Workers' Compensation Gone Awry

Workers' compensation, a creation of statutory law, was intended to make it easier for employees injured while working to receive compensation for lost wages. Injured workers do not have the burden of having to prove that the employer was negligent. As in the area of product liability, it is assumed in workers' compensation law that industry is better able to bear the cost of injuries. In most jurisdictions the injury must be accidental and must arise out of the employment
and be in the course of employment. What does this mean?

The Tennessee Supreme Court recently decided two unusual cases, Gooden v. Coors Technical Ceramic Co.[1] and Wait v. Traveler's Indemnity Co. of Illinois,[2] where this was the issue in an evolving work environment. This article reviews these cases. While state laws may vary, Tennessee has adopted the usual statutory language limiting workers' compensation to "injuries arising out of employment and in the course of the employment." It is important for employers, as well as injured employees, to know their rights under workers' compensation statutes.

Injuries from Recreational Activities

Obviously, it is to an employer's advantage to encourage workers to adopt a healthy lifestyle, in order to improve morale and reduce absenteeism, injuries, workers' compensation claims and health insurance premiums. Accordingly, a number of employers now offer exercise facilities on-site and allow more flexibility during lunchtime and breaks for employees to exercise. Since these activities are recreational and voluntary, one might think that injuries suffered while performing them would not lead to compensable workers' compensation claims. However, in Gooden v. Coors Technical Ceramic Co., the Tennessee Supreme Court recently decided that such was not the case.

In Gooden the Tennessee Supreme Court considered the claim of a widow whose husband had died of an acute myocardial infarction while playing basketball during a break at work. These games occurred several times a week and supervisors often participated. The games were played on the employer's property, and employees were not permitted to leave the premises during their paid work breaks. A number of interested employees had bought the basketball goal and installed it themselves.

Coors Technical Ceramic Company asserted that the games were voluntary and not work-related. Thus, it claimed it should not be liable for workers' compensation. The trial court agreed with the employer's "voluntary" argument and also noted the medical evidence that Gooden could have suffered a myocardial infarction at any time. Thus, the trial court found that "Gooden's death did not arise out of his employment."

When the case was appealed, evidence was presented before the Special Workers' Compensation Appeals panel that the "exertion of the game contributed to the onset of the acute myocardial infarction." Thus, the Tennessee Supreme Court found that the medical evidence supported the claim that playing the basketball game was a contributing factor to the death, and thus the injury arose out of the employment for causation purposes. Then, the court found the issue to be whether the injury occurred in the course of employment. In order to resolve this, it analyzed a number of other cases.

In Clark v. Nashville Machine Elevator Co.[3] the Tennessee Supreme Court had found the test for whether an employee was injured in the course of employment to be whether he was completing an assigned job duty when the injury occurred. Thus, it determined the focus is on the "time, place, and circumstances of the injury."[4] In Blankenship v. American Ordinance Systems LLS,[5] the Tennessee Supreme Court found "an injury occurs in the course of employment 'when it takes place within the period of the employment, at a place where the employee reasonably may be, and while the employee is fulfilling work duties or engaged in doing something incidental thereto'" (quoting Larson's Workers' Compensation  § 12 (2004)).

In the Gooden case, the employer argued Young v. Taylor-White LLC,[6] in which an employee was injured while running a three-legged race at a company picnic. The Tennessee Supreme Court had found this injury to be noncompensable under the workers' compensation statute because attendance at the picnic was voluntary and participation in the race was voluntary. The court then noted that while the "voluntary" nature of the act was emphasized, the Young case should not overturn prior case law with emphasis on "the time, place, and circumstances of the injury," citing Clark v. Nashville Machine Elevator Co.[7]
The court then considered a series of cases in which it had held that injuries occurring during an employee's break and on the employer's property can be compensable workers' compensation claims. Since workers' compensation is a remedial statute, it is to be liberally construed and interpreted to protect workers and their families against economic hardship when work injuries occur.[8] Thus, any doubt in making the determination of whether the injury arises out of the employment should be weighed in favor of the employee.[9]

In Carter v. Volunteer Apparel Inc.[10] an employee was able to recover workers' compensation when she slipped and fell in the break room an hour before she was actually to begin work. The Tennessee Supreme Court, found that this injury should be covered because the employer provided a pre-work break room, was aware that employees arrived early and often had before-work coffee and social breaks. However, in Ward v. Mid-South Home Service[11] the Supreme Court denied benefits to a construction worker who injured his knee playing basketball at the home of a customer during a pause in the construction work being preformed there. The court reasoned that the activity was entered into strictly for entertainment and did not arise out of the employment. In this case the recreational activities did not occur regularly.

