Attorney for Appellant Attorney for Appellees
Eric D. Johnson Todd C. Barsumian
Indianapolis, Indiana Evansville, Indiana
________________________________________________________________________
In the
Indiana Supreme Court
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No. 42S01-0401-CV-20
Donald Knoy,
Appellant (Defendant below),
v.
Joe W. and Janice Cary,
Appellees (Plaintiffs below).
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Appeal from the Knox Superior Court, No. 42D01-0109-CT-019
The Honorable W. Timothy Crowley, Judge
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On Petition To Transfer from the Indiana Court of Appeals, No. 42A01-0211-
CV-445
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August 25, 2004
Boehm, Justice.
Joseph Cary was injured when a tractor driven by his coworker, Donald
Knoy, malfunctioned during an after-hours community service project
sponsored by his employer, Gemtron Corporation. We hold that the Indiana
Worker’s Compensation Act covers this injury.
Factual and Procedural Background
Cary and Knoy worked for Gemtron Corporation, a Vincennes manufacturer
of tempered glass shelving for refrigerators and other appliances. Gemtron
had a “customer oriented master plan,” one of the goals of which was to
“participate with applicable local environmental groups or activities.”
Seemingly in furtherance of this goal, Gemtron sponsored a cleanup project
at a Vincennes city park. Notice of the project was posted on a company
bulletin board inviting employees to participate. The company sought to
publicize the event in the local newspaper and supplied participating
employees with work gloves, food, and beverages. Knoy supplied a tractor
for use in the project and Gemtron provided a chain for use with the
tractor in removing debris from a riverbank. Cary was injured during the
cleanup activity, and alleges his injury resulted from Knoy’s negligent
operation of the tractor.
Cary filed suit against Knoy in Knox Superior Court. Knoy moved to
dismiss, arguing that the trial court lacked subject matter jurisdiction
because Cary’s exclusive remedy was under the Worker’s Compensation Act.
The trial court denied the motion but certified the order for interlocutory
appeal, and the Court of Appeals affirmed. Knoy v. Cary, 794 N.E.2d 572,
578 (Ind. Ct. App. 2003). This Court granted transfer. Knoy v. Cary, 812
N.E.2d 791 (Ind. 2004).
Injuries in the Course of Employer Sponsored Activities
The only issue presented in this appeal from denial of a motion to
dismiss is whether Cary’s claim is barred by the Worker’s Compensation Act.
That Act provides the exclusive remedy for injuries that “arise out of and
in the course of” a person’s employment. Ind. Code § 22-3-2-2 (1998). If
the Act covers an injury, the courts have no jurisdiction to entertain
common law claims against the employer or a fellow employee. Id. Cary’s
suit against Knoy therefore presents a question of subject matter
jurisdiction. If the facts are disputed and the trial court conducted an
evidentiary hearing and issued findings of fact, this Court will defer to
findings of the trial court unless they are clearly erroneous. GKN Co. v.
Magness, 744 N.E.2d 397, 401 (Ind. 2001). Here, however, the underlying
facts are not disputed. The trial court found only that Cary’s injury “did
not arise out of and in the course of his employment with Gemtron
Corporation” and that the court therefore had subject matter jurisdiction
to hear his suit against Knoy. These are conclusions of law reviewed de
novo.
An injury “arises out of” employment when a causal connection exists
between the injuries sustained and the duties or services performed by the
injured employee. Milledge v. The Oaks, 784 N.E.2d 926, 929 (Ind. 2003)
(citations omitted). A causal connection exists when a reasonable person
would consider the injury to be the result of a risk incidental to
employment or when there is a connection between employment and the injury.
Id. An accident occurs “in the course of employment” when it occurs at
the time and place of employment while an employee is fulfilling his
employment duties. Id.
In the early days of worker’s compensation, injuries sustained during
after-hours work activities were generally not compensable. See, e.g.,
Wagner v. Buescher Band Instrument Co., 125 Ind. App. 103, 107-08, 122
N.E.2d 618, 620 (1954); Tom Joyce 7 Up Co. v. Layman, 112 Ind. App. 369,
376, 44 N.E.2d 998, 1000 (1942). However, in Noble v. Zimmerman, 237 Ind.
