Douglas v. Ad Astra Information Systems, L.L.C.

Malone, J.:

Ad Astra Information Systems, L.L.C., and Hartford Insurance Company (collectively Ad Astra) appeal the decision of the Workers Compensation Board (Board) that Danny Douglas’ lung injury arose out of and in the course of his employment with Ad Astra. Douglas, who worked as a computer support *443analyst for Ad Astra, was injured while racing a go-cart at an off premises event hosted by Ad Astra during regular work hours. Ad Astra claims that Douglas is not entitled to workers compensation benefits because his injuries were sustained during a recreational or social event as contemplated by K.S.A. 2008 Supp. 44-508(f).

In 2006, Douglas was employed by Ad Astra, a software company in Overland Park, Kansas. His job was to answer questions from customers and solve problems concerning Ad Astra’s software products between the hours of 8 a.m. and 5 p.m., Monday through Friday. On Friday, November 3, 2006, Douglas received an email at work regarding a company event that was scheduled that afternoon at Sadler’s in Olathe, Kansas. Sadler’s is a recreational facility open to the public where patrons come to play video games, play pool, eat, and race go-carts. Ad Astra scheduled the event primarily to thank employees for their extra work at a recent conference for company clients. Douglas also considered the event to be a “team builder.” Employees were given a choice of either going to the event or remaining at work that afternoon. Douglas felt pressured to attend the event to demonstrate that he was part of Ad Astra’s team.

Douglas arrived at Sadler’s at about 12:30 p.m., and he was greeted by Jackie Shaver, Ad Astra’s coowner. She directed Douglas to a private meeting room where food had been prepared exclusively for Ad Astra’s employees. Ad Astra paid for all the employees’ food and the rental fees at Sadler’s. While the food was being served, Jackie Shaver divided the employees into teams for competitive events that were planned for the afternoon. At the beginning of the meeting, Tom Shaver, Ad Astra’s other coowner, thanked the employees for their extra work at the conference. He also discussed the release of a new software product, and Douglas considered this a pep talk.

Ad Astra reserved Sadler’s go-cart race track exclusively for its employees, and Douglas testified that employees were encouraged to race the go-carts. Douglas normally would not race a go-cart, but he agreed to do so because he wanted to be part of his team. Douglas testified that the teams were being encouraged to go as fast as they could because there would be prizes for those teams *444with the fastest time. Douglas testified that the go-cart racing “was meant to boost morale and boost sales to kind of energize the company.”

While racing his go-cart, Douglas swerved to avoid a stopped go-cart and hit a tire wall. He was ejected from the go-cart onto his right side. Douglas did not complete the race because he was in pain. However, he stayed at Sadler’s until the event was over because he did not believe that he was free to leave before 5 p.m. Douglas received his normal pay for that afternoon.

Douglas’ pain continued to worsen, so he sought medical treatment at St. Luke’s emergency room. X-rays were taken, and Douglas was prescribed some pain medication. Over the next 2 weeks, Douglas’ condition progressively worsened, so he returned to St. Luke’s emergency room. X-rays were taken again which revealed that Douglas’ right lung was filling with fluid. Douglas’ family physician referred him to a thoracic surgeon, Dr. Kevin L. Mayer, who performed surgery on November 30, 2006, to remove the fluid from his lung. It was also determined that Douglas had suffered a rib fracture. Douglas was off work for a few weeks following his surgery and received his regular pay.

Douglas filed a workers- compensation claim, and the case proceeded to a regular hearing before the administrative law judge (ALJ). In addition to Douglas’ testimony, Jackie Shaver testified that the event at Sadler’s was a “thank you” to Ad Astra’s employees for their extra work at the conference. She further testified that attendance at the event was not mandatory but she wanted employees to attend the event. However, those employees who did not participate were not reprimanded and simply stayed at the office and worked. Shaver agreed that the event might encourage employees to renew their efforts on behalf of Ad Astra in providing customer service or sales. Ad Astra deducted the expenses for the event on its taxes as a necessaiy business expense.

