Worker’s Comp v. Non-Sponsored Recreational Activities: Who Wins?

April 10, 2018

With the arrival of spring comes the beginning of softball league season. If a business supports a team that their employees play on and an employee gets hurt, should the employee be entitled to receive worker’s compensation? This is an issue that recently came before the Delaware Superior Court in Morris James LLP v. Weller. The first time this case was before the court in early 2017, on appeal from the Industrial Accident Board (Board), the court reversed and remanded the Board’s decision that the injury took place within the course and scope of the claimant’s employment. On remand, after applying the correct law, the Board came to the same ultimate conclusion. The Board’s decision was appealed a second time and on March 29,2018, the Delaware Superior Court again reversed the Board’s decision and found that the Board’s decision was not supported by substantial evidence and was not free from legal error.

William Weller was a paralegal at Morris James LLP and a member of the firm’s softball team.  The firm has had a softball team since the 1970s. The firm pays for the jerseys, bats, and meals after each game, which amounts to approximately $5,000 per year. The firm signs the liability agreement so that the team can practice on local softball fields. The team competes against other teams in the Wilmington Lawyers’ Softball League.

On June 10, 2015, the softball team’s manager, and Weller’s colleague at the firm, asked Weller to retrieve the cooler and purchase beverages for the team’s game that evening.  In order to do so, Weller left work about a half hour early that day. The firm allowed Weller to leave early for softball or personal reasons if he requests permission.  It was during that evening’s game that Weller suffered a ruptured Achilles tendon. Weller required surgery and was out of work for approximately three months.

The firm’s controller, and manager of the softball team, suggested to Weller that he submit a claim to the firm’s worker’s compensation carrier. Weller did so and the carrier denied the claim. Weller then petitioned the Board to determine whether or not he was entitled to worker’s compensation coverage for his injury. The issue before the Board was whether Weller’s injury occurred within the course and scope of his employment with the firm.

First Board Decision – April 18, 2016

On April 18, 2016, the Board decided that Weller’s injury occurred within the course and scope of his employment.  In reaching this outcome, the Board applied the four factor test set forth in Larson’s Worker’s Compensation Law § 22.04[4][b]-[d]: (1) the time and place factor; (2) the degree of employer initiative; (3) financial support and equipment furnished by employer; and (4) employer benefit from company team.

The Board found that the firm: “probably obtains a benefit through increased productivity of the players by having the firm team in the softball league”, and that the firm’s “willingness to accept liability for on field incidents” shows a “modicum of initiative or control” such that that activity is within the course and scope of Weller’s employment. Weller v. Morris James LLP, No.1429339, 12-13 (Del. I.A.B. Apr. 18, 2016). The Board also considered that even though the game took place after work hours, Weller “was allowed to leave work early to purchase beverages for the game when he was the manager of the team.”  Id. at 12. Morris James appealed the Board decision.

First Superior Court Decision – March 16, 2017 – 2017 WL 1040713

On appeal, the Delaware Superior Court pointed out that there is one set of factors to be applied if the activity is a company-sponsored recreational event. These are the four factors set forth above from Larson’s treatise and were applied by the Board. There are a different set of factors to be applied if the activity is a non-sponsored recreational event, known as the Dalton factors, from State v. Dalton, 2005 WL 148770 (Del. Super. Jan. 20, 2005), aff’d, 878 A.2d 451 (Del. 2005). Despite the Board’s finding that the Wilmington Lawyers’ Softball League, not the firm, sponsored the softball games they incorrectly applied the four Larson’s factors instead of the Dalton factors.

The Dalton factors also originate from Larson’s and sets forth the following standard for the court to consider when determining whether a non-sponsored event occurs within the course and scope of employment:

(1) it occurs on the premises during a lunch or recreation period as a regular incident of employment; (2) the employer, by expressly or impliedly requiring participation, or by making the activity part of the services of the employee, brings the activity within the orbit of the employment; or (3) the employer derives substantial direct benefit from the activity beyond the intangible value of improvement in employee health and morale that is common to all kinds of creation and social life.  Larson’s at §22.01.

The court reversed the Board’s decision and remanded to the Board for application of the correct law. In doing so, the court also made a special note that it takes more than an intangible benefit to satisfy the third Dalton factor.

Second Board Decision – August 1, 2007

On remand, the Board found that Weller satisfied the second and third Dalton factors, and therefore, his injury occurred within the course and scope of his employment.  Specifically, with regard to the second factor, they determined that there was sufficient pressure put on employees to play softball such that it became an employment related activity. To support the third factor, the Board relied on (1) testimony from the firm’s Executive Director that the firm benefitted from increased productivity, and (2) non-employee vendors who could provide a benefit to the firm were allowed to play on the team. The firm appealed also appealed this decision to the Delaware Superior Court.

Second Superior Court Decision – March 28, 2018 – 2018 WL 1611267

On appeal of the Board’s second decision, the Delaware Superior Court found that the Board committed legal error when it misapplied the second Dalton factor.  The Board incorrectly analyzed the second factor to determine whether softball was an employment related activity, instead of whether it was within the orbit of employment.  Even so, the court held there was not substantial evidence to support a conclusion that the firm brought softball within the orbit of employment. In its analysis of the second factor, the Board focused on team members’ subjective feelings of pressure to play on the team. The court points out, however, that the Dalton factor focuses on the actions of the employer in determining whether the activity is within the orbit of employment, not the feelings of the employee.  Pressure to participate in softball is insufficient to establish that softball was a required activity within the orbit of employment.

With regard to the third Dalton factor, the Delaware Superior Court finds that there was not substantial evidence to show that the firm received a substantial direct benefit from softball. In response to the Board’s reliance on testimony from the firm’s Executive Director, the court finds that the Board did not consider the testimony in the correct context. In context, the court views the testimony regarding increased productivity to be more aspirational than factual.  Additionally, the court found that there was no evidence in the record to support the Board’s finding that vendors on the softball team provide a business benefit to the firm. The court said the Board’s conjecture is not substantial evidence.

The Delaware Superior Court reversed the Board’s decision due to legal error and its lack of substantial evidence to support its decision.

Image source: Action Images via REUTERS

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