposure, voluntariness is key. If an employee is injured at an event sponsored and financed by their employer and participation is mandatory, the injury will most likely be found compensable.
