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A-104 September Term 2002; Supreme Court; opinion by Zazzali, J.; decided March 10, 2004. On certification to the Appellate Division. [Sat below: Judges Lefelt and Winkelstein in the Appellate Division.] DDS No. 39-1-6131 When an employer compels an employee’s participation in an activity generally viewed as recreational or social, that activity is work-related as a matter of law, and an employee injured by it need not satisfy the two-prong test of N.J.S.A. 34:15-7 to receive workers’ compensation; to recover under a theory of compulsion, the injured employee must establish that he engaged in the activity based on an objectively reasonable belief that participation was required — whether the belief is objectively reasonable will depend largely on the employer’s conduct and must be assessed on a case-by-case basis; since on this record it cannot be determined whether the claim of petitioner, a mason, that his employer commanded him to drive the go-cart in which he sustained serious injury at the job site, after he had finished his work and was waiting for his employer to drive him home, was objectively reasonable, the judgment of the Appellate Division affirming the denial of benefits is reversed and the matter is remanded to the Division of Workers’ Compensation for further proceedings. Respondent Frank DeLuca Construction, a mason contractor, employed petitioner Porfirio Lozano as a general laborer. Lozano normally worked six days per week, from 8 a.m. to 4 p.m. Because of the nature of his work as an independent contractor, he did not have a fixed place of employment, but worked wherever his employer assigned him on any given day. Lozano, who did not have a driver’s license and did not know how to drive, relied on Frank DeLuca, the company’s owner and his supervisor, for transportation between his home and the work sites. On the day of the accident that gave rise to this workers’ compensation case, DeLuca picked up Lozano and another employee at their homes at approximately 8 a.m. and took them to the job site, a private home belonging to Peter Borbas. Under DeLuca’s supervision, Lozano and his fellow employee constructed a stone wall on Borbas’s property. By approximately 5 p.m., they had completed their task and were ready to return home. Borbas had three go-carts parked on a circular track that was separate from his driveway. As the two employees waited for DeLuca to take them home, Borbas and DeLuca got into go-carts and began driving around the track. When DeLuca got out, he directed Lozano to get in the go-cart. Not knowing how to drive, Lozano refused and explained that “[he] could not [drive] because [he] didn’t know anything about it.” DeLuca told him again to “get in,” reassuring him that “it was easy.” Lozano said he understood his supervisor’s persistence to be a command and, therefore, got into the go-cart. On his first lap around the track, he crashed into a parked truck and sustained severe injuries. Lozano filed a claim with the New Jersey Division of Workers’ Compensation, asserting that he sustained injuries from an accident arising out of and in the course of his employment. Respondent disputed the work-relatedness of the accident. At trial, the parties agreed to bifurcate the proceeding and address solely the issue of respondent’s liability. Lozano was the only witness at the workers’ compensation hearing. When asked whether he interpreted DeLuca’s directive to get in the go-cart as a command, he said “[DeLuca] was my boss. I had to obey the order.” He explained that he usually worked until 4 p.m., but that day he did not finish his assignment until 5 p.m. He also said that the accident occurred within minutes of his completion of the construction project. At the conclusion of Lozano’s direct examination, respondent moved for dismissal. Citing Lozano’s testimony that the accident happened after he had completed his work, it contended that this “would be a clear horseplay case” or, alternatively, a recreational activity after work. Under either category, respondent asserted that Lozano had not met his burden of showing a causal link between his employment and his injury. Lozano focused on his presence at the work site at the time of the accident. He stressed that he “was required to be there until his employer took him home.” Thus, he was still “in the course of employment” when DeLuca allegedly commanded him to get in the go-cart. The workers’ compensation judge granted respondent’s motion, concluding that, at the time of the accident, Lozano was engaged in a “recreational activity” that was outside the scope of his employment. The Appellate Division affirmed. The Workers’ Compensation Act provides that employers shall compensate employees for accidental injuries arising out of and in the course of employment except when “recreational or social activities . . . are the natural and proximate cause of the injury.” N.J.S.A. 34:15-7. To that general rule of no recovery for recreational and social activities, there is an exception, when “such recreational or social activities are a regular incident of employment and produce a benefit to the employer beyond improvement in employee health and morale[.]” Ibid. Thus, an employee injured during a recreational or social activity must satisfy a two-prong test to qualify for compensation. The activity (1) must be a “ regular incident of employment,” and (2) must “produce a benefit to the employer beyond improvement in employee health and morale.” Respondent argues that the plain language of 34:15-7 reflects a clear legislative intent to limit recovery for injuries suffered during all “recreational or social activities.” That is, the Legislature did not intend to distinguish between activities that an employer compels and those that an employee undertakes voluntarily. It