Employer must derive a “substantial direct benefit” from employee’s attendance for social event to arise in the course of employment

by | Aug 15, 2015

Employer must derive a “substantial direct benefit” from employee’s attendance for social event to arise in the course of employment

On July 10, 2015, the Nebraska Supreme Court reiterated that in order for a Claimant to establish that an injury at a recreational or social event arose out of and in the course of employment, the Claimant must demonstrate that the employer derived a direct andsubstantial benefit from the Claimant’s attendance at the social or recreational event. Jacobitz v. Aurora Cooperative, 291 Neb. 349 (2015). The compensation court found that the employer received a “substantial benefit” and awarded recovery to an injured employee. Id. The Supreme Court held that the compensation court applied the wrong legal standard because the appropriate test is whether the employer received a “substantial direct benefit” from claimant’s attendance.

John Jacobitz was a general laborer who sustained a head injury when he fell off of the back of a pickup truck at a customer appreciation dinner for his employer, Aurora Cooperative. A manager testified that he invited employees to attend the dinner for morale but that attendance was not required. Id. The manager also did not take attendance to determine which employees attended the dinner and which did not. Id. The Co-op argued that the injury did not arise out of and in the course of Jacobitz’s employment. Id.

The Supreme Court employed the following test to determine whether the injury arose out of and in the course of employment: “Recreational and social activities are within the course of employment when (1) They occur on the premises during a lunch or recreation period as a regular incident of the employment; or (2) The employer, by expressly or impliedly requiring participation, or by making the activity part of the services of an employee, bring the activity within the orbit of the employment; or (3) The employer derives a substantial direct benefit from the activity beyond the intangible value of improvement in employee health and morale that is common to all kinds of recreation and social life.” Id.

In elaborating as to how “direct” fits into the analysis, the Court stated direct is defined as, “stemming immediately from a source, natural, straightforward, marked by absence of an intervening agency, instrumentality, or influence and characterized by close logical, causal or consequential relationship.”

The Supreme Court remanded this matter back to the compensation court to apply the appropriate standard.

For questions or additional information on this topic, please contact Nebraska Workers’ Compensation attorney Emily R. Motto at EMotto@baylorevnen.com or 402.475.1075.