Injured employees are entitled to workers’ compensation benefits for injuries arising out of and in the course of employment. But what happens when an employee is injured after work at the place of employment while socializing with other workers or engaged in a recreational activity? The answer depends on the purpose for which the employee is at the place of employment and the degree to which the purpose is a condition of employment.

McCarty v. Workers’ Comp. Appeals Bd.

The seminal case addressing this issue in California is McCarty v. WCAB (1974) 12 Cal.3d 677. In the McCarty case, the California Supreme Court awarded workers’ compensation death benefits to the wife of an intoxicated employee who was killed when he drove his car into a light pole following a Christmas party. The McCarty court held, “[e]mployee social and recreational activity on the company premises, endorsed with the express or implied permission of the employer, falls within the course of employment if the ‘activity was conceivably of some benefit to the employer….’ [Citations.]” (Id. at pp. 681–682, fn. omitted.) The court reasoned the employer permitted recurrent drinking parties on the premises, routinely used company accounts and funds to purchase alcohol, and demonstrated it considered these gatherings to be company activities. (Id. at p. 680.) Further, the gatherings served to foster camaraderie and to provide an occasion to discuss company business. (Id. at pp. 682–683.). The McCarty holding was subsequently codified in the California Labor Code. (See Lab. Code, § 3600, subd. (a)(9) [previously 3600, subd. (a)(8)].)

The Essy Two-Pronged Test

Following, McCarty, the Court of Appeal articulated a two-pronged test to determine when off-duty recreational, social, or athletic activities are compensable under the workers’ compensation statute. (Ezzy v. Workers’ Comp. Appeals Bd. (1983) 146 Cal.App.3d 252.) Under Ezzy, it must be determined if the employee subjectively believed that his or her participation in an activity was expected by the employer, and (2) if this subjective belief was objectively reasonable. In Essy, a female law clerk was awarded workers’ compensation benefits when she injured her finger while participating in a firm-sponsored softball game. The Court reasoned the claim was compensable because the Applicant had a subjective belief participation in the softball game was expected and said belief was objectively reasonable because the league required each team to field at least four females or else the game was forfeited. In contrast, an employee who was injured playing basketball during his lunch break on the employer’s premises was denied workers’ compensation benefits because the basketball game was voluntary and only remotely work-related. (Todd v. Workers’ Comp. Appeals Bd. (1988) 198 Cal.App.3d 757, 759.)

Subsequent Development

In a WCAB panel opinion, The Essy test was subsequently used to deny a CHP officer’s widow workers’ compensation death benefits who died as a result of a motor vehicle accident after he had been drinking at an area known as the “outback” a vacant lot adjacent to the CHP sub-station. (Arredondo v. Cal. Highway Patrol (2013) WL 7099119). In reaching its decision, the court found it was not objectively reasonable to believe participation in off duty drinking at the “Outback,” which was not on the work premises, was expected because the CHP did not condone the consumption of alcohol while off duty and had a written policy prohibiting alcohol use at all times while on duty, in uniform, or driving a state vehicle.

In Aetna Casualty & Surety Co. v. Workers’ Comp. Appeals Bd. (1986) 187 Cal.App.3d 922, the Court of Appeal denied workers’ compensation benefits to an Applicant who was injured in a motor vehicle accident driven by a co-worker following an after-work hours drinking session in the parking lot on the employer’s premises. In distinguishing McCarty, the court found the lack of evidence indicating the employees were talking shop and compensated for time spent on the premises after work hours, the employer paid for the beer, management condonement, and custom and practice to be dispositive. Further, the applicant testified the employer never required the employees to remain after hours to consume alcohol and talk and therefore the lax subjective belief test, the first prong of the Essy standard, was not even met.

The issue has also been explored in the context of a motion by a third-party defendant to bar a civil action based on workers’ compensation exclusivity. (See Mason v. Lake Dolores Group (2004) 117 Cal.App.4th 822). In Mason, the Court of Appeal found a waterpark employee’s serious injuries were not compensable under the workers’ compensation act when he returned to the water park prior to his shift and voluntarily used one of the water slides in violation of the employer’s policy. The court reasoned even though the injury was sustained at the place of employment there was no work-related connection.

Work Related Nexus Is the Key Factor

To further illustrate how work-connectedness is the critical factor in analyzing after-work hours injuries, which occur at the place of employment, an unpublished decision involving an after-work injury at the employee’s home is instructive. A civil rights lawyer who was shot six times by a former prison inmate while she was at home was awarded workers’ compensation benefits. (See State Comp. Insurance Fund v. Workers’ Comp. Appeals Bd. (1981) 174 Cal.Rptr.447 [nonpub. opn.].) The court’s analysis of the causation issue present in determining whether an injury arises out of employment, was informed by an article authored by Arthur Larson, which illustrates the point perfectly:

When one speaks of an event “arising out of employment,” the initiative, the moving force, is something other than the employment; the employment is thought of more as a condition out of which the event arises than as the force affirmatively producing the event. In tort law the beginning point is always a person’s act, and the act causes certain consequences. In workmen’s compensation law, the beginning point is not an act at all; it is a relation or condition, namely employment…. The primary test of legal cause in the U.S. is foreseeability…. But foreseeability has no relevance if one is not interested in the culpability of the actor’s conduct. There is nothing in the theory of compensation liability that cares whether the employer foresaw particular kinds of harm. The only criterion is connection in fact with the employment, whether it is foreseeable in advance, or apparent only in retrospect…. (Arthur Larson, Range of Compensable Consequences in Workmen’s Compensation 21 Hastings Law Journal (February, 1970) Number 3 pp. 609, 610.)

Takeaway

Employers who encourage regular social gatherings of employees and derive benefit from team-building and camaraderie are at increased risk for workers’ compensation exposure for injuries to employees during these after-hours activities. The risk is further increased if the employer supplies alcohol or encourages drinking at these events. To address non-sanctioned irregular social gatherings, employers should discourage after-hours loitering by employees and should have well defined policies regulating after-hours use of dangerous equipment and intoxicants such as alcohol and marijuana at the place of employment.

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