Tom Shaver testified by deposition that he gave a thank you speech to all those in attendance at the event. He further testified that from his perspective the event was not mandatory and it was supposed to be fun. Shaver agreed the event was intended to create good feelings among the employees towards Ad Astra. Shaver fur*445ther agreed that only Ad Astra’s employees were on the race track during the racing.

Stacy White, Ad Astra’s regional accounts manager, testified by deposition that she received an invitation by email to attend the event. She indicated that it was to be a fun event for all employees due to their hard work at the conference. White agreed that team building might have also been the idea for the event, but this concept was not expressly stated.

Joy Hoffman, Ad Astra’s administrative assistant, testified by deposition that the event was planned by management to be a reward for all the hard work that had been required at the conference. Although Hoffman did not attend the event at Sadler’s, she agreed there was pressure to do so. Hoffman testified that she was concerned that she might be perceived as someone who was not part of the group for not attending the event. She also stated it was her perception that it was a team building event. According to Hoffman, only one or two other employees in the entire company did not attend the event.

After considering the evidence, the ALJ found that Douglas’ injury arose out of and in the course of his employment with Ad Astra, rather than during a recreational or social event as contemplated by K.S.A. 2008 Supp. 44-508(f). Accordingly, the ALJ found that Douglas’ claim was compensable and awarded benefits for a 15% work disability.

Ad Astra requested review by the Board. After a thorough review of the evidence presented to the ALJ, the Board made extensive factual findings. To summarize, the Board found that the event at Sadler’s was a team building exercise to boost employees’ morale and energize Ad Astra’s sales. The Board found that those employees who attended were paid their regular salaiy, and the employees who did not attend were required to remain at work. The Board found that Ad Astra paid for all the food and rental fees for the exclusive use of the go-cart race track, which payments Ad Astra deducted as business expenses for tax purposes. The Board found that Ad Astra assigned and encouraged the teams to drive fast because there would be prizes for those teams with the fastest times. Although Ad Astra intended the event to be a fun way to *446thank its employees for their hard work, the Board found that Douglas and at least one other coworker felt pressured to attend.

The Board noted that K.S.A. 2008 Supp. 44-508(f) does not define the phrase “recreational or social event.” Accordingly, the Board applied the factors set forth in 2 Larson s Workers’ Compensation Law § 22.01 (2009) (Larson’s), to determine whether Douglas sustained an injury within the course of his employment rather than during a recreational or social event. First, the Board found that Ad Astra impliedly required participation in the event by insisting that employees remain at work as the only option to attending the event. Second, the Board found that rewarding employees for past work was not Ad Astra’s sole intention for the event; the coowners also gave a brief speech about a new product and assigned teams, which implied a team building activity. Third, the Board found that although the event did not occur on Ad Astra’s premises, the employees were being paid while in attendance. The Board concluded:

“There was, at a minimum, an implied requirement or some duty to attend the event, and [Douglas] was assigned to a team which indicates that team building was a component of the event. Moreover, he was encouraged to drive fast in the race. He was paid while attending the event at a location reserved for [Ad Astra’s] employees. Understanding that work often entails social interaction and that the Workers Compensation Act was intended to be liberally construed to bring employers and employees within its provisions, the Board finds [Douglas’] accident did not occur during a recreational or social event as contemplated by K.S.A..2007 Supp. 44-508(f).” (Emphasis added.)

Pursuant to the parties’ stipulation, the Board modified the ALJ’s award to reflect a functional impairment rather than a work disability and affirmed the ALJ’s award in all other respects. Ad Astra timely appeals.

