Worker's Compensation

Its all fun & games until.... Laser Tag & other Lessons in Worker's Compensation

Today the North Carolina Court of Appeals filed an opinion in Holliday v. Tropical Nut & Fruit Co. in which the North Carolina Court of Appeals upheld the North Carolina Industrial Commission's decision to award worker's compensation benefits to an employee injured during company-mandated laser tag.  Yes, I said laser tag.

Courtesy of CBS Entertainment.

Courtesy of CBS Entertainment.

First of all, I know very little about the defendant employer in this case, other than the fact that I want to be them.  They did, after all, REQUIRE laser tag for their employees at their annual conference.  I'm sure this practice of laser tag-teambuilding was a popular event at said conference but my guess is they are re-thinking their coolness. #wompwomp

In Judge Davis's opinion for Holliday, the third element of the North Carolina Worker's Compensation Act is discussed at length: whether or not the injury "arose out of employment."  This is often the element at issue in worker's compensation disputes and will likely remain a hot topic after this decision.  When it comes to out-of-office activities, courts will look at several factors to determine if an injury during one of these activities "arose out of employment:"

  1. Did the employer sponsor the activity or outing?  For example, did the employer pay for employees to attend a conference?  
  2. Were employees required to attend the activity or outingFor example, did the employer schedule the employees to attend the activity or outing or otherwise pay their salary during this time?
  3. Did the employer "encourage participation" in the activity or outing?  For example, did the employer leave out the fact that participation may be voluntary or did the employer take attendance?
  4. Did the employer benefit from the activity or outing? For example, is the employer gaining a market advantage or otherwise benefitting from employee camaraderie?

In Holliday, the employer clearly sponsored the laser tag event since they organized it and paid all relevant expenses.  The employer also "required" attendance by pre-scheduling employees for certain events, such as laser tag, and by making attendance at the conference a mandatory and paid event.  

It is the last two factors that made for great discussion.  Tropical Nut & Fruit (the employer) encouraged participation by not expressly informing its employees that participation was purely voluntarily (read: even though they intended the laser tag to be a voluntary event for employees, they did not expressly state this to employees).  Because of this lack of employee-notice, the Court of Appeals said participation was encouraged.  

Finally, Tropical argued that there was no benefit from the laser tag and that it was in fact used as a fun gesture for employees and nothing more.  However, they noted that it also served the purpose of "putting faces to names" for employees.  The Court of Appeals said that even a "get to know your co-workers" event stood to benefit the employer by boosting employee relations.  Therefore, the fourth factor was also present. 

Before you panic and cancel all your laser tag and team-building events, you should keep in mind that courts consider a lot of factors and look at worker's comp on a case-by-case basis.  There is no need to cancel all the fun stuff but here are some things to keep in mind:

1- Fun should always be voluntary AND you should make this very, very clear to employees.  If you host a laser tag game, bowling tournament, or bar crawl, make it clear that it is VOLUNTARY.  Do not take attendance, do not overly encourage participation (a.k.a don't make it a "come or be fired" event) and tell people its voluntary (hint: using the word "voluntary" is helpful). 

2- Know that employer-sponsored events carry a risk.  If you are sponsoring an event or conference (regardless of where it is located) and you are requiring employees to attend, know that this is likely considered "work" for purposes of worker's compensation.  By accepting this risk from the get-go, you will be well-informed if an injury occurs. 

Fun events are extremely valuable for HR and employee relations.  Don't let this new opinion scare you, just be aware that even fun may come with a price.