Planning Holiday Activities with Your Employees? – What You Need to Know About Injuries During Company Outings

By: Melissa P. Woodard

The leaves are falling, and cooler temperatures are finally setting in North Carolina. Many employers are planning to celebrate the holiday season with their employees by hosting parties and events in the coming months. What legal implications might this have from a workers’ compensation perspective? Let’s explore.

Hopefully, the last thing to occur at a company celebration or outing would be an injury, but they do happen. Carriers and employers should be aware of the circumstances that make workers’ compensation claims for these kinds of injuries compensable or not. In North Carolina, an injured worker must prove they sustained an injury by accident arising out of and in the course of their employment for a claim to be compensable. Holliday v. Tropical Nut & Fruit Co., 242 N.C. App. 562, 566, 775 S.E.2d 885, 889 (2015). The primary issue in cases involving work outings is whether the injury arose out of the employment.

Case law defines the “arising out of” element as referring to “the origin or cause of the accident” such that the employment is “a contributing cause” or bears a “reasonable relationship to the employee’s injuries.” Morgan v. Morgan Motor Co. of Albemarle, 231 N.C. App. 377, 380, 752 S.E.2d 677. 680 (2013). The courts have instructed the Industrial Commission to consider several factors in determine whether injuries occurring at company outings arise out of the employment:

1. Did the employer in fact sponsor the event?

2. To what extent was attendance really voluntary?

3. Was there some degree of encouragement to attend evidenced by such factors as:

a. taking a record of attendance;

b. paying for the time spent;

c. requiring the employee to work if he did not attend; or

d. maintaining a known custom of attending?

4. Did the employer finance the occasion to a substantial extent?

5. Did the employees regard it as an employment benefit to which they were entitled as of right?

6. Did the employer benefit from the event, not merely in a vague way through better morale or good will, but through such tangible advantages as having an opportunity to make speeches and awards?

Perry v. Am. Bakeries Co., 262 N.C. 272, 275, 136 S.E.2d643, 646 (1964).

Accordingly, injuries occurring at events that are employer-sponsored or funded, expressly or impliedly mandatory, beneficial to the employer, and an entitlement to the employee are generally considered compensable. Id.

By way of example, an employee was injured during a laser tag game at a company conference that also included meetings. Holliday, 242 N.C. App. at 570-71, 775, S.E.2d at 891. Attendance was clearly expected and participation in the laser tag outing was mandatory. Id. The court held that the injury was compensable. Likewise, in a case where an employee was injured during a company picnic that was not clearly sponsored by the employer and attendance was voluntary, providing no tangible benefit to the employer, the injury did not arise out of the employment. See Chilton v. Bowman Gray School of Medicine, 45 N.C. App. 13, 262 S.E.2d 347 (1980).

Practice Tip: Evaluate the factors above by asking pointed specific questions to your insured and the plaintiff if s/he is unrepresented. If you are in doubt after an initial investigation, we recommend filing a Form 63 agreeing to pay medical benefits only without prejudice or filing a Form 61 denying the claim. As always, if you have any questions or would like additional information or advice regarding these issues, please feel free to contact Lewis & Roberts.