Appellate Division Denies A Worker’s Compensation Claim Based On The Recreational/Social Activity Exception Of The NJ Worker’s Compensation Act. Tips For Employers Planning Summer Activities

In an unreported decision released on June 8 the Appellate Division denied a petitioner’s claim for workers compensation benefits for injuries she sustained in a post-holiday party motor vehicle accident. On Friday, December 23, 2016, respondent, F&B Garage Door (F&B) hosted its annual holiday party at a local restaurant. F&B’s owner, Frida Ferrera, (Ferrera) held the parties to thank F&B’s employees for their hard  work throughout the year. Only employees attended; no clients, business associates or vendors were invited. The petitioner, Viridiana Regalado was an office manager for  F&B.

As she had in the past petitioner invited her brother to the party, neither of whom drove, so Ferrera agreed to arrange transportation. After the party ended the petitioner and her brother left in a vehicle owned by Elka Martinez, a friend of Ferrera who had also attended the party but was not an employee, and Ferrera. Ferrera drove the vehicle to her own home, and after exiting the vehicle Martinez drove. Shortly thereafter the vehicle was in an accident causing serious injuries to petitioner.

Petitioner filed a Claim Petition for Workers Compensation benefits. Respondent filed an answer denying petitioner was in the course of employment at the time of the accident, and the matter proceeded to trial. Three evidentiary hearings were held. Following the hearings the Judge of Compensation found petitioner not to be credible, finding portions of her testimony to be contradictory  and inconsistent on the key issue of whether attendance was mandatory, as petitioner alleged. For example, she testified that she would not receive a bonus if she did not attend (they were handed out several days before the party,) but also testified that she would not have attended unless transportation was provided. Respondent’s witnesses were found to be consistent, straightforward and credible.

In denying her claim the Judge applied the two-prong test of N.J.S.A. 34:15-7, which requires that in order to prevail in a claim for injuries associated with a recreational or social activities, such as the holiday party in question, there must be proof that “…such recreational or social activities are a regular incident of employment and produce a benefit to the employer beyond improvement in employee health and morale,…” Based on the testimony the Judge found that neither prong of the test was satisfied. There was no benefit to the employer beyond improving  employee morale, nor was there any evidence that employee attendance was mandatory.

While this is an unreported decision it comes at a time when many employers may be planning summer activities for their employees, especially with areas “loosening up” after the pandemic lockdown. In planning these activities avoid anything which might create the impression, however slight, that attendance is expected. For example, don’t hand out bonuses at such an event, as petitioner falsely alleged. Avoid any actions which bring daily business of the employer into the party. Also, if an activity is solely for employee morale, care should be taken not to invite important clients, etc., whose presence might give the impression that the employees must “show the flag,” so to speak, to make a good impression on the client. In these situations, keep business and pleasure separate!

By: Alfred P. Vitarelli, Associate at Brown & Connery, LLP