556, 146 N.E.2d 828 (1957), this Court allowed recovery under the Worker’s
Compensation Act for an employee’s death that occurred at an after-hours
activity sponsored by his employer. The employer in Noble held a business
meeting at his lakeside summer residence with the understanding that at the
conclusion of the meeting, dinner would be provided and there would be an
opportunity for the employees to enjoy swimming and boating. Id. at 558,
829. After the business meeting concluded, an employee was injured diving
into the lake and subsequently died. In sustaining compensation for his
death under the Worker’s Compensation Act, this Court explained that
injuries suffered while participating in after-hours recreational
activities are usually not compensable because the injuries typically occur
when the employee is not performing any duty related to his employment.
Id. at 563-64, 831-32. The Court reasoned, however, that “in recent years
it has become increasingly evident that employers are more and more
utilizing recreational programs for their employees . . . in aiding and
promoting better business relations with persons in their employ.” Id. 569-
70, 834. The Court concluded that the employee’s injury arose out of and
in the course of his employment. Id. at 570, 835.
The Court of Appeals reached the same conclusion in a similar case,
involving an injury during an after-hours party for the employees sponsored
by the employer. Ski World, Inc. v. Fife, 489 N.E.2d 72, 73 (Ind. Ct. App.
1986). The court reasoned that this Court’s emphasis in Noble was not on
whether attendance at the party was required, but on the nexus between the
claimant’s employment and the party. Id. at 75. The court pointed out
that Ski World “encouraged and therefore presumably expected its employees
to attend the party. . . . provided the food, the refreshments, the
entertainment and the recreational equipment. . . . and believed that
holding such an event would be in its best business interests.” Id. at 77.
This was sufficient connection between the employer’s business and the
recreational activity to support coverage. Id.
As Noble explained, where the employer’s interests in sponsoring an
after-hours activity are not merely altruistic, but are also intended to
improve the business, the activity may be incidental to employment. Noble,
146 N.E.2d at 571, 835. For example, the court in Weldy v. Kline, 616
N.E.2d 398, 405 (Ind. Ct. App. 1993), held that when an employee was
injured at an after-hours party intended to promote camaraderie among the
employees and otherwise benefit the employer, the injury arose out of
employment. Like the interest in generating goodwill among the employees,
Gemtron’s interest in fostering goodwill in the community was calculated to
confer a business benefit. Even if Gemtron’s motives in conceiving and
implementing the project were largely altruistic and certainly laudable, it
was also in Gemtron’s business interest to involve itself in community
projects. Gemtron did not require attendance at the cleanup and did not
receive or expect a direct business benefit. Citing Noble, and Ski World,
the Court of Appeals majority reasoned that for an after-hours activity to
fall within the ambit of employment, participation must be mandatory and
the employer must receive some direct business benefit from the activity.
Knoy v. Cary, 794 N.E.2d 572, 576 (Ind. Ct. App. 2003). We do not agree
that mandatory attendance is required. Rather, we agree with Judge
Friedlander, who noted in dissent that although the business meeting in
Noble was mandatory, the swimming and boating activities after the meeting
were not. Id. at 579. Similarly, in Ski World, attendance was voluntary,
but encouraged. Ski World, 489 N.E.2d at 77. In this case, attendance at
the cleanup activity was not mandatory, but Gemtron encouraged it by
posting notices of the project on employee bulletin boards and inviting
employees to participate. Gemtron also provided tools and refreshments for
the participants.
As Gemtron’s efforts to publicize the cleanup demonstrate, an
employer’s public image is a significant business consideration. Gemtron’s
sponsorship of and participation in the project served its business
interests by enhancing its image, fostering a good relationship with the
local community, and team building among its employees. The reputation of
a business as a good citizen of the community is important in obtaining and
retaining employees as well as in customer relations and in some cases
governmental relations. Finally, we certainly do not wish to discourage
activities such as Gemtron’s by adding to the cost. However, the effect of
finding worker’s compensation to cover such an activity is sometimes to the
employer’s benefit by denying a tort recovery and sometimes to its
detriment by awarding worker’s compensation benefits. The worker’s
compensation law is to be construed broadly. Daugherty v. Indus. Contr. &
Erecting, 802 N.E.2d 912, 919 (Ind. 2004) (citations omitted); Milledge,
784 N.E.2d at 933 (citations omitted); Evans, 491 N.E.2d at 971. If that
construction is thought to inhibit corporate participation in charitable
and community events unduly, that balance is one for the legislature to
adjust.
Conclusion
The judgment of the trial court is reversed. This case is remanded
with instructions to dismiss the complaint.
Shepard, C.J. and Dickson, Sullivan and Rucker, JJ., concur.