By Michelle Daum Haskins and Megan Walawender

    As the weather gets warmer, many employers plan company-sponsored recreational events, such as picnics, softball games or other team-building activities. These employer-sponsored events may positively affect an organization’s bottom line by increasing morale and retention. However, employers should take appropriate steps to minimize liability when hosting social events.

    Generally, an employer faces liability for employee conduct when that conduct is “within the course and scope of employment.” To be considered “within the course and scope of employment,” the employer must either require or expect employees to attend, or the employer must endorse a recreational event and “conceivably” benefit from the event.

    When would an employer “conceivably” benefit from an event? The answer depends on the event. For example, courts have found that employers do not benefit from social events if the event is not mandatory and the sole purpose is to increase morale. However, courts have found that employers benefit from events where employees receive service awards, sales and retention programs are promoted, and customers and vendors attend.

    Once a social event is found to be “within the course and scope of employment,” an employer may face liability in areas such as employment discrimination, workers’ compensation and liability to outside parties.

Employment Discrimination and Harassment
    Employers may be liable when an employee acts inappropriately toward a member of a protected group, even if the conduct takes place on a golf course, at a park or a resort. Additionally, employers face potential liability when a non-employee harasses an employee because of that employee’s membership in a protected class. For example, if at a vendor’s golf tournament, a non-employee harasses an employee based on race, management must be ready to appropriately address the inappropriate behavior.

    Prior to planning a social event, employers should consider whether that event would create a situation where discrimination or harassment are more likely to occur. For example, tag football may result in unwanted touching. By selecting gender-neutral activities, employers can avoid these issues. Additionally, serving alcohol at a company-sponsored event may increase the likelihood of harassment, whether based on sex or another protected group.

Potential Workers’ Compensation Issues
   Most states have specific laws that address whether employees can recover payment for an injury sustained during recreational activities.

   Generally in Missouri, an employee cannot recover workers’ compensation benefits for injuries sustained while participating in an event that the employer “promoted, sponsored or supported,” such as sponsoring a company softball team or promoting a company goal for blood donation. There are exceptions, however. If the worker was ordered to participate or was paid wages or expenses while participating, then the employee may receive benefits. Additionally, employees may recover if the injury happened on the employer’s premises, the premises contained a known unsafe condition, the employer knew employees were participating in the activity or the employer failed to stop the activity or fix the unsafe condition.

   A Missouri court recently found that an employee injured while playing a break-time basketball game on the employer’s premises was entitled to benefits. The court found that the injuries were compensable because the employer required employees to remain on premises during paid breaks and allowed employees to play basketball to improve morale.

   Kansas law is more concise: injuries occurring during recreational or social events are not the employer’s responsibility unless the employee had a duty to attend and the injury was caused by either performing tasks related to job duties or performing employer-instructed tasks. Recently, a Kansas court determined that an employee who twisted her knee during an employer-sponsored dance contest was entitled to benefits. The dance contest was one of the various employee-incentive programs allowing employees to earn prizes, vacation time and cash. The court determined that the employee was entitled to recover payment because the dance contest was “organized, announced and supervised” by the employer on company premises during regular working hours. Employees were paid normal wages during the activity and, while not required, participation was encouraged. The court noted that the primary purpose of the contest was business-related, i.e., motivating employee retention and energizing the sales force.
 
Liability to Others
    Depending on the particular circumstances and state law, employers may face liability for negligent acts of an employee at a social event. For example, an employee takes clients to a Kansas City Royals game. After drinking too much while tailgating, the employee causes an automobile accident. There may be some risk of liability on the employer because the purpose of the event was to foster the client relationship.

   Finally, employers may face liability for employees attending outside events. For example, an employer who requires employees to attend a golf tournament sponsored by a customer may be liable if the employee commits an actionable intentional or negligent act. Courts have found that the employer is liable because it stands to benefit from the customer’s goodwill generated by the employees’ attendance.

   Recreational and social events have value to a business in terms of employee morale and retention. A prudent employer will be cognizant of the risks that are a part of those activities and proceed in light of that knowledge.

Michelle Daum Haskins and Megan Walawender are attorneys with the law firm of Constangy, Brooks & Smith, L.L.C., exclusively representing management in labor and employment law issues. Haskins is a member with the firm, and her practice focuses on representing employers in defending workers’ compensation claims. Walawender is an associate in the litigation group, working to help employers ensure compliance with employment laws. You can reach either of them at (816) 472-6400 or and .