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Play ball! But prevent legal risks at company activities

by on
in Compensation and Benefits,Employment Law,Human Resources

Used this story in HR Weekly e-letter -- July 23, 07. Posted on site for one week starting that day.

Say your marketing director breaks his leg during an after-hours employee softball game against a cross-town company. Who's responsible? You'd be surprised.

Courts are very likely to say your organization is on the hook for workers' compensation if the team and the event is closely aligned with your company.

This isn't an academic discussion: The issue comes up often when employees are injured (or are accused of harassment) at events that the organization views unconnected to the company.

A few years ago, such a dispute bubbled all the way up to the New Hampshire Supreme Court. In the end, the court awarded workers' comp to an employee injured during an off-hours corporate softball game because the team was part of the company's "cultural climate." (Appeal of James Cooper, No. 94-635)

Whether your organization is liable depends largely on this question: To what degree did your organization sponsor the event?

If you gain some benefit from the activity, say, in the form of publicity, any injuries or liability arising from such activities is compensable. If the company/activity connection is less clear, the liability issue becomes a case-by-case decision, focusing on factors such as how much control the organization had over the event and whether it was on your premises.

When employer liability is in question, courts tend to side with employees. But while case law tends to swing toward employees, some states have passed laws addressing the subject.

Several states follow California's approach. It says employees can't win compensation for injuries occurring from voluntary participation in off-duty recreational, social or athletic activities unless the employer "expressly or impliedly" requires them.

4 ways to play it safe

To avoid workers' comp liability in such cases, draw a clear line dividing the activity from your organization's involvement. Here are four ways to achieve this goal:

1. Hold the event off premises. That will help eliminate any implication that company work is occurring before, during or after the activity.

2. Make it clear that participation is voluntary. In fliers, e-mails or other communication about the event, remind employees that they're not obligated to participate.

3. Notify employees that they're off duty during the hours the event takes place. Tell them that they're free to leave whenever they wish.

4. Check your organization's insurance coverage, and consider buying so-called "special events" coverage, if necessary.

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