Safe socializing - avoiding liability for injuries during corporate-sponsored social events

"All play and no work" is one policy that can help employers avoid workers' compensation liability at social functions.

Every year, employers invest time and money in planning, promoting and sponsoring social functions for employees. Company picnics and holiday parties can boost morale and show appreciation to a hard-working staff, but if an employee is injured during an employer-sponsored event, the price the company pays in workers' compensation premiums may well exceed the costs of throwing the party.

WHERE THERE'S BENEFIT, THERE'S LIABILITY

To receive workers' compensation benefits for injuries sustained a social event, employees must prove that the event was promoted by, or some way benefited, the employer. Although employers believe their company gatherings are held strictly for the benefit of employees, courts have found that many of the more common events actually promote employers' interests.

For example, courts have ruled that employees injured while going to or returning from a work-sponsored event - such as while driving a car or crossing a street - are acting in the employer's interest and eligible for compensation for their injuries. A Pennsylvania court held an employer liable when an employee drowned at the company's annual summer picnic. Although the company did not pay the employee to attend or otherwise request his attendance, it did supply the food for the picnic and it advertised the event with posters.

The judge reasoned that the picnic was designed to maintain good employment relationships and so it promoted the employer's interests. As a result, the employee's family was entitled to workers' compensation benefits.

WHEN LIABILITY ARISES

To protect against liability for employee injuries at work-sponsored events, employers should be aware of the types of functions courts may view as promoting employer interests, such as events where business clients and employees are guests. This type of mingling is generally viewed as contributing to improved client relations - a direct benefit to employers.

Functions that focus on recognizing employees can also serve an employer's interest because they improve employment relationships and promote teamwork. Mandatory employee attendance usually sends the message that an event is for business purposes.

The courts also view certain employer-sponsored recreational activities as directly benefiting the employer. One common scenario involves games or sports played at the company picnic. If the company advertises the activity or rewards participants and winners, they may be seen as furthering an employer's interest. The employer would be liable for any injuries participants in the game or sport sustain since events designed to foster morale and good relations among co-workers can improve business and therefore serve the employer's interest.

SEND A CLEAR MESSAGE

Employers do not need to discontinue social functions for employees altogether. One of the most important steps to preventing liability is making dear distinctions between work-sponsored events that serve business purposes and social functions provided for employees' enjoyment.

When an event is designed solely for employees' enjoyment, employers should not:

* Plan or organize the event. Instead, encourage volunteer employee committees to plan non-business-related functions.

* Create signs, fliers or posters to advertise the function. Volunteer committees should handle all aspects of event promotion. Be sure that the employer is not named as the sponsor on promotional materials.

* Mandate employee participation.

* Reimburse employees for expenses incurred in attending the function.

* Sponsor teams at the event.

* State or imply that attendance at the event will improve an employee's standing within the company or will be a factor in evaluating job performance.

* Promote the event as an "annual custom" or use any other term that may infer company ownership.

Following these guidelines will help ensure that employees understand the function is strictly for socializing, and that the employer is not liable for any injuries employees may sustain while attending.

PUT SAFETY FIRST

At any work-related function - whether or not it furthers the employer's interest - precautions should be taken to prevent employee injuries. For example, companies should ensure that participants in any games or organized sports follow all recommended safety precautions and use protective equipment. One of the most effective safeguards against employee injuries is refraining from serving alcoholic beverages, since alcohol increases the risk of injuries.

With some careful planning, companies can continue providing enjoyable, rewarding gatherings for deserving employees and reduce the risk of liability for injuries an employee may sustain during the festivities.

Author's note: This article should not be construed as legal advice or as pertaining to specific factual situations.

James B. Brown, a director with the Pittsburgh law firm of Cohen & Grigsby, represents management in labor and employment law matters.

COPYRIGHT 1996 Society for Human Resource Management
COPYRIGHT 2004 Gale Group