Employers seeking to boost employee morale and encourage team building often encourage or require their employees to attend company outings ranging from annual company picnics to softball games. Although companies intend for such activities to be a fun way for employees to interact outside of the workplace, these types of events raise difficult Workers’ Compensation liability issues. A recent decision by the South Carolina Supreme Court demonstrates that forcing employees to have fun may not always be a good idea.
Whigham v. Jackson Dawson Communications involved a plaintiff who filed a claim for Workers’ Compensation benefits after he was injured during a kickball game that he organized for his employer. The single commissioner denied Whigham’s claim because she found that his injury did not arise out of or in the course of his employment. The full commission and the court of appeals affirmed the denial.
The South Carolina Supreme Court reversed the decision and found that Whigham’s kickball injury was compensable under the South Carolina Workers’ Compensation Act. In reaching its decision, the court relied heavily on the “Larson test” set forth in Larson’s Workers’ Compensation Law. The Larson test provides that recreational or social activities are within the course of employment and should be covered under Workers’ Compensation when: (1) they occur on the premises during a lunch or recreational period as a regular incident of employment; or, (2) the employer expressly or impliedly requires participation, or by making the activity part of the services of the employee, brings the activity within the orbit of the employment; or, (3) the employer derives substantial 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.
Focusing on the second factor in the Larson test, the court found that Whigham’s employer impliedly made the kickball event a part of his services. Specifically, the Court reasoned that Whigham, who had suggested and organized the event to build company morale, felt that he was required to attend the event as part of his services to the company; thus, the kickball game was brought within the scope of his employment. The court explained that “when determining whether an employee is required to attend an event a directive is not necessary ‘if the employee is made to understand he is to take part in the affair’ . . . both Whigham and his superior plainly considered his presence vital to his job of executing the event.” (quoting Larson). The court further held that a specific act need not be designated in an employee’s job description to be compensable.
The take-away for employers is that Workers’ Compensation liability may extend to injuries that employees experience during recreational events like company picnics, sporting events, team-building exercises and retreats. Employers seeking to avoid Workers’ Compensation claims should be cautious when organizing and promoting company outings. Any implication that employees are required to attend may bring their participation in the event within the scope of their employment. Accordingly, injuries incurred at the event—whether it is food poisoning from a bad hot dog or a shoulder injury on the golf course—are likely to be compensable.