Filed Under:Markets, Workers Compensation

Injured at employer's holiday party? No workers' comp benefits

The court affirmed the denial of the claims on the basis that the injury had not arisen out of, or in the course of, the worker's employment. (Photo: iStock)
The court affirmed the denial of the claims on the basis that the injury had not arisen out of, or in the course of, the worker's employment. (Photo: iStock)

A North Carolina court has affirmed a state agency’s decision denying an employee’s workers’ compensation claim for injuries sustained at her employer’s annual holiday party, concluding that the injury had not arisen out of or in the course of her employment.

Invited to attend


Melissa Lennon worked as a deputy clerk of court in the accounting division of the Harnett County clerk of court’s office in Hartnett County, North Carolina.

In 2013, Ms. Lennon’s division was tasked with planning the annual office holiday party at the Chicora Country Club in Dunn, North Carolina. During her normal work hours and for which she was paid, Ms. Lennon helped design the invitations and assisted with securing catering and planning the program. She also volunteered to serve as the “emcee” for the event. All employees were invited to attend.

Regardless of whether they attended, all employees were expected to contribute $13 to pay for a gift to the clerk of court and for cleaning up after the party.

A group of private attorneys and their spouses sponsored the party by paying for the cost of renting the venue and the food served to the guests.

Injured entering venue


On the night of the party, as Ms. Lennon was entering the country club, she tripped and fell and suffered an acute nondisplaced fracture of the distal radius of her left wrist, coccyx fracture, and superior glenoid tear of her left shoulder.

Following the accident, Ms. Lennon received short-term disability benefits. She then filed a claim with the county clerk’s office for additional compensation under the North Carolina Workers’ Compensation Act (the “Act”) including for days missed from work, permanent partial disability, and medical expenses.

The office’s insurance carrier denied her claim and Ms. Lennon requested a hearing before the North Carolina Industrial Commission.

Following a hearing, a deputy commissioner denied the claim, agreeing with the office’s assertion that Ms. Lennon had not been injured within the course and scope of her employment and the full commission denied her appeal.

Recreational and social activities


In its decision, the court explained that injuries occurring during recreational and social activities related to employment could fall within the purview of the Act when:

  • They occurred 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, brought the activity within the orbit of the employment; or
  • The employer derived substantial direct benefit from the activity beyond the intangible value of improvement in employees’ health and morale that was “common to all kinds of recreation and social life.”

6 question analysis


The court next pointed out that it had a six question analysis to help to determine whether an injury arose out of employment:

(1) Did the employer in fact sponsor the event?

(2) To what extent was attendance really voluntary?

(3) Was there some degree of encouragement to attend evidenced by such factors as:

a. taking a record of attendance;

b. paying for the time spent;

c. requiring the employee to work if he did not attend; or

d. maintaining a known custom of attending?

(4) Did the employer finance the occasion to a substantial extent?

(5) Did the employees regard it as an employment benefit to which they were entitled as of right?

(6) Did the employer benefit from the event, not merely in a vague way through better morale or good will, but through such tangible advantages as having an opportunity to make speeches and awards? 

Volunteered to host event


The court then rejected Ms. Lennon’s argument that the commission had erred when it had ruled in its finding that her attendance at the party had not been required. It observed that the commission had not determined that hosting duties included attending the party.

The court also was not persuaded by Ms. Lennon’s contention that she had been required to attend the party because she had volunteered to emcee the event, concluding that “[t]he findings of fact of the Industrial Commission are conclusive on appeal when supported by competent evidence, even though there be evidence that would support findings to the contrary.” 

The court then affirmed the commission’s denial of Ms. Lennon’s claims, on the basis that her injury had not arisen out of or in the course of her employment.

The case is Lennon v. N.C. Judicial Dep’t, No. COA16-476 (N.C. Ct. App. Dec. 6, 2016).

Related: 7 tips to reduce holiday party liability for employers

Originally published on FC&S Legal: The Insurance Coverage Law Information Center. FC&S Legal is
the industry's ONLY single-source, comprehensive portal developed specifically for insurance coverage law professionals. To find out more, visit www.fcandslegal.com. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

This article is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice is required, the services of a competent professional person should be sought.

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