submits that the judge of compensation properly concluded that Lozano must satisfy the two-part statutory test before recovery can be permitted. Lozano asserts that “recreational or social activities” is ambiguous. He says that whether an activity is recreational or work depends on the underlying circumstances and the employee’s state of mind. Thus, an activity traditionally viewed as recreational becomes work when it occurs on the work site and at the employer’s direction. Under that approach, this case does not implicate the two-part statutory test because Lozano was not engaged in a “recreational or social activity” when the accident occurred. No specific provision of the act defines “recreational or social activities.” The act’s silence on the meaning of the disputed phrase requires an inquiry to extend beyond the plain language of 34:15-7. Since the legislative history behind the 1979 package of amendments that added to 34:15-7 the provision dealing with recreational and social activities is relatively scant, the 1979 amendments must be considered in the context of the relevant case law both before and after their enactment. As originally drafted, the Workers’ Compensation Act simply provided that compensation would be awarded for injuries or death from accidents “arising out of and in the course of employment.” It contained no specific reference to recreational and social activities. The task of differentiating between compensable and noncompensable accidents rested with the courts. When drawing that line, courts considered (a) the customary nature of the activity; (b) the employer’s encouragement or subsidization of the activity; (c) the extent to which the employer managed or directed the recreational enterprise; (d) the presence of substantial influence or actual compulsion exerted on the employee to participate; and (e) the fact that the employer expects or receives a benefit from the employee’s participation. The absence or presence of a particular factor was not dispositive. Rather, courts assessed the work-relatedness of the recreational or social activity based on the totality of the circumstances. Few cases dealt with injuries suffered during mandatory recreational and social activities. They typically involved voluntary recreational activities that the employer either sponsored, permitted or encouraged. Early cases denied compensation for injuries sustained during employer-sponsored recreational and social activities at which attendance was not required and from which the employer did not receive a clear business benefit. However, a series of cases beginning with Tocci v. Tessler & Weiss, 28 N.J. 582 (1959), expanded coverage for voluntary recreational and social activities. Tocci involved an employee who was injured while engaging in a customary lunchtime softball game played on the company’s property during the employee’s lunch hour. Although the employees initiated and organized the games, the employer supplied some necessary equipment. Tocci reversed the dismissal of the employee’s claim. The majority found that the employer’s financial contribution, coupled with the time, place, and customary nature of the games, rendered the activity a regular incident and condition of employment. It deemed the games no different than other customary activities considered to be within the course of employment, such as eating lunch or taking a break for coffee. The majority concluded that the accidental injury had sufficient work connection to fall within the act’s coverage. Complitano v. Steel & Alloy Tank Co., 34 N.J. 30 (1961), expanded the scope of compensable recreational and social activities. It broadened the inquiry into the employer’s participation to “whether the employer’s participation in or contribution to the arrangements for the recreation is such that it is reasonably inferable that a benefit was expected therefrom, such as company advertising, or betterment of employer-employee relations . . . .” Sarzillo v. Turner Constr. Co., 101 N.J. 114, 118 (1985). Complitano accepted the reasoning that an employer’s financial support for a recreational activity can provide an adequate connection to employment to warrant an award of compensation. In essence, it permitted courts to infer an employer benefit from its monetary contribution. Only one pre-amendment published opinion dealt with a compelled social activity. In Harrison v. Stanton, 26 N.J. Super. 194 (App. Div. 1953), aff’d o.b., 14 N.J. 172 (1954), an employee sought coverage for an injury suffered while driving his child’s babysitter home. He had hired the babysitter so that he could attend an event sponsored by an organization that his employer had directed him to join. The employer defrayed the expense of the babysitter and provided transportation for the employee. At trial, the employee explained, “I joined [the organization] under the direction of [my employer].” Id. at 198. The employer acknowledged that “whenever it was possible for [the employee] to attend [an event sponsored by the organization,] I wanted him to, because I feel it is good for business for him to be there and mingle with the people.” Id. at 197. Noting that the employee’s attendance at the event “was expected, if not directed,” by the employer, the Appellate Division described the activity as an “assigned duty” and held that the accident arose out of and in the course of employment. The Supreme Court affirmed for the reasons expressed by the panel, thereby embracing the principle that with respect to recreational and social activities, compulsion is the sine qua non of work-relatedness. Before the 1979 amendments, courts also employed the basic philosophy underpinning Harrison to compensate employees who were injured while engaging in a mandated activity that, although nonsocial in nature, was unrelated to the employee’s day-to-day