TENNESSEE SUPREME COURT CLARIFIES WHEN AN EMPLOYEE'S INJURY AT A COMPANY-SPONSORED RECREATIONAL EVENT IS COMPENSABLE

by J. Bartlett Quinn & Charles D. Lawson

It’s that time of year again.  A time for coming together with family, friends and, yes, even co-workers, to celebrate the holiday season.  This year, the Tennessee Supreme Court has given Tennessee employers a gift, of sorts, in the form of a decision limiting the liability of employers for injuries sustained by employees at employer-sponsored recreational events. 

Specifically, on October 20, 2005, in Young v. Taylor-White, LLC, 2005 Tenn. LEXIS 853 (Tenn. 2005), the Supreme Court held that an injury sustained by an employee while participating in a company-sponsored event is not compensable under Tennessee’s workers’ compensation law unless the employee’s attendance was required by the employer.  This decision is important because it establishes a clear standard for determining when an injury occurring during an employer-sponsored recreational event will be considered work-related and therefore compensable.   

Facts
In Young, the defendant employer sponsored a company-wide picnic for its employees.  The picnic was held outside of work hours at a public park away from the employer’s premises.  The employer provided food, music, recreational games, door prizes, and other prizes for the winners of certain games.  Those employees who were in attendance at the event were encouraged to participate in the recreational games.  Neither management nor employees were required to attend the picnic. 

The plaintiff, Phyllis A. Young, fell and injured her shoulder while participating in a three-legged race, one of a number of contests offered by the employer at the picnic.  As a result of the injury, Young received medical treatment, including surgery, and was required to be off work for approximately four months.  After her return to work, Young continued to experience difficulty with her injured shoulder. 

Young ultimately sued her employer for workers’ compensation benefits, alleging that the shoulder injury arose out of and in the course of her employment.  The trial court found Young’s injury to be compensable under Tennessee’s Workers’ Compensation Law and awarded benefits.  In so finding, the trial court relied on the “Larson test.”   The “Larson test” is set forth in 2A Larson & Larson, Workers’ Compensation Law § 22.01 (1997).  According to Larson’s authoritative treatise, recreational or social activities occur within the course of employment when: 

• They occur on the premises during a lunch or recreation period as a regular incident of the employment; or
• The employer, by expressly or impliedly requiring participation, or by making the activity part of the services of an employee, brings the activity within the orbit of the employment; or
• The employer derives substantial direct 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. 

Id. at § 22.01.¹   Applying the Larson test, the trial court concluded that, while Young may not have been “required” to attend the picnic, once there, she had been encouraged and induced to
participate in the three-legged race, making compensability proper. 

On appeal, the Tennessee Supreme Court reversed the trial court’s ruling and rejected the Larson test as a rule for resolving all cases involving recreational injuries.  The Court declared that the proper approach to determining compensability for injuries arising in such a context was simply to ask whether attendance at the company-sponsored event was required or voluntary.  The Court held that neither mere enjoyment nor the offer of a nominal prize is enough to transform what would otherwise be a voluntary activity into one within the course of employment.  Based on Young’s acknowledgment that attendance at the picnic and participation in the recreational events were voluntary and that she would have suffered no employment consequences for declining to participate, the Court held that her injuries did not occur in the course of her employment and were therefore not compensable. 

Conclusion
The decision in Young is instructive to Tennessee employers who wish to sponsor recreational events for their employees while minimizing their risk of a workers’ compensation claim at such an event.  In addition to ensuring that the events are held outside normal working hours and at a location away from the company premises, employers should ensure that attendance at the company-sponsored event is completely voluntary.  This can be accomplished by including in any notice regarding the event a simple statement that attendance at the event in question is not in any way mandatory. 

If you have any questions about this article or would like more information regarding the Young decision, please do not hesitate to contact a member of our Workers' Compensation Group. Happy Holidays!

Charles D. Lawson
(423) 757-0270
clawson@cbslawfirm.com
 
J. Bartlett Quinn
(423) 757-0205
bquinn@cbslawfirm.com

¹The Tennessee Supreme Court has never explicitly approved the Larson test, but two Special Workers’ Compensation Appeals Panels applied it in resolving cases involving recreational activities.  Segears v. Liberty Mut. Ins. Co., 1996 WL 164453, *3 (Tenn. Workers’ Comp. Panel 1996) (holding injury sustained by employee while playing volleyball at company picnic was compensable where employee testified that his employer told him he expected to see him there and requested three times that he play volleyball); Tucker v. Acme Boot Co., Inc., 865 S.W.2d 703, 705 (Tenn. Workers’ Comp. Panel 1993) (holding employee’s injury sustained while playing softball on company team was not compensable).