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Holiday Party Claims: Yea or Nay?

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By: Marcus Rodriguez, Associate, Orlando

The holidays–we all love when the time of year comes around for end of year parties and company functions. Now that the season is over, the claims for compensability may be rolling in. While many understand that workers’ compensation policies protect employees who are injured within the course and scope of employment, many do not consider the potential for a claim that could result from a holiday party. While the main purpose of these gatherings is to enjoy oneself, determining whether or not an injury sustained at a holiday party should be compensable can be a bit of a gray area.

FS 440.092 requires that a social activity be expressly mandatory and produce a substantial direct benefit to the employer. However, the benefit must go beyond improvement of employee health and morale that is common to all kinds of recreation and social life.

A function that takes place in the middle of the work week and on the employer’s premises will likely fall within the course and scope. The parties that do not fall within that category raise more questions. If the employer does not expressly make attendance mandatory at parties, then the 1st prong is not met and coverage likely will not apply. However, the 2nd prong can be tricky. If the party has clients in attendance and any type of business meeting takes place, then this may satisfy the benefit requirement, and an accident occurring at the party may be compensable. If the gathering is just a casual happy hour, gift exchange, etc., then courts may not consider this to be an activity going beyond the improvement of morale. It is important to remember that the intoxication defense will apply if the employer has provided the alcohol (acquiescence).

In Roberto L. Cintron Ayala v. EZ Corp. Inc./ACE USA OJCC 14-003143WJC, a 2014 case handled by our very own Morgan A. Indek, Esq., the JCC found that although the claimant suffered an “accident” as defined by 440.02(1) while dancing with his boss at a company Christmas party, the resulting left knee injury did not occur within the course and scope of employment. The party was offsite at a “Bahama Breeze” restaurant, the employees were not paid to be there, nor were they punished for not attending. Therefore, the expressly mandatory prong of 440.092 was not met. As for the 2nd prong, the JCC found that “the dinner event was for fellowship and show of appreciation to the employees for the work they had performed. It was designed to maintain good employee morale.” Therefore, the court found that the employer did not receive “a clear and tangible financial benefit from the event beyond that (morale) which is the claimant’s burden to establish.” Id.

Some factors to consider when trying to navigate these waters may include: (1) whether the employer in fact sponsored the event, (2) to what extent attendance was voluntary, (3) the degree of encouragement to attend, (4) whether the employer financed the party, (5) did the employees consider it a benefit, and, (6) whether the employer benefited from the event, even if merely having an opportunity to make speeches and present awards.

Although these holiday gatherings are often meant for only social benefits, workers’ compensation coverage may apply for incidents that occur.