job duties. Two categories of cases dealing with activities ostensibly unrelated to work are discerned from the pre-amendment decisions. The first encompasses cases involving employer-sponsored recreational and social activities in which the employee voluntarily engaged. For injuries falling within that category, Tocci and Complitano offered alternative theories for recovery. An employee could establish an adequate link between the recreational activity and work by demonstrating either that the time, place and customary nature of the activity rendered it “a regular incident and condition of employment,” or that the degree of employer support indicated either an indirect or direct benefit to the employer. The second category involved employer-compelled activities. As Harrison demonstrates, courts in those circumstances deemed that a mandated activity fell within the scope of employment regardless of the activity’s departure from the employee’s normal job duties. The Legislature extensively amended the Workers’ Compensation Act in 1979 to “put significantly more money into the hands of the more seriously injured workers while providing genuine reform and meaningful cost containment for New Jersey employers from unjustified workers’ compensation costs . . . .” One means of effectuating that goal was the exclusion of “most injuries sustained during recreational or social activities.” Poswiatowski v. Standard Chlorine Chem. Co., 96 N.J. 321, 331 n.2 (1984). To that end, the Legislature added language to 34:15-7 that explicitly eliminated injuries suffered during “recreational or social activities” as a basis for recovery, except for such activities that are a “regular incident of employment” and “produce a benefit to the employer beyond improvement in employee health and morale.” According to the joint statement accompanying the amendments, the provision was added to reduce costs for employers by “declaring injuries sustained during recreational or social activities sponsored by the employer to be non-compensable unless such activities are a regular part of the employment[.]“ Although legislative intent to curb awards for recreational and social activities is evident from the legislative history of the amendments, the committee statements do not reveal how the Legislature intended to achieve that goal. Apart from the reference to “sponsored” activities in the joint statement, it did not qualify the phrase “recreational or social activities.” Courts interpreting the amended 34:15-7 have generally agreed that the Legislature intended to reverse the judicial trend of broadly formulating the scope of employment to include most voluntary recreational and social activities. However, of greater relevance here is the distinction made by post-1979 courts between compelled recreational and social activities and those that the employer merely permits or sponsors. Those cases suggest that by requiring participation in such an activity, the employer makes it “a regular incident of employment.” But none of them address whether evidence of employer compulsion also requires satisfaction of the “benefit” prong of 34:15-7. McCarthy v. Quest International Co., 285 N.J. Super. 469 (1995), certif. denied, 143 N.J. 518 (1996), answered that question. It considered whether the act as amended afforded compensation to an employee who was injured while participating in a tug-of-war competition during a company picnic. It found that because the employee joined in the game in response to a mandate from the company’s president, “engagement in the activity was an incident of her employment.” Id. at 473-74. However, compulsion “to participate did not alone justify a finding that [the employee's] injury arose out of and in the course of employment.” Id. at 473. Noting that “the 1979 statutory amendments did not provide specifically for different treatment when an employee is ordered or assigned to participate in an activity,” the panel concluded that she also had to establish that the activity conferred a benefit on her employer beyond improvements in worker morale and health. Id. at 473-74. Addressing that prong, McCarthy determined that the employer used the picnic to foster a working relationship between two recently merged companies and thus had a commercial motive beyond generosity toward the employees. It upheld the award of compensation based on the employee’s satisfaction of both prongs of the test in 34:15-7. Although McCarthy arrived at the correct result, its interpretation of 34:15-7 is disagreed with. Held: In view of the case law in existence in 1979, “recreational or social activities” in 34:15-7 is construed to encompass only those activities in which participation is not compulsory. Accordingly, when an employer compels an employee to participate in an activity that ordinarily would be considered recreational or social in nature, it thereby renders that activity a work-related task as a matter of law. That factual context does not implicate the two-prong test in 34:15-7. This holding recognizes that an employer always retains the power to expand the scope of employment by directing the employee to engage in tasks outside of the employee’s general job duties. A reading of the legislative history is persuasive that the amendments were not designed to overrule the earlier cases finding that compulsion alone brings an activity that is otherwise unrelated to work within the scope of employment. The joint statement’s focus on curbing recovery for “injuries sustained during recreational or social activities sponsored by the employer” indicates that the amendments were aimed primarily at overturning those pre-amendment decisions that relied on the employer’s financial support to bring a recreational or social activity within the ambit of the act. The Legislature is presumed to have been thoroughly conversant