BuildRight Construction, a family-owned company, hosted its annual employee appreciation picnic—a casual weekend event meant to boost team spirit. Attendance wasn’t officially required, but everyone was strongly encouraged to join, including David, one of the company’s best carpenters.
During a friendly volleyball match, David jumped to block a shot, landed awkwardly, and suffered a severe ACL tear—an injury requiring surgery and months of rehabilitation. Given that this was a company-sponsored event, David and his employer assumed it would be a straightforward workers’ compensation claim.
They were wrong.
The Legal Twist: Coverage Denied
When the claim was filed, the insurance company delivered an unexpected blow: denied coverage. Their reasoning was precise and purely legal: the injury did not “arise out of and in the course of employment.”
The insurer argued that:
- The picnic was optional,
- It took place on a Saturday, outside normal work hours,
- And it was held off-site in a public park.
Therefore, the event was considered a purely social activity, unrelated to the performance of David’s job duties.
The Legal Standard That Changes Everything
In many U.S. states, for an injury at a company-sponsored social event to be covered under workers’ compensation, the employee must prove one of the following:
- Attendance was explicitly or implicitly required, or
- The employer received a direct, substantial business benefit from the event—something more than simply boosting morale.
These criteria became the key to David’s case.
The Legal Battle… and Turning the Tables
David hired an attorney specializing in workers’ compensation. The lawyer argued that:
- Attendance was implicitly required—employees were expected to show up to be seen as “team players.”
- The company derived a significant business benefit by improving team cohesion, communication, and productivity.
After hearings and legal arguments, the workers’ compensation judge ruled in David’s favor. The insurer was ordered to cover:
- All medical expenses
- Lost wages
- Post-surgery rehabilitation
The Lesson for Employers and Employees
For Employers:
Before hosting any company event, consult your insurance broker and legal counsel. If you want the event to remain purely social, state clearly in writing that attendance is voluntary. Avoid discussing business goals or handing out performance-related awards during such gatherings.
For Employees:
If you suffer an injury during a company-sponsored function, do not assume it’s not covered. Document everything—emails, messages, or conversations encouraging attendance. And if your claim is denied, speak to a workers’ compensation attorney immediately.
Why This Matters
Events meant to boost morale can unexpectedly create legal liability. The line between “work-related” and “social event” can be thin—and extremely important.