On appeal, Ad Astra claims the Board erred in its interpretation and application of K.S.A. 2008 Supp. 44-508(f) by finding that Douglas’ go-cart injury was within the course and scope of his employment. First, Ad Astra argues that the Board erred by applying the factors set forth in Larson’s instead of following the statutory language of K.S.A. 2008 Supp. 44-508(f) to determine whether Douglas sustained an injury within the course of his employment. *447Second, Ad Astra argues that the Board’s factual finding that Douglas was under a duty to attend the event at Sadler’s is not supported by substantial evidence.

Pursuant to K.S.A. 2008 Supp. 44-501(g), the Workers Compensation Act (the Act) shall be liberally construed for the purpose of bringing employers and employees within the provisions of the Act. K.S.A. 2008 Supp. 44-501(a) generally provides that a worker can recover under the Act as follows:

“If in any employment to which the workers compensation act applies, personal injury by accident arising out of and in the course of employment is caused to an employee, the employer shall be hable to pay compensation to the employee in accordance with the provisions of the workers compensation act. In proceedings under the workers compensation act, the burden of proof shall be on the claimant to establish the claimant’s right to an award of compensation and to prove the various conditions on which the claimant’s right depends. In determining whether the claimant has satisfied this burden of proof, the trier of fact shall consider the whole record.” (Emphasis added.)

K.S.A. 2008 Supp. 44-508(f), which provides the basis for the dispute in this appeal, states in relevant part:

“The words ‘arising out of and in the course of employment’ as used in the workers compensation act shall not be construed to include injuries to employees while engaged in recreational or social events under circumstances where the employee was under no duty to attend and where the injury did not result from the performance of tasks related to the employee’s normal job duties or as specifically instructed to be performed by the employer.”

Under K.S.A. 2008 Supp. 44-508(f), an employee is barred from recovery under the Act for injuries to the employee while engaged in recreational or social events when two circumstances are both met. First, the subsection only applies where the employee was under no duty to attend the recreational or social event. Second, the subsection only applies where the injury did not result from the performance of tasks related to the employee’s normal job duties or as specifically instructed to be performed by the employer. Here, there is no question that the second circumstance is met because go-cart racing is not part of Douglas’ normal job duties. Thus, in order to determine whether K.S.A. 2008 Supp. 44-508(f) applied to bar Douglas’ recovery, the Board focused on the first *448circumstance of whether Douglas was under no duty to attend the event at Sadler s.

Initially, Ad Astra argues that the Board erred by applying the factors set forth in Larson’s instead of following the statutory language of K.S.A. 2008 Supp. 44-508(f) to determine whether Douglas sustained an injuiy within the course of his employment. Ad Astra contends that by relying on the Larson’s factors; the Boatd ignored the statutory language of K.S.A. 2008 Supp. 44-508(f).

The Act for Judicial Review and Civil Enforcement of Agency Actions, now renamed the Kansas Judicial Review Act (KJRA), K.S.A. 77-601 et seq., provides the grounds upon which relief may be granted in appeals of workers compensation awards entered on or after October 1,1993. See K.S.A. 2008 Supp. 44-556(a); L. 2009, ch. 109, sec. 23. To the extent that Ad Astra raises an issue concerning the Board’s interpretation of K.S.A. 2008 Supp. 44-508(f), the KJRA governs the scope of review, providing in part that the court shall grant relief only if it determines “the agency has erroneously interpreted or applied the law.” L. 2009, ch. 109, sec. 28(c)(4) (amending K.S.A. 77-621).

The interpretation of statutory provisions under the Act is a question of law. Under tire doctrine of operative construction, the Board’s interpretation of the law is entitled to judicial deference. If there is a rational basis for the Board’s interpretation of a statute, it should be upheld upon judicial review. However, the Board’s determination on questions of law is not conclusive and, though persuasive, is not binding on the court. Casco v. Armour Swift-Eckrich, 283 Kan. 508, 521, 154 P.3d 494 (2007). As the party challenging the Board’s interpretation of a statute, Ad Astra bears the burden of proving its invalidity. See Foos v. Terminix, 277 Kan. 687, 693, 89 P.3d 546 (2004).

