A North Carolina court has affirmed a state agency’s decisiondenying an employee’s workers’ compensation claim for injuries sustained at her employer’s annualholiday party.

It concluded that the injury had not arisen out of or in thecourse of her employment.

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The Case

Melissa Lennon worked as a deputy clerk of court in theaccounting division of the Harnett County clerk of court’s officein Hartnett County, North Carolina.

In 2013, Ms. Lennon’s division was tasked with planning theannual office holiday party at the Chicora Country Club in Dunn,North Carolina.

During her normal work hours and for which she was paid, Ms.Lennon helped design the invitations and assisted with securingcatering and planning the program. She also volunteered to serve asthe “emcee” for the event. All employees were invited toattend.

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Regardless of whether they attended, all employees were expectedto contribute $13 to pay for a gift to the clerk of court and forcleaning up after the party.

A group of private attorneys and their spouses sponsored theparty by paying for the cost of renting the venue and the foodserved to the guests.

On the night of the party, as Ms. Lennon was entering thecountry club, she tripped and fell and suffered an acutenondisplaced fracture of the distal radius of her left wrist,coccyx fracture, and superior glenoid tear of her leftshoulder.

Following the accident, Ms. Lennon received short-term disability benefits. She then filed a claimwith the county clerk’s office for additional compensation underthe North Carolina Workers’ Compensation Act (the “Act”) includingfor days missed from work, permanent partial disability, andmedical expenses.

The office’s insurance carrier denied her claim and Ms. Lennonrequested a hearing before the North Carolina IndustrialCommission.

Following a hearing, a deputy commissioner denied the claim,agreeing with the office’s assertion that Ms. Lennon had not beeninjured within the course and scope of her employment and the fullcommission denied her appeal.

The full commission upheld the ruling, finding:

3. The Office of Clerk of Superior Court for Harnett County hashad an annual Christmas party for over twenty years. Each divisionwithin the Clerk’s Office rotated annually the responsibility toserve as the host and to plan the event. The division assigned tohost the event was responsible for selecting a caterer, maintainingan RSVP list of attendees, collecting money for gifts provided forthe maintenance employees and for the Clerk of Superior Court andcollecting money to cover the after party cleaning fee.

4. In late 2013, employees of the Clerk’s Office voted to have aparty similar to those that they had held in previous years. TheAccounting Division was responsible for hosting the holiday partythat year. Plaintiff worked with Assistant Clerk Cheryl Brown,Plaintiff’s supervisor, in designing the party invitations,arranging the catering and planning the program for the event.Plaintiff volunteered to emcee the event as well.

…

7. On December 5, 2013, the Clerk’s office held its annualChristmas Party at the Chicora Country Club. The Country Club wasin another city approximately fifteen to twenty minutes away fromthe Clerk’s Office. The Christmas party was held in the eveningafter work. The use of the Country Club was sponsored by a group ofprivate attorneys and their spouses. The same private firm paid forDefendant’s employees’ dinners served during the Christmas party.Employees bringing guests paid an additional $13.00 per guest.

8. The money collected from employees for the Christmas partywas used to purchase gifts for the maintenance staff. Employeesalso donated small gifts that were given away at the Christmasparty as door prizes. In lieu of a personal gift to theirsupervisor, Marsha Johnson, the employees of the Clerk’s Officemade a donation on behalf of Ms. Johnson to one of her favoritecharities. Her staff presented her with a certificate to representthe donation to the charity.

9. Ms. Johnson spoke at the Christmas party thanking heremployees for their hard work and team effort. Ms. Johnson gavegifts of wooden writing pens to all of her employees as a token ofappreciation for their work. No service awards were presented toemployees.

…

20. The Full Commission finds that Plaintiff was not required toattend the Christmas party as part of her employment. Plaintiff’sattendance at the Christmas party was purely voluntary, evidencedby the fact that the employees who did not attend were not subjectto any discipline for their failure to attend.

21. The Full Commission finds as fact that while Plaintiff wasattending the Christmas party, she was doing so for her ownbenefit. Although Plaintiff testified that she felt obligated toattend the party, there is no evidence that she was in the courseand scope of employment at the time of the injury.

…

25. Defendant did not sponsor, fund or mandate participation inthe Christmas party.

Ms. Lennon went to court, challenging the decision. Inparticular, she objected to the finding that her attendance at theparty had not been required.

North Carolina Law

The North Carolina Workers’ Compensation Act providescompensation for:

injury by accident arising out of and in the course of theemployment….

N.C. Gen. Stat. § 97-2(6) (2015).

The Court’s Decision

The court affirmed.

In its decision, the court explained that injuries occurringduring recreational and social activities related to employmentcould fall within the purview of the Act when:

- They occurred on the premises during a lunch or recreationperiod as a regular incident of the employment; or

- The employer, by expressly or impliedly requiringparticipation, or by making the activity part of the services of anemployee, brought the activity within the orbit of the employment;or

- The employer derived substantial direct benefit from theactivity beyond the intangible value of improvement in employees’health and morale that was “common to all kinds of recreation andsocial life.”

It next pointed out that it had a six question analysis to helpto determine whether an injury arose out of employment:

(1) Did the employer in fact sponsor the event?

(2) To what extent was attendance really voluntary?

(3) Was there some degree of encouragement to attend evidencedby such factors as:

a. taking a record of attendance;

b. paying for the time spent;

c. requiring the employee to work if he did not attend; or

d. maintaining a known custom of attending?

(4) Did the employer finance the occasion to a substantialextent?

(5) Did the employees regard it as an employment benefit towhich they were entitled as of right?

(6) Did the employer benefit from the event, not merely in avague way through better morale or good will, but through suchtangible advantages as having an opportunity to make speeches andawards?

The court then rejected Ms. Lennon’s argument that thecommission had erred when it had ruled in its finding of fact 20that her attendance at the party had not been required. It observedthat the commission had not determined that hosting duties includedattending the party.

The court also was not persuaded by Ms. Lennon’s contention thatshe had been required to attend the party because she hadvolunteered to emcee the event, concluding that “[t]he findings offact of the Industrial Commission are conclusive on appeal whensupported by competent evidence, even though there be evidence thatwould support findings to the contrary.”

The court then affirmed the commission’s denial of Ms. Lennon’sclaims, on the basis that her injury had not arisen out of or inthe course of her employment.

The case is Lennon v. N.C. JudicialDep’t, No. COA16-476 (N.C. Ct.App. Dec. 6 2016). Attorneysinvolved include: Law Offices of James Scott Farrin, by Douglas E.Berger and Susan J. Vanderweert, for Plaintiff-Appellant; AttorneyGeneral Roy Cooper, by Special Deputy Attorney General SharonPatrick-Wilson, for Defendant-Appellees.