Sponsor an athletic team and you stand to gain a great deal: healthier workers, improved morale, greater teamwork. But those benefits can be quickly undone by a single unfortunate incident. 
For example, is your firm liable if an employee gets hurt while playing on the company softball team? Is the injury covered by workers' compensation? And what about after the game? Could the company be liable for the harassing actions of an employee at a post-game celebration?  Or will it be liable if an employee celebrates a win a little too heartily and gets in an accident on the way home? These questions can be difficult to answer--in part, because workers' comp rules vary from state to state. Further complicating matters is the fact that courts tend to look at a variety of factors in such cases. Among them: 

• Was the game considered an element of the employee's job?

• How have you handled previous injuries?

• Was the game on company property?

• How much of a financial stake did the company have in the team?

You need to keep these factors in mind when deciding whether to sponsor employee athletic teams. Injuries and lawsuits can take the shine off a championship season. And with the spring athletic season already upon us, it's time to start thinking about what you can do to minimize your risks on and off the field. 

Before sponsoring an athletic team, check out your workers' compensation coverage as well as the workers' comp rules in your state. There are two workers' comp issues you should address, says Peter Bennett, an attorney in Portland, Maine, and former chair of the American Bar Association's Employer/Employee Relations Committee. 
First: Find out whether your state's workers' comp statute give you a way to defend yourself against injury claims. For example, some states specifically prohibit certain types of injuries from workers' compensation awards. A common defense to look for is an exclusive remedy provision, which a number of states have. These provisions state that workers can get payment for an injury only through workers' compensation--not through a lawsuit. Because some injuries don't qualify for workers' compensation, however, there are some cases where employees can't get workers'' comp and can't sue you, notes Bennett. Check your state law for these an any other specific provisions. The second issue relates to the company's involvement with team and whether an employee's participation is linked to his work duties. In short, does the injury arise out of employment--is it directly work-related? "If so," says Bennett, "then it's compensable." But drawing the line between work hours and playtime can be difficult in real life. "There is no good rule of thumb for making sense out of the varying results in this category of injuries, "writes Jeffrey V. Nackley in his book Primer on Workers' Compensation. 
To prove his point, Nackley cites a Florida Supreme Court case where a police officer was injured in a softball game.  Although his employer encouraged his participation in the game, his workers' comp claim was disallowed. (Mathias v. South Daytona 350 So. 2d448 Fla. 1977). A case in California had a very different result, however. Like the Mathias case, the California claim involved a worker who was injured in a softball game. But the worker in this case--a legal clerk--won her workers' compensation claim. The reason: A partner in the firm had suggested that she play; because she was only a second-year law student, the court ruled that she was more vulnerable than the average worker to pressure from higher-ups. What's more, she was under additional pressure because the team needed women participants to qualify under league rules. (Ezzy v. Workers' Compensation Appeal Board, 1983 146 Cal. App. 3d 252). That ruling was handed down despite the fact that California's workers' comp laws specifically exclude athletic events, says Philip D. Witte, a partner in the San Francisco firm of Kenney & Markowitza. "There's a specific provision that says that if an employee voluntarily--and that's the key word, voluntarily--participates in a sporting or social event, and it's not part of work-related duties, then it's not covered by worker's compensation," says Witte. However, in the Ezzy ruling, the court ruled that workers' comp covered the clerk's injury because her participation had been less than voluntary. Your best bet, then, is to check your state's workers' comp laws to see if it has any specific provisions for athletic events.  After all, California's ban on covering after-hours activities is not unique.  Nackley says Nevada's workers' comp law specifically excludes injuries sustained at a social gathering unless the workers are paid. Rhode Island's workers' comp laws exclude employer-sponsored social or athletic activity. 