We disagree with Ad Astra’s contention that the Board ignored the statutory language of K.S.A. 2008 Supp. 44-508(f). Rather, in interpreting and applying that statute, the Board noted that the Act does not define a “recreational or social event” within the purview of K.S.A. 2008 Supp. 44-508(f). Larson’s devotes an entire chapter to determining whether recreational or social activities are within *449the course of employment. Thus, the Board consulted Larson’s, which provides in relevant part:

“Recreational or social activities are within the course of employment when
(1) They occur on the premises during a lunch or recreation period as a regular incident of the employment; or
' “(2) The employer, by expressly or impliedly requiring participation, or by making the activity part of the services of an employee, brings the activity within the orbit of the employment; or
“(3) The employer derives substantial direct benefit from the activity beyond the intangible value of improvement in employee health and morale that is common to all kinds of recreation and social life.” 2 Larson’s Workers’ Compensation Law § 22.01, p. 22-2.

As the Board noted, the Act does not define what constitutes recreational or social events contemplated by K.S.A. 2008 Supp. 44-508(f). Our appellate courts have often looked to Larson’s when interpreting various provisions of the Act. See, e.g., Sumner v. Meier's Ready Mix, Inc., 282 Kan. 283, 288-89, 144 P.3d 668 (2006) (quoting Larson’s as a leading treatise to define “ ‘course of employment’ ” before interpreting and applying the “ ‘going and coming’ rule” also found in 44-508[f]); Coleman v. Armour Swift-Eckrich, 281 Kan. 381, 382-84, 130 P.3d 111 (2006) (citing Larson’s in overruling prior case law denying compensation to a nonparticipating victim of horseplay); McIntosh v. Sedgwick County, 34 Kan. App. 2d 684, 689-90, 123 P.3d 740, aff'd 282 Kan. 636, 147 P.3d 869 (2006) (citing Larson’s in determining the legislative intent and policy behind the offset provision in K.S.A. 44-50l[h] for duplicate wage-loss benefits).

In determining whether Douglas’ injuries were compensable under the Act, the Board focused on whether he was under no duty to attend the event at Sadler’s. This is the appropriate statutory test being disputed in Douglas’ case. We conclude the Board did not err by consulting the factors set forth in Larson’s in interpreting and applying the exclusionary provision of K.S.A. 2008 Supp. 44-508(f).

Ad Astra’s primary contention on appeal is that the Board erred in concluding that Douglas was under a duty to attend the event at Sadler’s. Ad Astra argues that the Board “evaluated the evidence *450but disregarded the substantial and overwhelming body of evidence that in fact no duty, express or implied, existed for [Douglas] or other employees of Ad Astra to attend the thank-you event at Sadlers.” Ad Astra claims the only evidence that the event was mandatory came from Douglas and was based only on his feelings and beliefs. Ad Astra insists that Douglas’ “feelings do not change the reality of the situation — that the event was not mandatory.”

Whether an accidental injury arises out of and in the course of employment is a question of fact. Titterington v. Brooke Insurance, 277 Kan. 888, 896, 89 P.3d 643 (2004). To be entitled to recovery under the Act, the employee has the burden of proving that he or she suffered an accidental injury arising out of and in the course of employment. K.S.A. 2008 Supp. 44-501(a). The KJRA now provides, in pertinent part, that in reviewing an agency’s factual determinations:

“(c) The court shall grant relief only if it determines . . .:
“(7) the agency action is based on a determination of fact, made or implied by the agency, that is not supported to the appropriate standard of proof by evidence that is substantial when viewed in light of tíre record as a whole, which includes the agency record for judicial review, supplemented by any additional evidence received by the court under dris act.” L. 2009, ch. 109, sec. 28(c)(7) (amending K.S.A. 77-621).

