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In 1979 the New Jersey legislature adopted a change to N.J.S.A. 34:15-7 to add that recreational and social activities are not compensable unless the injured worker could prove that the activity promoted a benefit to the employer beyond improvement of health and morale. Prior Supreme Court cases have already made clear that if an employer compels attendance at a social or recreational event, then an injury during a social or recreational activity will be found to be compensable. But it has taken over 40 years for a case to get to the Supreme Court which defines what constitutes a social and recreational activity in the first place, and what sort of activities satisfy the standard of proof of a benefit beyond improvement of health and morale. Last week’s Supreme Court decision in Goulding v. NJ Friendship House, Inc., (A-48-19) provides very helpful answers.
The key facts are simple. Goulding was an employee of North Jersey Friendship House, Inc., which is a non-profit that assists individuals with developmental disabilities. She worked Monday to Friday as a chef/cook, and she cooked meals for Friendship House’s clients, as well as teaching vocational classes.
Goulding was injured on Saturday, September 23, 2017 when Friendship House hosted its first “Family Fun Day.” It planned to host this event annually going forward. The stated purpose of the event was to offer a fun and safe environment for the clients of Friendship House and their families. As such, Friendship House asked for volunteers to work the event. Employees were under no obligation to attend the event. Goulding volunteered.
Goulding arrived between 8:30 and 9:00 a.m. and started setting up for breakfast. After breakfast was concluded, she began preparing for lunch. She injured her ankle when she stepped in a small pothole in the parking lot and fell. Several people assisted her in getting up and helping her ice her foot. She continued working, helping the other cooks prepare lunch. She never participated in any of the games or activities at the event, and she left around 2:30 p.m.
A claim petition was filed as well as a motion for medical and temporary disability benefits. Goulding sought surgery to repair her injured ankle as well as temporary disability benefits from the date of her injury. Both the Judge of Compensation and the Appellate Division found against petitioner. The Judge of Compensation ruled that Family Fun Day was a social and recreational event. The Judge found that there was no proof that this event “was a regular incident of employment.” The Judge observed that petitioner volunteered to participate and was not pressured to do so. Finally, the Judge found that there was no proof of a benefit to Friendship House beyond improvement of health and morale. For much the same reasons, the Appellate Division affirmed.
The New Jersey Supreme Court granted certification. Goulding argued before the Supreme Court that she was there to work and was never engaged in any recreational or social activities. She also argued that even a first annual event can be considered to be a regular incident of employment. She added that there was a benefit beyond improvement of health and morale for Friendship House because the event furthered the mission of the non-profit in providing services to clients and their families.
For its part Friendship House argued that the law does not apply to those who truly volunteer and have no expectation of financial consideration. Friendship House also argued that this situation was unlike those cases where the Supreme Court found coverage because an employee was compelled to perform some task. There was no compulsion in this case. Finally, Friendship House argued that this was not a fundraiser and there was no benefit to Friendship House beyond improvement of health and morale.
The Supreme Court first observed that just because an activity is non-compulsory does not mean that it must be considered a social or recreational activity. The Court found that Goulding was working at the event and as to her, the event was not a social or recreational activity. The Court said, “In contrast to prior cases where the employees were participating in the social or recreational activity – playing softball, golfing, or attending a picnic – Goulding was facilitating Family Fun Day by cooking and preparing meals for clients of Friendship House, just as she does in her regular employment. Accordingly, Family Fun Day, as to Goulding, was not a social or recreational activity. And, because Friendship House has advanced no other applicable exception under the Act, Goulding’s injuries are compensable.”
Next, the Court tackled the language of the statute itself. The Court concluded that even if Goulding’s activities were considered social or recreational, she met the statutory exception. The Court viewed the event as a regular incident of employment because it was sponsored by Friendship House and because it was planned to be an annual event. The more difficult question was whether there was a benefit to Friendship House beyond improvement of health and morale. The Court highlighted the following points:
* There was nothing in the trial record suggesting employees and their own families were invited to attend as guests;
* The event’s purpose was “celebrating clients or members, their families, and the community.”
* Friendship House received the “intangible benefits” of promoting itself and fostering goodwill in the community
* The experience enjoyed by the clients and their families constituted “a separate benefit in and of itself.”
There is a fundamental problem with the Court’s primary holding that Ms. Goulding was working during this event and not engaging in a social or recreational activity. The logical conclusion of the decision that Goulding was working at the Fun Day event brings into play the Fair Labor Standards Act. The Court observed that Goulding did not participate in any fun activities but it failed to address the elephant in the room — whether Friendship House was required to pay Goulding and other non-exempt cooks like her who were doing their regular jobs. If they were truly working, of course they would have to be paid.
More than likely Ms. Goulding volunteered to cook and probably had no expectation of being paid. She probably felt her contribution to the event would be better served by cooking and interacting with clients in that manner, as opposed to playing games with clients. She could have changed her mind at any point or she could have done both. The case will have the negative effect of deterring employers from hosting positive events like this Family Fun Day event because the employer will have to figure out ahead of time who will be working and who will not be and then pay those volunteers who were considered to be working. Employers will also have to keep accurate time records in order to make correct payments.
The Court’s alternative analysis was the right one. Petitioner was able to meet the statutory exception to the law in N.J.S.A. 34:15-7. In this practitioner’s view, petitioner was involved in a social and recreational activity and was not working. She proved to the Supreme Court that there was a benefit to Friendship House greater than improvement in health and morale. The Court therefore concluded that she should therefore be covered for workers’ compensation purposes. This analysis avoids the FLSA issue for future employers who host events like this.
For employers, practitioners and judges, the focus should be now on whether the goal of the employer-sponsored activity is targeted to serving clients and promoting business opportunities as opposed to promoting health and morale of the employees through an employee softball game or an employee picnic, for example. If the objective is to reach out to the community at large and promote goodwill or company advertisement of its services, this case suggests that an injury to a volunteer during such an event will be considered compensable for workers’ compensation purposes. If the purpose is just to promote health and morale of employees, the activity is not compensable.
John H. Geaney, Esq., is a Shareholder and Co-Chair in Capehart Scatchard's Workers’ Compensation Group. Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at email@example.com.