with the basic principles underlying the pre-amendment case law dealing with employer-compelled activities. When viewed in light of its express concern over tightening the criteria for employer-sponsored activities, the omission of any reference in 34:15-7 to employer-compelled activities suggests the Legislature did not intend to exclude required activities from workers’ compensation coverage as a matter of law. If it had wanted to restrict coverage for activities beyond events merely sponsored by the employer and address employer-compelled activities, it would have said so. Notwithstanding the cost-containment goals of the amendments, that legislative overhaul did not alter the act’s basic design as remedial legislation. Thus, the Court is simply filling the void left by the Legislature’s failure to define “recreational or social activities,” mindful of “the axiomatic principle that the language of the work[ers'] compensation act must be liberally construed in favor of the claimant.” Close v. Kordulak Bros., 44 N.J. 589, 604 (1965). Under that principle, it is concluded that when the Legislature excluded recreational and social activities from the workers’ compensation scheme, it did not intend to shift the cost of compelled activities from employers to employees. Therefore, when an employee establishes that his employer required participation in an activity of a recreational or social nature, courts should consider the activity as they would any other compensable work-related assignment. Recreational and social activities that the employer merely sponsors or encourages are precisely the type of activities that the Legislature intended to exclude from coverage. In those cases, the act requires the employee to establish that the activity is a regular incident of employment and provides some benefit to the employer beyond the improvement in employee health and morale. Compulsion can take a number of forms. When an employer directly commands an employee to engage in an activity, it is axiomatic that the employee has been compelled. However, the reality that indirect pressure on an employee can be as powerful as an explicit order cannot be ignored. When an employee alleges indirect or implicit compulsion, he must demonstrate an objectively reasonable basis for believing that the employer had compelled participation in the activity. Whether the belief is objectively reasonable will depend largely on the employer’s conduct and must be assessed on a case-by-case basis. Relevant factors include whether the employer directly solicits the employee’s participation in the activity; whether the activity occurs on the employer’s premises, during work hours, and in the presence of supervisors, executives, clients, or the like; and whether the employee’s refusal to attend or participate exposes the employee to the risk of reduced wages or loss of employment. The absence of one factor is not fatal. That list is not exhaustive and other fact patterns may suggest compulsion. However, an employee’s mere subjective impression of compulsion standing alone will not bring an activity within the scope of employment. Here, in categorizing Lozano’s use of the go-cart as a recreational activity, the judge of compensation did not address explicitly whether he had an objectively reasonable belief that DeLuca had required him to drive the go-cart. She noted only that “[a]t first [Lozano] didn’t want to get into the go-cart. He must have had a lot of fun; he ran off the track and into the truck, and he was dazed.” From those observations, it cannot be determined whether the judge found Lozano’s claim of compulsion to be objectively reasonable. That he might have received some gratification from the ride does not preclude a conclusion that he reasonably believed that his supervisor had ordered him to drive the go-cart. Because neither the parties nor the compensation judge had the benefit of the interpretation of the statute given here, the matter is remanded to the Division of Workers’ Compensation for a new trial. The following comments are offered for guidance on remand. Lozano might prevail in showing that his operation of the go-cart was expressly compelled and, therefore, a work activity, based on his undisputed testimony that he understood DeLuca’s insistence to “get in” to be an order that he “had to obey.” Alternatively, the judge might view his allegation as a claim of indirect or implicit compulsion. A number of facts are relevant to determining whether his assessment of the situation was objectively reasonable. For example, the record indicates that he was a general laborer, but does not reveal whether his assignments prior to this incident ever included tasks unrelated to his work as a mason. The fact finder must also assess whether he might have been more reluctant to question DeLuca because of the customer’s presence. Further consideration also should be given to the fact that Lozano had no means of returning home because he relied on DeLuca for transportation to and from the workplace. Evidence that he remained under DeLuca’s direction while at the work site should be considered in tandem with the unresolved question of whether he was paid for the time in which the incident occurred. In the interest of fairness, the matter is remanded to afford both parties the opportunity to develop the record in light of the interpretation of 34:15-7 given here. Reversed and remanded to the Division of Workers’ Compensation. Chief Justice Poritz and Justices Long, Verniero, LaVecchia, Albin and Wallace join in Justice Zazzali’s opinion. — Digested by Judith Nallin [The slip opinion is 34 pages long.] For appellant — Raquel Romero (Stephen G. Marshall on the brief). For respondent — David P. Kendall (Francis T. Giuliano; Kendall and Giuliano on the brief).

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