Injury Incurred during Post-Meeting Informal Company Recreation Is Not Subject to Workers' Compensation Coverage despite Employee's View That Participation Was Encouraged and Important to Career. (Recent Court Decisions)

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Appeal of Kraft Foods, Inc., 147 N.H. 572, 794 A.2d 779, 2002 N.H. LEXIS 28 (New Hampshire Supreme Court, April 15, 2002)

The New Hampshire Supreme Court recently issued an opinion that serves as an advisory to employees who feel that company outings are "command performances" and undoubtedly spurs a sigh of relief from employers, who frequently sponsor or support sporting events or other recreational outings that are thought to build team spirit or serve as perquisites of the job but are not closely supervised by the company.

Kraft sponsored a company outing in early 1999 at the Waterville Valley Conference Center. Kraft employee Claire Connors attended several mandatory meetings on Friday, January 15 and during the morning of Saturday, January 16. Beginning Saturday afternoon, the respondent was free to attend several optional seminars, go on a sleigh ride, or enjoy free time with her family. On Saturday evening, the petitioner (Kraft) provided several optional recreational events for its employees. On Sunday, the respondent (Connors) had her choice of "winter entertainments" provided by the petitioner, including sleigh rides, skating, and downhill or cross-country skiing. The respondent was also free to do nothing or to leave once Saturday's mandatory meetings concluded. The respondent opted for cross-country skiing on Sunday and a sleigh ride on Monday with her regional director. The respondent broke her right fibula while cross-country skiing on Sunday. See 2002 N.H. LEXIS 28 at *1-*2.

Connors missed two months of work and applied for workers' compensation benefits. A state Department of Labor hearing officer rejected her claim, but on appeal to the hearing board, benefits were awarded. The Supreme Court reversed, finding that the skiing injury was too attenuated from the employee's job responsibilities. The Court based its finding on what it regarded as fairly clear statutory guidance from the state legislature, which provided:

Notwithstanding any law to the contrary, "injury" or "personal injury" [within the meaning of the workers' compensation law] shall not mean accidental injury, disease, or death resulting from participation in athletic/ recreational activities, on or off premises, unless the employee reasonably expected, based on the employer's instruction or policy, that such participation was a condition of employment or was required for promotion, increased compensation, or continued employment.

See 2002 N.H. LEXIS 28 at *4, quoting New Hampshire Rev. Stat. Ann. 281-A:2.

Connors contended that she thought her employment career at Kraft would be enhanced by participation in the recreational activities. Although the hearing officer rejected this argument, the Review Board accepted it. The Court reversed, despite the standard administrative law canon that courts grant substantial deference to the reviewing agency charged with implementing and enforcing a statute. The Court found the Board's view of the statute clearly erroneous, enabling it to reverse the board without violating the standard deference accorded an administrative agency.

According to the Court, the statute requires more than an employee's reasonable belief that participation in recreational activity would be helpful to the employee's career. Rather, the employee must have a reasonable belief that participation in the activity is a condition of employment. Based on the facts of the incident, the Court found that Connors simply was not sufficiently coerced into participating in the cross-country ski outing to make it a condition of employment ("[t]here is no evidence in the record to indicate that participation in recreational activities was a condition of employment, promotion, increased compensation or continued employment"). See 2002 N.H. LEXIS 28 at *7.

The Kraft case makes sense not only from a statutory interpretation standpoint but also from an insurance efficiency standpoint. …