Liability questions

What happens when an employee is hurt at a company outing?

By Todd Shryock

With the arrival of summer, many companies gear up for the annual summer picnic. It’s supposed to be a fun event, a general morale booster where employees can get to know each other better.

But what if something bad happens? What if an employee is injured during the volleyball game and has to take time off of work? What if someone has too much to drink and causes an accident on the way home? Who’s liable?

These are questions that deserve a serious look before an incident occurs. The answers can help you formulate a plan to avoid injuries and expensive lawsuits.

Who gets blamed?

There are a number of ways a business can end up losing when it comes to liability issues. If an employee breaks an ankle rounding third base, the company is probably the one to be called “out.”

“There is the potential for workers’ compensation exposure,” says Michael Ossip, a partner in the labor and employment law section of the Philadelphia office of Morgan, Lewis & Bockius. “The law varies from state to state, but it’s likely the company will be liable for this injury under workers’ comp. The employer may argue that this was a voluntary, offsite event, and they were off duty. The courts have said it may have been ‘voluntary,’ but if the employees are encouraged to go, or it’s suggested they go, then it falls within their course of employment.”

The courts say these voluntary outings are directly beneficial to the company because they promote camaraderie and improve morale. As a result, if someone is injured they can bring a successful workers’ compensation claim against the company.

Even more hazardous to a business is the consumption of alcohol at company events. A cooler full of beer might help everyone relax, but what if someone isn’t responsible?

“If the company is serving beer, and someone gets inebriated and smashes up their car and causes injury to someone else, then the injured party is probably going to track down the deep pockets,” notes Ossip.

Companies must be extremely careful if they choose to serve alcohol. The best thing to do is not serve it at all, but if you choose to do so, keep a careful watch on those drinking. You might try issuing drink tickets to each employee, which would limit the amount they could consume, or provide transportation to and from the event to lessen the risk.

There are some factors that can lessen an employer’s exposure to lawsuit claims. If the event is held onsite during normal business hours, there’s no argument that the event wasn’t part of work. But if the event is held offsite, the employer can argue it wasn’t required and the company is less liable for the conduct or behavior of its employees. While this won’t completely protect a company, it can lessen the potential damages.

Another option is to let someone else, such as a restaurant, serve the alcohol. Again, this isn’t absolute protection against any lawsuits, but it does move the company one step further from a potential accident.

“You really have to be careful if you’re going to serve alcohol,” Ossip warns again. “If you’re going to serve, make sure it is served in moderation. Make sure there is a mechanism in place that if they are not in the proper state of mind, they don’t get more. These events don’t need to be canceled, because they are a great way of improving morale. Employers just need to realize it subjects them to liability and they need to use some common sense.”

Other hazards

Another issue employers need to be aware of is the potential for sexual harassment. With events usually taking place outside the office, people tend to be more casual. The dress is relaxed, the attitude is more casual and when you mix in alcohol, people tend to do and say things they normally wouldn’t. This behavior can make some employees uncomfortable and could lead to sexual harassment claims.

Employers should also be aware that a company-sponsored team in a softball or volleyball league can, in some circumstances, cause liability or workers’ comp problems, depending on how much involvement the company takes in the team.

If a group of employees organizes a team on their own, there’s not a lot of risk.

“If a company fields a team entry in an industrial league, pays for the hats, jerseys and softballs, then they are building steps that could expose them to liability,” says Ossip. “If the injury occurs on the company field maintained behind the building, or all the executives play and employees feel pressured to play, the greater the risk. The more direction the company has in the process, the greater the chance it will be liable either for workers’ comp or negligence.”