Steps to reduce the risks of compensable injuries from employer-sponsored sports teams or events

There are many advantages to sponsoring an employee sports team or event, such as camaraderie, team building, exercise and just plain fun. However, what happens if an employee strains his back while pitching for your softball team or is hit by a golf ball during an outing to entertain clients or a fight breaks out and a third party is injured? It's important for employers to understand the risks, including liability for a workers' comp claim and liability for injuries of a third party caused by an employee.

While laws vary by state, the relationship of the company to the activity plays a key role in assessing liability. Some common guiding principles include:

• If the event is truly voluntary
  • Did the manager tell the employee to attend?
  • Is entertaining clients part of the job description?
  • Did the employer convey the expectation that all employees would attend?
• If an employer derives a direct business benefit from the activity beyond the intangible value of improvement in employee health and morale that is common to all kinds of recreation and social life
• If the event was on company property
• If the activity took place during normal working hours and the employee was compensated
• If the employer paid for the activity
• If employees are expected to build customer relationships by participating

Whether or not an injury during an event is while 'in the course and scope of employment' is not always clear-cut. The complexity is illustrated by the reversal by the Kansas Supreme Court last year of previous rulings that found in favor of a worker seeking workers' compensation benefits for injuries sustained while driving a go-cart during a company-sponsored event.

In Danny Douglas v. Ad Astra Information Systems L.L.C, the employee argued that he felt obligated to attend the event designed for workplace team building. The company sent an email to employees inviting them to a company-sponsored event at an indoor racing facility. The company covered all of the event expenses, including food. Employees were paid while attending and could either attend the event or remain at work. The owner gave a pep talk at the event and divided the employees into teams and asked them to compete for prizes. An administrative law judge ruled that the go-cart racing was not a purely recreational or social event and that the injuries were compensable. The Workers Compensation Board and the state appeals court agreed.

But the appeals continued with the employer arguing the injuries were not compensable because the employee was injured while at a recreational or social event he was not required to attend and he was not performing his normal duties while injured. The Kansas Supreme Court found that the board, upheld by the appeals court, applied an incorrect legal standard in the case, notably factors set forth in a well-known treatise, Larson's Workers' Compensation Law, and needed to reconsider its decision based on the statute. "A legal treatise may be utilized to explain and interpret Kansas law, but it cannot serve to supplant or alter the actual text of a statute."

The Kansas statute notes that an employee's injuries will be excluded from coverage under the Workers' Compensation Act where either (1) the employee was under no duty to attend the recreational or social event, or (2) the injury resulted neither from the performance of tasks related to the employee's normal job duties nor from performing tasks that he was specifically instructed to perform by his employer. The Supreme Court remanded the case to the board, but did so with instructions that "consideration should be given to any evidence which might support that a co-owner (of the company) specifically instructed Douglas to race the go-carts." While the possibility remains that compensation will be awarded, the case clearly demonstrates the complexities involved.

Similarly, in a Minnesota case, Paskett v. Imation Corp and Traveler's Group, an employee was involved in a charity week activity where he played flag football to benefit the United Way. The entry fee of $20, which he paid, went to the United Way. His employer paid him his regular wage during his time participating in the football game and he did not have to take any vacation or paid time off. During the flag football game, he injured his Achilles heel tendon, needed surgery, and missed two weeks of work.

Minnesota statute 176.021, subd. 9, makes clear that injuries occurring at certain voluntary recreational activities sponsored by an employer are not compensable. The exclusion does not apply when the injured employee was required to participate. In this case, the court found the facts of the case supported the employer's contention that this was strictly a voluntary recreational activity.

Here are guidelines to help minimize the risks and liabilities:

• Don't hold events on company premises or on company time.
• Have employees sign waivers. Make sure employees know participation is voluntary and they're playing at their own risk. Don't require or encourage participation in anyway. Recognize, however, that waivers do not provide all-encompassing protection.
• Limit company participation in the costs of the program, such as buying equipment or uniforms, refreshments, etc. The smaller the financial commitment, the less likely the team will be viewed as an extension of work.
• For events that take place during working hours, be sure employees have the option of either attending the voluntary company event or working their regular job.
• Don't give work-related speeches at such events.
• Know the state law. Some states provide forms that employers can require employees to sign.
• Include company policy on athletic and social events in the employee handbook.
• Prohibit alcohol.
• Treat all injuries consistently.