Ground Rules How to sponsor a company sports team without losing your jersey.

There's your company name, emblazoned on the back of thebowling shirts your employees proudly wear in their league.You're convinced that sponsoring the team not only gets yourname out in the community, but also increases camaraderie andbuilds company spirit in ways that carry over to the workday. Whathappens, though, if your office manager drops a bowling ball on herfoot? Is she eligible for workers' compensation? What if afight erupts at a bowling tournament and a spectator gets hurt? Orwhat if alcohol flows at the after-game party and a drunkenemployee hits a pedestrian on the way home? Courts deal with thesequestions more often than you'd expect.

Whether the question concerns workers' comp for employeesinjured in a company-sponsored game or liability for the injuriesof a third party, the basic question is the same: How closely isthe company tied to the team or the sporting event? To determinethat, the court often asks these questions: Are the games on theemployer's premises? Are employees expected to play or asked tobuild relationships with customers on the playing field? In effect,is playing on the team part of the employees' jobs?

Consider two recent cases, both involving injuries to employeeswho were playing on company-sponsored softball teams. In NewHampshire, an employee learned during his job interview thathe'd be expected to play on the company softball team. Softballwas so much a part of the company's culture that the companypaid nearly all its team's expenses, including uniforms, bats,gloves, weights and other equipment, plus air fare, hotelaccommodations, meals, drinks and fees for tournaments around thecountry. When the employee injured his knee playing first base, heapplied for workers' comp, claiming the injury stemmed from hisjob.

Although the company disputed the claim all the way to theSupreme Court of New Hampshire, the employee won compensation. Thecourt noted the company's extensive involvement with the team.Work schedules were routinely adjusted to accommodate softballpractices and games. When team members missed work for practices orgames, the company never docked their pay--and it even paidovertime to co-workers who filled in. Playing softball waseffectively part of the job.

In a South Carolina case, a worker was likewise injured playingsoftball for his company-sponsored team, but he was deniedworkers' comp. The court noted that the team was organizedthrough employee initiative. All games and practices took place offthe employer's premises, and team meetings were held duringlunch breaks when workers were off the time clock. Although thecompany furnished uniforms, equipment and league dues, it neverpaid players or coaches. Although uniforms bore the company nameand game scores were published in the local newspaper, thatdidn't provide enough direct benefit to the company to rulethat the player was injured on the job.

Steven C. Bahls, dean of Capital University Law School inColumbus, Ohio, teaches BIZ Experiencesship law. Freelance writer JaneEaster Bahls specializes in business and legal topics.

Staying Away From Home Base

Theodore Cornblatt, a workers' compensation attorney inBaltimore, notes that the location of the game is important."If the game is held on the employer's premises, such as apick-up game during a coffee break, it's probably covered [byworkers' comp,]" he says. In particular, if the employerknows that games have been taking place on the premises andhasn't objected, the injuries are typically covered.

Another critical factor concerns whether the employee wascompensated for playing or directed to play by the employer. InIllinois, for instance, the workers' compensation statutespecifically exempts volunteer recreation programs--unless theemployer assigns or orders the employee to participate. "If acompany doesn't want to be responsible under workers'compensation law, [it shouldn't] direct employees to go tocompany outings," says Chicago workers' compensationattorney Thomas Lichten.

In one such instance, a temporary employee in Oklahoma wasassigned to a publishing company, where she worked for nine months.Her supervisors encouraged her to participate in the annual"Corporate Challenge," an athletic competition amonglocal companies. A higher-ranking employee recruited her to play onthe women's basketball team, and a co-worker signed her up forthe tug-of-war. Rather than jeopardize her placement with thecompany, she agreed to participate. When her knee was injured inthe tug-of-war game, she applied for workers' comp--and got it.Both the trial court and the Oklahoma Court of Appeals noted thatthe employer had induced her to participate.

Beyond Workers' Comp

For employers, the advantage of workers' comp is that itlimits the compensation for employee injuries to medical expensesand disability, thereby protecting the employer from civiljudgments. But workers' comp laws won't help if a thirdparty gets injured as a result of a company sporting event. Thestandards, however, are similar. The employer's degree ofparticipation and level of control determine whether the employeris liable.

"The most serious risks are [present when] alcohol isinvolved," says Peter Bennett, an employment law attorney inPortland, Maine. Suppose the company allows beer at a softballgame, and a fight breaks out over a referee's call. "Ifthe company's name is emblazoned on the uniform, the companybecomes a target," Bennett says. The same is true if anemployee who's had too much to drink causes an auto accident onthe way home.

The trend in the past four years, according to Bennett, is foremployers to prohibit alcohol at company-sponsored events.That's a good policy, he says, because without alcohol,there's little risk of civil liability. There are otherscenarios, however, that may be risky. Suppose, says Bennett, asupervisor makes sexual advances toward a subordinate at acompany-sponsored golf tournament. Even though it's not duringworking hours and not on company premises, the business could beliable for sexual harassment if a higher-ranking employee directedthe subordinate worker to be there.

Or suppose Company A, wanting to get in the good graces of itsmajor client, Company B, has its employees participate in a sportsleague in hopes of encouraging a business relationship with CompanyB. If an employee of Company A gets in a car accident on the way tothe game, since the employee was going to the game for theemployer's benefit, that's enough to trigger bothworkers' comp and third-party liability.

If you want to minimize the chance you'll be held liable forgame-related injuries, follow these guidelines:

• Avoid holding sporting events on your company's premises oron company time.

• Make sure employees know their participation is strictlyvoluntary and that they're playing at their own risk. Considerhaving employees sign a waiver to that effect.

• Limit company participation to publicity and paying the bills.Let team members handle such matters as scheduling and equipmentpurchases.

• Don't let employees think they're being paid toplay.

What's the bottom line? Be aware that there's noironclad guarantee that you'll avoid liability, especiallyunder workers' compensation laws. In particular, a court maynot recognize a waiver. A bit of risk may be the price for thebenefits of having a company team.

Next Step

Ignorance, says the U.S. Supreme Court, is no longer a validexcuse when it comes to sexual harassment. Get the facts aboutharassment at the U.S. Equal Employment OpportunityCommission's Web site: http://www.eeoc.gov Especially useful arethe pages headed "Small Business Information".

Contact Source

Peter Bennett, c/o Bennett, Bennett and Troiano, 121Middle St., #300, Portland, ME 04101, (207) 773-4775.