What Happens When an Employee is Injured at a Company Event?

These days companies often sponsor athletic events, fundraising events, parties, picnics, retreats and other types of programs for their employees. If an employee is injured at such an event, there is a possibility the injury could be compensable under the N.C. Workers’ Compensation Act.

The main issue in these cases is whether the injury arises out of the employment of the injured worker. In assessing these cases, the general rule is that an injury does not arise out of the employment and thus is NOT compensable if:

• An employer provides for an outing for employees
• And invites them to attend
• But does not require them to do so
• And the employee is injured while participating in the outing.

At this point, the law with respect to these “Fun Day” cases, as they are called, is still evolving. In the cases that have addressed this issue, the courts’ decisions seem to focus on whether attendance at the “Fun Day” was voluntary, or whether it was required by the employer.

In Chilton v. Bowman Gray School of Medicine, the North Carolina Court of Appeals adopted a list of relevant factors to consider in assessing whether compensation is warranted when an employee is injured at an employer’s recreational event.

The factors are listed below:

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:
   • taking record of attendance;
   • paying for the time spent;
   • requiring the employee to work if he did not attend; or
   • 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 and good will, but through such tangible advantages as having an opportunity to make speeches and give awards?

The most recent case to use the Chilton factors was Frost v. Salter Path Fire & Rescue. The Frost court recognized that Chilton had “provided a helpful mode of analysis” and that the factors cited in Chilton “may serve as helpful guideposts.” However, the Frost court later noted that the Chilton factors were not controlling. Because these cases tend to be very fact specific, it is best to check with your attorney to determine the compensability of an injury sustained by one of your employees.

Practice Tip: Employers, Adjusters and Risk Managers should look for and investigate each of the Chilton factors when faced with claims arising out of injuries which occur during company-sponsored events to determine whether they bring the employee’s injury within the course and scope of employment.

If you have questions, contact me directly at 704-940-3442 or jsimmons@cshlaw.com.