K.S.A. 77-621 was amended effective July 1, 2009, and a new subsection (d) was added to clarify what is meant when a court reviews the evidence “in light of the record as a whole.” L. 2009, ch. 109, sec. 28(c)(7), (d). Although substantive legislative changes usually apply only prospectively, procedural changes generally apply to pending cases unless substantive or vested rights are affected. Owen Lumber Co. v. Chartrand, 276 Kan. 218, 222-23, 73 P.3d 753 (2003). 77-621(d) now provides:

“For purposes of this section, ‘in light of the record as a whole’ means that die adequacy of the evidence in the record before the court to support a particular finding of fact shall be judged in light of all the relevant evidence in the record cited by any party that detracts from such finding as well as all die relevant evidence in the record, compiled pursuant to K.S.A. 77-620 and amendments thereto, cited by any party that supports such finding, including any determinations of veracity by the presiding officer who personally observed die demeanor *451of the witness and the agency’s explanation of why the relevant evidence in the record supports its material findings of fact. In reviewing the evidence in light of the record as a whole, the court shall not reweigh the evidence or engage in de novo review.” L. 2009, ch. 109, sec. 28(d) (amending K.S.A. 77-621).

In conducting its analysis, the Board cited and discussed Hizey v. MCI, 39 Kan. App. 2d 609, 181 P.3d 583, rev. denied 286 Kan. 1177 (2008). Hizey worked as a sales representative for MCI, and her employment generally involved contacting potential customers by phone to attempt to sell MCI long-distance and local telephone services. However, when she was hired, Hizey was informed that she could earn extra money by participating in various, incentive programs. One incentive program created opportunities for employees to earn prizes, cash, or vacation time by voluntarily competing in games such as poker, pie-throwing contests, karoke contests, or dance contests. These incentive activities were organized, announced, and supervised by MCI management and were designed to energize and motivate employees as well as to provide incentives for employees to remain with the company by providing additional opportunities to make money. The employees continued to be paid while they participated in the activities, and the activities always occurred during regular working hours and usually took place on MCTs premises. Although participation was not mandated, MCTs management encouraged employees to participate.

Hizey was injured during a dance contest arranged by MCTs management. MCI claimed that Hizey s injury was not compensable under K.S.A. 2004 Supp. 44-508(f) because it occurred as the result of a voluntary social or recreational activity. The ALJ and the Board disagreed with MCI and concluded that Hizey s injury arose out of and in the course of her employment. Interestingly, the Board consulted Larson’s § 22.01 to conclude the nature of the dance contest was not predominately social or recreational, but rather was within the scope of Hizey’s employment. See 39 Kan. App. 2d at 611-12.

On appeal, this court affirmed the Board’s decision and found that when an employee is on duty and participates in an activity on company premises which is organized, encouraged, and supervised by the employer and which benefits the employer as well as the *452employee, the activity does not fall within the exception for “recreational and social events” under K.S.A. 2004 Supp. 44-508(f). Under the circumstances of the case, the court concluded that the dance contest which resulted in Hizey s injuiy was not a “recreational or social event” and so the two-pronged test of K.S.A. 2004 Supp. 44-508(f) did not apply. 39 Kan. App. 2d at 616.

Although there are similarities between Douglas’ case and Hizey, there are also important differences. Here, for example, the event occurred at Sadler’s, rather than on Ad Astra’s premises, and there was no evidence that Ad Astra made the event a regular part of its operations. More importantly, the result in Hizey was driven by the fact that Hizey’s participation in the dance contest was part of her compensation at MCI. Under the circumstances, the court concluded that the dance contest did not qualify as a “recreational or social event” within the meaning of K.S.A. 2004 Supp. 44-508(f). See 39 Kan. App. 2d at 610-11, 614-16. Here, the event at Sadler’s qualifies as a recreational or social event, but the issue is whether Douglas was under no duty to attend the event. Because of the differences between the facts in Hizey and the facts in the present case, we place less rebanee than the Board on Hizey in determining whether Douglas’ injuiy arose out of and in the course of his employment with Ad Astra.

