Geaney: Critical Accident Following Annual Vacation Occasion Not Compensable| Staff Compensation Information

By John H. Geaney

Monday, June 14, 2021 | 0

Too often, vacation parties end with an unfortunate injury. Is such an injury covered by employee compensation? It depends on the circumstances.

John H. Geaney

In the Regalado v F&B Garage Door case, a court ruled that the injury did not arise from and during the employment relationship.

Some of the facts in the case were beyond dispute. On December 23, 2016, the company held its annual Christmas party at a local restaurant. The party was for co-workers, friends and family. No corporate customers or suppliers were invited. The company’s owner, Frida Ferrera, said the purpose of the party was to thank the staff for their hard work throughout the year.

The petitioner Viridiana Regalado invited her brother as in previous years. Since none of them drove, the owner drove them to the party. The vehicle belonged to Elka Martinez, who was not employed by the company. Everyone at the party except the owner consumed alcohol. Nobody was paid to attend the party or compensated for travel time.

The parties also agreed on the circumstances of the accident. After the party was over, Ferrera drove to his home first. She got out and then Martinez, the car owner, took the driver’s seat. Minutes later, Martinez drove into a parked car, causing the vehicle to tip over and rest on the roof. The petitioner and her brother were treated in the emergency room and required surgery on the neck and jaw.

The applicant has filed an application for compensation for employees. She argued that the owner told her that if she did not attend the Christmas party, she would not get any vacation pay. These and other claims made by the petitioner have been contested. The petitioner also claimed that she received her cash bonus in the restaurant. However, during the testimony, the petitioner said that she would not have attended the party if transport had not been provided.

The defendant presented three lay witnesses. They all stated that the bonuses had been paid out before the Christmas party. The owner denied that the petitioner’s bonus was contingent on attending the party. The owner testified that the party was voluntary and that there were no professional consequences for refusing to attend.

Another employee testified that he attended the party for two years and was never told that his bonus was contingent on participation. He also said the bonus was paid before the party.

The only documentary evidence provided by the petitioner was a bank statement showing her deposit history between December 9, 2016 and January 10, 2017. These documents showed that $ 540 was deposited on December 27, 2016. The petitioner’s calculations were incorrect. She said that amount equals $ 60 a day for three days plus a $ 300 cash bonus received at the party. That was $ 480 in total, not $ 540.

After hearing testimonies for several days, the compensation judge found that the petitioner was not credible or consistent. He noted that the petitioner stated that he had received different amounts of money on different days of the testimony. He also found it inconsistent for the petitioner to say that she would not have attended the party without transportation, but then claimed that her presence was essentially mandatory.

As for the bank deposit, the judge found that no report was made when the petitioner received these funds. The judge dismissed the case and the petitioner appealed.

The Appeals Department examined the requirements under NJSA 34: 15-7. It noted that in order for a social activity to be compensated, the petitioner must demonstrate that there is benefit to the employer beyond improving health and morale. In this case, the party was clearly about employee morale as only colleagues, friends and family were invited, not customers or suppliers.

This left one remaining legal argument from the petitioner, namely that she was required to be present. In New Jersey, there are a number of instances where compensation is set when an employee is required to engage in an activity, be it recreational or social. The court found no evidence that the petitioner was actually obliged to attend or that she threatened retaliation for not appearing.

The court viewed the party as an informal gathering on a voluntary basis. The petitioner’s argument that her bonus was at stake because other witnesses made it clear that the bonus had been paid before the party had no weight. The court agreed with the compensation judge that the petitioner’s statement that she would not have participated in the party without promotion contradicted the party’s so-called mandatory character.

The lesson from this case is that employers wishing to host holiday parties and similar events should make it clear in writing that attendance is voluntary and voluntary and that non-attendance will not have a detrimental effect on the workplace.

John H. Geaney is an attorney, director, and shareholder in Capehart Scatchard, a defense law firm in New Jersey. This post is published with permission from Geaney’s New Jersey Workers’ Comp Blog.