Thought Leadership

F&B Garage Door had its annual holiday party on December 23, 2016, for its employees and guests. No clients, etc. were invited. The petitioner attended with her brother, but as neither drove, the owner, Frida Ferrera, agreed to provide a ride to and from the event. On that night, Ferrera and a friend, Elka Martinez, brought the petitioner and her brother from their home to the party. Martinez owned the vehicle and was not employed by F&B. The petitioner was not paid to attend nor compensated for travel time.

After the party, Ferrera drove the petitioner, her brother and Martinez back to her own house. After dropping off Ferrera, Martinez got into the driver’s seat. A few minutes after leaving Ferrera’s house, Martinez hit a parked car and flipped her car over, which came to rest on its roof. After the petitioner filed a workers’ compensation claim, F&B argued the petitioner was not in the course of her employment.

In the petitioner’s testimony, she stated that Ferrera advised her that she would not receive a holiday bonus if she did not attend the party because the bonus would be distributed during the event. The petitioner also indicated that she would not have attended if transportation had not been not provided. She presented a bank statement that noted $540 was deposited at an ATM on December 27, 2016, which allegedly included the $300 bonus and three days’ pay. On the other hand, Ferrera and Oscar Gutierrez, another employee, testified that bonuses were paid a few days prior to the party. According to Ferrera, the party was optional. Gutierrez testified that he attended holiday parties in previous years and the bonuses were paid prior to the events. He was never told he would not receive a bonus if he did not attend and felt free to decline.

After reviewing all testimony, the Judge of Compensation found the petitioner was not credible, as her testimony was contradictory in part, and that the bank statement did not hold much weight, as it did not reveal where the money came from or when it was sent to the petitioner. Contrarily, the judge found F&B’s witnesses to be credible.

The judge then went on to determine compensability for an injury during a recreational or social activity under N.J.S.A. 34:15-7. He found that attendance was not mandatory, the bonus was not contingent on attendance and the party did not provide a benefit to F&B other than to improve employee morale. As such, the judge found the petitioner was not in the course of her employment and dismissed her claim.

In her appeal, the petitioner relied on Lozano v. Frank DeLuca Constr., 178 N.J. 513 (2004), to argue the judge did not apply the analysis of whether her reasonable belief that attendance was mandatory would render her claim compensable. The Appellate Division reviewed Lozano, noting that an employee’s subjective impression of compulsion alone was insufficient. Rather, other factors needed to be taken into account, such as the employer’s solicitation of employee participation, when/where/whom the event takes place and whether refusal could negatively impact the employee’s employment. In applying these factors, the Appellate Division found no error in the judge’s decision to dismiss the petitioner’s claim.

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