As previously stated, the primaiy focus of this case is whether Douglas was under no duty to attend the event at Sadler’s. Ad Astra agrees this was a fact issue to be determined by the Board. K.S.A. 2008 Supp. 44-508(f) will be applied to bar compensation under the Act if Douglas was under “no duty” to attend the recreational or social event which caused his injury and the injuiy did not result from the performance of tasks related to the employee’s normal job duties or as specifically instructed to be performed by the employer. Conversely, if Douglas was under some duty to attend the event at Sadler’s, then K.S.A, 2008 Supp. 44-508(f) does not apply to bar compensation under the Act.

Ad Astra argues that Douglas’ attendance at the Sadler’s event was not mandatory. In fact, this is undisputed from the evidence. But just because attendance at the event was not mandatory does not mean that Douglas was under no duty to attend. Here, the *453Board concluded that Douglas was under “some duty” to attend the event at Sadler s. The question we must answer is whether this finding is supported by substantial evidence when viewed in light of the record as a whole.

An important fact upon which the Board relied was that the event at Sadler’s was scheduled during Ad Astra’s regular business hours, as opposed to being scheduled in the evening or on a weekend when Douglas would have been on his own time. Douglas was given a choice to either attend the event or to remain at work. Given this choice, it is not surprising that only two or three employees in the entire company chose not to attend the event. Douglas testified that he did not believe he was free to leave the event before 5 p.m. In fact, even after Douglas was injured on the go-cart track, he stayed at Sadler’s until the event was completed.

Douglas testified that the event at Sadler’s was a “team builder,” and he believed he should attend the event to demonstrate that he was part of Ad Astra’s team. This testimony was corroborated by other witnesses. Stacy White agreed that team building might have been the idea for the event, even though this concept was not expressly stated. Joy Hoffman also testified it was her perception that it was a team building event. Douglas’ perception was also corroborated by the fact that Ad Astra’s employees were divided into teams once they arrived at Sadler’s.

Douglas testified that he felt pressured to attend the event at Sadler’s. This was corroborated by Hoffman’s testimony. Although Hoffman stayed at work and did not go to Sadler’s, she agreed that she felt pressure to attend the event. Hoffman testified that she was concerned that she might be perceived as someone who was not part of the group for not attending the event.

The event at Sadler’s was recreational and social in nature, but it contained some business components as well. Tom Shaver discussed the release of a new software product, and Douglas considered this a pep talk. Shaver agreed the event was intended to create good feelings among the employees towards Ad Astra. Jackie Shaver testified that although attendance was not mandatory, she wanted employees to attend the event. She agreed that the event might encourage employees to renew their efforts on behalf of Ad *454Astra in providing customer service or sales. Ad Astra deducted the expenses for the event on its taxes as a necessary business expense.

There is also evidence in the record that detracts from the Board’s finding that Douglas was under some duty to attend the event at Sadler’s. Tom and Jackie Shaver both testified that the event primarily was intended to thank employees for their extra work at the conference and that attendance at the event was not mandatory. Stacy White corroborated that it was to be a fun event for all employees due to their hard work at the conference. Joy Hoffman testified that the event primarily was intended to reward the employees and that she chose not to attend the event.

In reviewing the evidence in light of the record as a whole, the court shall not reweigh the evidence or engage in de novo review. Given the evidence presented to the Board, we conclude the Board’s factual finding that Douglas was under “some duty” to attend the event at Sadler’s is supported by substantial evidence when viewed in light of the record as a whole. Based upon this finding, the Board did not err in concluding that Douglas’ injury arose out of and in the course of his employment with Ad Astra, rather than during a recreational or social event as contemplated by K.S.A. 2008 Supp. 44-508(f).

Affirmed.