Sponsoring a Christmas Party - Holiday Cheer or Workers’ Comp Fear?

By: John H. Ruocchio

‘Twas the week before Christmas, when all through the work place

No work was ongoing, not one single trace

The invitations were sent by email with care,

In anticipation of merriment that all would be there.

The social committee planned all season long,

With visions of games, strong drink and song.

The CEO in a suit and me in my sweater,

Arrived just in time to see what was the matter . . .

Does having an employer sponsored party create risks? Does a slip on a spilled drink or sprained knee from dancing or a fallen Christmas tree at a holiday party pose workers’ comp exposure? Is the Workers’ Comp Act the Grinch that steals holiday cheer?

Luckily, if you follow the guidance from the Supreme Court, the answer is NO! The standard determination of compensability is whether the injury arises out of and is in the course of ones employment. Accordingly, the courts have interpreted the term arising out of employment as referring to the manner in which the injury occurred or the origin or cause of the accident. The injury must spring from the employment in order to be compensable under the Act. “An injury is said to rise out of the employment when it . . . is a natural and probable consequence or incident of” the employment and “a natural result of one of its risks,” so that “there is some causal relation between the accident and the performance of some service of the employment.” Taylor v. The Twin City Club, 260 N.C. 435, 132 S.E.2d 865 (1963). Accordingly, when an injury “comes form a hazard to which the worker would have been equally exposed apart from the employment or from a hazard common to others, it does not arise out of the employment” and “the causative danger must be peculiar to the work and not common to the neighborhood”; that is, “it must be incidental to the character of the business and no independent of the relation of the employer and employee.” Bryan v. T.A. Loving Company & Assoc., 222 N.C. 724, 24 S.E.2d 751 (1943). The court favorably cited Perry v. American Bakers Company, 262 N.C. 276, 136 S.E.2d 643 (1964) in holding as follows:

Where, as a matter of good will, an employer, at his own expense, provide an occasion for recreation or an outing for his employees and invites them to participate, but does not require them to do so, and an employee is injured while engaged in the activities incident thereto, such injury does not arise out of the employment.

Accordingly, the Supreme Court in Frost v. Salter Path Fire & Rescue, _361 N.C. 181, 639 S.E.2d 429 (2007) created the standard that if an employee is invited, but not required to attend an event that was arranged as a matter of good will by the defendant, and the employee is injured while “engaged in the activities incident thereto,” such injury does not arise out of the employment. Thus, attending a fun day or a party is not considered a function of the duties or responsibilities of their employment. If these activities are authorized merely for the optional pleasure and recreation, while an employee was off duty, then such injury is not compensable.

While the Court previously cited six points to address to determine compensability, they then limited their usefulness by stating they were not binding, but instead only persuasive points of inquiry. Rather, it held that an employee, who on a purely voluntary basis, attends a fun day/party and is injured while participating therein, cannot be said to have suffered a compensable injury arising out of and in the course of her employment. If the attendance was voluntary and the employee attends out of his own free will and for his personal benefit and pleasure, any injury is not compensable.

PRACTICE TIP: The Grinch does not prohibit holiday parties. Therefore, as long as people are encouraged, but not required to attend, and an employee attends based on his own decision and for his own pleasure, a holiday party does not pose a workers’ comp risk. Therefore, in sending out your invitations from your social committee, stress that all are welcome, but not required to attend.

Merry Christmas to all, and to all a good night..

~ Liability based on “Dram Shop” coming next week! ~