An employee in Holder v. Wilson Sporting Goods Company[12] was allowed to recover for an injury that occurred during personal activity during a break. The employee fell in some new snow in the employer's parking lot while on lunch break. Further, the Tennessee Supreme Court found in Drew v. Tappan Company and Aetna Life and Casualty Insurance Company[13] that an employee who fell on the employer's property while en route to his car to retrieve his lunch was entitled to workers' compensation. As the injury arose out of and in the course of his employment, the court reasoned that this type of situation was different than an employee who was injured en route to work. Further, in Kingsport Silk Mills v. Cox,[14] an employee who fell in the employer's building during her lunch break while watching other employees play basketball in a game encouraged by the employer, was determined to be eligible for workers' compensation.

In Seiber v. Moog Auto. Inc,[15] a Missouri Court of Appeals allowed recovery for injuries incurred while an employee played basketball during an unpaid lunch break. In Seiber the employer installed the basketball court and was well aware that employees played regularly. Thus, the injury arose out of the employment for purposes of workers' compensation. The Seiber court noted that its decision would expand the coverage of workers' compensation and make the program more costly to employers. It also recognized that it would have a negative impact on employer-sanctioned recreational activities. The court reasoned however, that the legislature could restrict coverage in the area. Soon after the decision, the Missouri legislature did enact Mo. Rev. Stat.  § 287.120.7, which limits the employer's liability for employees' injuries incurred while participating in recreational activities.[16]

The Tennessee Supreme Court found that Gooden's death occurred as an "incident" of his employment and distinguished this case from Young.[17] The games occurred regularly with the employer's approval. Employees were not allowed to leave the premises during their breaks. Thus, the court found Gooden's death occurred in the course of employment and was compensable.

Injuries Involving Telecommuting

At the time most workers' compensation statutes were enacted, probably no one anticipated the practice of telecommuting, let alone covering injuries that happen to employees who telecommute. The Tennessee Supreme Court recently addressed this issue in Wait v. Traveler's Indemnity Co. of Illinois. Wait worked for the American Cancer Society out of her home office. The employer furnished all office equipment necessary for the home office, and Wait's supervisor and co-workers often attended meetings there.

Ms. Wait had no specific designated working hours, and the employer did not require her to have the public in her home. In fact, Wait kept her home locked and activated her alarm system while working. While on a lunch break at home, Wait was assaulted by a neighbor who she had admitted to her home. She filed for workers' compensation claiming that her injury "arose out of and occurred in the course of her employment."

The Chancery Court granted the defendant's motion for summary judgment and determined that the injury "did not arise out of or occur in the course of employment." The court found that the neighbor, Mr. Sawyer, was not at Wait's house on any business with the employer or Wait. On appeal the Tennessee Supreme Court determined that this injury was in the course of employment because it occurred " '... within the period of the employment, at a place where the employee reasonably may be, and while the employee is fulfilling work duties or engaged in doing something incidental thereto' " (Blankenship v. American Ordinance Systems LLS, quoting Larson's Workers' Compensation  § 12 (2004)).[18] Further, the Supreme Court reasoned that since injuries on the employer's property during lunch breaks are covered,[19] the employee's injuries at her home office were no different. The court reasoned that since the employer had allowed Wait to work at home for more than four years and her supervisor and other employees often came to her home for meetings, the employer could reasonably expect Wait to eat lunch in her kitchen. The employer had not instructed Wait not to answer the door. Further, because Wait was on a personal break it was not unreasonable for her to answer a knock at the door. Under the circumstances, the court reasoned this act would not remove the employee's actions from the course of employment.

