Attorney for Appellant Attorney for Appellees
Eric D. Johnson Todd C. Barsumian
Indianapolis, Indiana Evansville, Indiana
Indiana Supreme Court
Appellant (Defendant below),
Joe W. and Janice Cary,
Appellees (Plaintiffs below).
Appeal from the Knox Superior Court, No. 42D01-0109-CT-019
The Honorable W. Timothy Crowley, Judge
On Petition To Transfer from the Indiana Court of Appeals, No. 42A01-0211-CV-445
August 25, 2004
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 Workers 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 Knoys negligent operation of the
Cary filed suit against Knoy in Knox Superior Court. Knoy moved to
dismiss, arguing that the trial court lacked subject matter jurisdiction because Carys exclusive
remedy was under the Workers Compensation Act. The trial court denied the
motion but certified the order for interlocutory appeal, and the Court of Appeals
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.
Injuries in the Course of Employer Sponsored Activities
The only issue presented in this appeal from denial of a motion to
dismiss is whether Carys claim is barred by the Workers Compensation Act.
That Act provides the exclusive remedy for injuries that arise out of and
in the course of a persons 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.
Carys 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 Carys 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 workers 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 Workers Compensation Act for an employees
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 Workers 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 employees 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 Courts emphasis in Noble was not
on whether attendance at the party was required, but on the nexus between
the claimants 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 employers business and the recreational activity to
support coverage. Id.
As Noble explained, where the employers 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, Gemtrons interest in fostering goodwill in the community was calculated
to confer a business benefit. Even if Gemtrons motives in conceiving and
implementing the project were largely altruistic and certainly laudable, it was also in
Gemtrons 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 Gemtrons efforts to publicize the cleanup demonstrate, an employers public image is
a significant business consideration. Gemtrons 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 Gemtrons by adding to the cost. However, the effect of finding
workers compensation to cover such an activity is sometimes to the employers benefit
by denying a tort recovery and sometimes to its detriment by awarding workers
compensation benefits. The workers 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.
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.