One way to decrease your liability is to require employees to sign waivers before enrolling them on company teams. The waivers--which are used by many employers--inform employees of the degree of company liability. 
The waiver for one Midwestern publishing company informs corporate athletes that the company team does not serve an official company function. By signing the waiver, athletes agree not to hold the company or any employee liable for injuries they may suffer. The waivers also serve another purpose: They make employees responsible for determining if they are healthy enough to participate in the activity. But waivers do not offer all-encompassing protection.  For example, if they are written too vaguely, says Witte, they might not be enforceable. Here's an example: Say you ask workers to sign a waiver that states "I waive any right to sue my employer for any injuries that result from my participation in athletic events." That waiver might sound fairly narrow and might appear to offer you solid protection. But, Witte points out, what happens if an employee drops a pitcher of beer on another employee's foot during the post game celebration? That event might not be covered under the waiver. Waivers that cover intentional acts by fellow employees--such as fights--may not protect you at all. What's more, waivers against sexual harassment are useless because sexual harassment is against public policy.  "A company can't protect itself from sexual harassment with a waiver, "says Witte. "The only way they can do that is to prevent it from happening in the first place." Are waivers worth the trouble? Yes. "If you have a narrowly written waiver agreement, and there's some kind of practical way of signing off on it," Witte says, "its' better than not having a waiver.  But there's still no guarantee that the waiver will be enforceable." Witte also points out that asking workers to sign a waiver can sometimes engender ill-will because workers may feel they are being pushed into giving up their rights. If that happens, point out to workers that you are not asking for anything unusual: Waivers are standard at most sports leagues and athletic equipment rental shops. 

What factor most determines your liability? "It really comes down to the company's level of involvement," says Bennett. He emphasizes that employers can run a safer course if they minimize their involvement in sponsoring a team. "If the company just pays a registration fee, it doesn't have too much to worry about," he says. Companies start to run into trouble, says Bennett, when they: 

• Sponsor games on company time.

• Force or coerce people to participate in company sporting events.

•    Serve alcohol at after-work games.

• Hold sporting events on company property.

Your level of involvement can be as minimal as paying the fee and lending your name. But if you've traditionally been more involved with your athletic teams, you need to step somewhat cautiously. To minimize your risk, consider the following options: 
    Reduce your stake in the team. 
Some companies pay all the costs involved in sponsoring a team, from uniforms to equipment to post game refreshments.  But the smaller your financial stake in a team, the less likely it is that the team will be viewed as an extension of your workplace. If you already contribute to the team, consider asking players to chip in for some of the costs. For example, if the company buys the team uniforms, you could ask players to provide their own equipment and pay their own registration fees. 
    Emphasize voluntary participation. 
Employees must be clearly told that participation in sports is an elective activity. Coercing employee participation increases the risks that team activities will be considered part of an employee's work duties. Be careful because coercion can be indirect or subtly tied to workplace concerns. An employee might worry about her chances for advancement if other workers on a company team have a special opportunity to bend the boss's ear. 
    Avoid booze. 
A dry playing field is the best playing field. If you want to serve refreshments at a sporting event, make them nonalcoholic. In fact, the only sports suits Bennett knows of involved alcoholic beverages severed at events on company-owned athletic fields. "And typically," he says, "it's not so much for an injury while playing softball, it's the car accident on the way home." The best approach, he says, is to prevent all alcohol consumption. "In this day and age, prohibition is the only rule that seems to work." 
    Make your policies clear. 
Is the company responsible for anything that happens at get-togethers after the game? Again, it depends on the level of the company's involvement--and its level of pre-emptive action. You might reduce your odds of getting embroiled in a sexual harassment suit if your company has a strict policy prohibiting harassment in all situations. (See "Holiday Festivities: The Risks of Free-flowing Booze," You and the Law, December 1994.) To protect yourself, restate your policy to members of employee sports teams. 
    Choose game sites carefully. 
    Consider holding athletic events on property not owned by the company. Holding games at off-site facilities may reduce your liability. One alternative used by some companies: Sponsor teams within a local park district league. Because the league is already in place, the company has less organizing work. The teams then play at park district facilities, which are subject not only to park safety and maintenance standards but also often carry their own sets of rules prohibiting alcohol and horseplay. 
    Apply your policies uniformly. 
Have a policy in place and apply it consistently to all sports-related injuries. If those injuries are automatically covered by your workers' comp insurance, then always let workers' comp handle them. If they're not covered by workers' comp, think twice before getting generous. The reason: If you decide to pay for the splint on a volleyball player's jammed finger, you might also get stuck paying for your shortstop's orthodontia three months later--and other, more sever injuries after that. 

You and the Law/April 1996