12/31/2007
Recent Decisions by the Tennessee Supreme Court Expand the Reach of Workers' Compensation Act

The Tennessee Supreme Court issued two interesting workers’ compensation decisions (not an oxymoron) during the last four months of 2007 of which employers should take note.  The first decision, issued in September, expands the circumstances in which an employer may be held liable under the Workers’ Compensation Act for injuries or death suffered during recreational activities. The second decision, issued in November, addresses a claim by a telecommuting employee that injuries suffered in an assault in her kitchen should be covered by the Workers’ Compensation Act. Although the Court found that benefits were appropriate in one of the cases and not the other, both decisions open the door to expansion of the coverage of the Act.

 

Recreational Activities

 

In Gooden v. Coors Technical Ceramic Company, the widow of Gregory Gooden sought workers’ compensation benefits following the death of her husband. Mr. Gooden died after suffering a heart attack during a pick-up basketball game on his employer’s premises. The evidence in the case showed that the employer did not allow employees to leave the company’s premises during break periods but did knowingly permit employees to play basketball three or four times a week during breaks and that supervisors sometimes played in those games. The trial court entered judgment for the employer finding that Mr. Gooden’s death did not arise out of his employment. The trial court based its opinion, in part, on a 2005 decision from the Tennessee Supreme Court (Young v. Taylor-White, LLC) in which the Court found an employee’s injury during a three-legged race at the company picnic to be non-compensable. The Court in Young placed a great deal of weight on the fact that both the employee’s attendance at the picnic and participation in the three-legged race were voluntary.

 

However, in Gooden, the Supreme Court reversed the trial court’s judgment for the employer and found that the deceased employee’s heart attack was covered by the Workers’ Compensation Act and compensable. The Court distinguished the Gooden case from the earlier Young case on the ground that the employer in Gooden acquiesced to the basketball games and the routine frequency of the games, especially in light of the fact that employees were not allowed to leave the company premises during breaks. Based upon this evidence, the Court held that the basketball games had become a “regular incident” of Mr. Gooden’s employment and, as such, injuries (or death) during such games should be compensable.

 

In an age where some employers are seeking ways to address the rising costs of health insurance through company-related fitness programs and other activities, employers need to be aware of this decision. Short of disallowing the basketball games and/or taking down the basketball goal, it is not clear from the Gooden decision if the employer could have taken steps to avoid workers’ compensation liability. Unfortunately, the end result may very well be that employers decide to prohibit these type of fitness-related activities that, one would think, should be encouraged. At the minimum, employers that allow such activities should discuss this decision with their workers’ compensation insurance provider to ensure that they would be covered in the event of a claim.

 

Telecommuting

 

Kristina Wait was an employee of the American Cancer Society (“ACS”) who worked from her home. ACS provided Ms. Wait with office equipment and she converted a spare bedroom into an office. In addition, Ms. Wait’s coworkers would occasionally attend meetings at her home-based office. The Tennessee Supreme Court noted that there was no evidence that ACS established set work hours or delineated what spaces of her home were to be considered “work spaces.”

 

In September 2004, Ms. Wait was assaulted by a neighbor in her kitchen while she was preparing lunch. Following the assault, Ms. Wait sought workers’ compensation benefits from ACS and its insurer. The trial court dismissed Ms. Wait’s lawsuit finding that she was not in her home office and was not conducting business for ACS when she was injured. The Supreme Court accepted Ms. Wait’s appeal and, for the first time, addressed the issue of whether injuries suffered by telecommuters at home are compensable under the Workers’ Compensation Act.

 

In order to be compensable under the Workers’ Compensation Act, an injury must have “arisen out of” and occurred “in the course of” the individual’s employment. The Court first held that Ms. Wait’s injury did occur “in the course of” her employment. In reaching this conclusion, the Court compared Ms. Wait’s kitchen to a breakroom in a traditional office setting and found that it was reasonable to conclude that ACS realized Ms. Wait would take breaks during the day including eating, drinking, smoking, seeking fresh air, and using the restroom. Accordingly, even though Ms. Wait was in her kitchen and not in her home office, the Court found that this element of the compensability test was satisfied.

 

However, on the second required factor, the Supreme Court found that Ms. Wait’s injuries did not “arise out of” her employment because there was insufficient causal connection between the employment conditions and the resulting injury. In reaching this conclusion, the Court relied upon the fact that the assault had no inherent relationship to her work duties. Evidence established that the attacker was a neighbor of Ms. Wait with whom she had limited social interaction. As such, the Court held that the attack and injuries did not bear enough of a connection to her work to support a finding that they arose out of her employment. The Court rejected Ms. Wait’s argument that, but for her job, she would not have been home when the assault occurred.

 

Although the Court ultimately affirmed the trial court’s denial of benefits to Ms. Wait, its decision makes clear that many injuries suffered by telecommuters at home will be compensable. The Court appeared very careful in stating that its decision was based upon the “narrow facts” of the Wait case and the assault. Therefore, the Court clearly left open the possibility that injuries suffered by telecommuters from assaults could be compensable under different circumstances and that many other types of injuries by telecommuters would be compensable.

 

Employers who utilize telecommuters should have policies that clearly delineate what areas of the employee’s home are to be used as work space and what the general work hours are. Although such policies will not necessarily exclude injuries outside of these boundaries from coverage, they will provide some bases to argue that certain injuries did not arise out of and in the course of the telecommuter’s employment. However, the more fundamental lesson is that companies considering telecommuting arrangements need to carefully consider the issue of workers’ compensation prior to the start of such arrangement. In addition, such companies should consult with their workers’ compensation insurer and legal counsel to ensure that adequate protections are in place and that any compensable claims will be covered.