However, the Tennessee Supreme Court found Wait's injury to be non-compensable because it did not arise out of the employment. In Tennessee, an injury from an assault is compensable under workers' compensation if it occurs incidentally while the employee is performing a job duty.[20] An injury has to be connected with work or be caused by work activities. The court did not find this to be the case. Wait's injury was not caused by work activities and she was not attacked by a coworker or supervisor. The attack was not personal in nature. Wait's attacker was a neutral third party. The court noted that assaults committed by neutral parties can be connected to work under certain circumstances.

The court then considered the "street risk doctrine" to determine whether Wait's attack by a neutral party was connected with her employment. This doctrine, adopted by the Tennessee Supreme Court in Hudson v. Thurston Motor Lines Inc.,[21] considers employees exposed to the hazards of the street to be at risk in their employment. Wait was not selected by her attacker because of her connection to the employer and was not subjected to hazards from the public because of her employment. Furthermore, Wait was not assaulted while guarding her employer's assets. Thus, the Tennessee Supreme Court determined that her injury was not compensable under the workers' compensation statute.

Conclusions

Employers should be aware that when employees are injured while utilizing exercise or recreational facilities on their premises, they may face potential workers' compensation liability. While there may be certain benefits " e.g., lower health insurance premiums " for employers who encourage employees to pursue healthy lifestyles, they must also weigh the risks. Employers may be persuaded that it is smarter to remove such equipment and facilities in order to avoid potential liability. Moreover, although telecommuting may be advantageous to an employer in terms of reduced overhead and employee expenses, the employer should also realize that it may not escape liability for some injuries occurring at an employee's home.

Of course, employers can always lobby for legislation to limit these two new areas of liability under workers' compensation. After all, workers' compensation is of statutory construction. As technology and work environments change, the law may also change.

Notes

1. 236 S. W. 3d 151 (Tenn. 2007).
2. 240 S.W. 3d 220 (Tenn. 2007).
3. 129 S.W. 3d 42, 47 (Tenn. 2004).
4. Id.
5. 164 S.W. 3d 350, 354 (Tenn. 2005) (quoting Larson's Workers' Compensation  § 12 (2004)).
6. 181 S.W. 3d 324 (Tenn. 2005).
7. Supra at 3.
8. Betts v. Tom Wade Gin, 810 S.W. 2d 140 (Tenn. 1991); Presley v. Bennett, 860 S.W. 857 (Tenn. 1993). See also Joe Loser Jr. 2008), "An Outline of the Workers' Compensation Law in Tennessee," p. 5.
9. Tapp v. Tapp, 192 Tenn. 1, 236 S.W. 2d 977 (1951) Reeser v. Yellow Freight Systems Inc., 938 S.W. 2d 690 (Tenn. 1997). See also by Joe Loser Jr. 2008), "An Outline of the Workers' Compensation Law in Tennessee," p. 75.
10. 833 S.W. 2d 492, 495-496 (Tenn. 1992).
11. 769 S.W. 2d 486, 487(Tenn 1989).
12. 723 S.W. 2d 104, 107 (Tenn. 1987).
13. 630 S.W. 2d 624, 625 (Tenn. 1982).
14. 33 S.W. 2d 90, 91 (Tenn. 1920).
15. 773 S.W. 2d 161 (Mo. Ct. App., 1989).
16. Mo. Rev. Stat.  § 287.120.7.
17. Supra at 6.
18. Supra at 5.
19. Supra at 12, 107.
20. W. S. Dickey Mfg. Co. v. Moore, 347 S.W. 2d 493 (1961). See also by Joe Loser Jr. 2008), "An Outline of the Workers' Compensation Law in Tennessee," p. 80-81.


Patricia S. Wall PATRICIA S. WALL is an attorney and certified public accountant. She received her law degree in 1979 from the University of Tennessee College of Law and her MBA in 1987 from the University of Tennessee (Chattanooga), and Ed.D from Tennessee State University in 2004. She is an assistant professor of business law at Middle Tennessee State University and also has taught accounting and business law at the University of Alabama in Huntsville, St. John’s University (St. Vincent’s College) and Hofstra University. Licensed to practice law in Tennessee and New York, Wall has worked in private practice, as an assistant district attorney, and for the Tennessee Departments of Commerce and Insurance (Securities Division), Employment Security (in several capacities, including General Counsel), Labor (as General Counsel), and Safety.