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Lozano v. Frank DeLuca Construction

March 10, 2004

PORFIRIO A. LOZANO, PETITIONER-APPELLANT,
v.
FRANK DE LUCA CONSTRUCTION, RESPONDENT-RESPONDENT.



On certification to the Superior Court, Appellate Division.

SYLLABUS BY THE COURT

In this workers' compensation appeal, the Court considers whether the phrase "recreational or social activities" as used in the Workers' Compensation Act, encompasses activities that, although recreational or social in nature, are compelled by the employer.

Frank DeLuca Construction, a mason contractor, employed petitioner, Porfirio Lozano as a general laborer. Lozano normally worked six days a week between the hours of 8:00 a.m. and 4:00 p.m. Because Lozano was an independent contractor, he had no fixed work location. Rather, he 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 Lozano's supervisor, for transportation between Lozano's home and various work sites.

On the day of the accident, DeLuca picked up Lozano and another employee at their homes and took them to the job site, a private home belonging to Peter Borbas. Lozano and his fellow employee completed their assigned task under DeLuca's supervision, and were ready to return home by approximately 5:00 p.m.

Borbas had three go-carts parked on a paved, circular track that was separate from his driveway. As the two employees waited for DeLuca to take them home, Borbas and DeLuca each got into a cart and began driving around the track. When DeLuca finished, he directed Lozano to "get in" the go-cart. Lozano refused, explaining that he could not drive because he didn't know anything about it. DeLuca then told Lozano again to "get in," reassuring him that "it was easy." According to Lozano, he understood his supervisor's persistence to be a command and, therefore, got into the go-cart. On his first lap around the track, Lozano crashed into a parked truck and sustained severe injuries that required hospitalization and the insertion of a plate and screws in his left ankle.

Lozano filed a claim with the New Jersey Division of Workers' Compensation, asserting that he had sustained injuries from an accident arising out of and in the course of his employment. DeLuca filed an answer disputing the work-relatedness of the accident, and the parties subsequently agreed to bifurcate the trial, addressing solely the issue of liability. The only witness at trial was Lozano, who testified to the circumstances of the accident and further that he had interpreted DeLuca's directive to "get in" as a command. He further testified that the accident occurred within minutes of his completion of the construction project.

At the conclusion of Lozano's testimony, DeLuca moved for dismissal, arguing that Lozano had failed to establish the requisite causal relationship between his employment and the accident. Since Lozano admitted that the accident occurred after he completed his work, DeLuca maintained that this would be a case of horseplay or, in the alternative, a recreational activity after work had ended. Under either category, DeLuca 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 in opposition to the motion. He further stressed that he was required to remain there until his employer took him home. Thus, Lozano maintained that he was still in the course of his employment when DeLuca commanded him to get in the go-cart.

The Compensation judge granted DeLuca's motion to dismiss, concluding that Lozano was engaged in "recreational activity" at the time of the accident that was outside the scope of his employment. Despite Lozano's presence on the job site, the judge found that he had been "off the clock" at the time of the accident. In an unpublished opinion, the Appellate Division affirmed the dismissal for the reasons expressed by the Judge of Compensation in her oral opinion.

The Supreme Court granted Lozano's petition for certification.

HELD: When an employer compels an employee's participation in an activity generally viewed as recreational or social in nature, the employer thereby renders that activity work-related as a matter of law; to recover under this theory of compulsion, the injured employee must establish that he or she engaged in the activity based on an objectively reasonable belief that participation was required.

1. To recover under the Workers' Compensation Act, an employee injured during a recreational or social activity must satisfy a two-prong test: (1) the activity must be a "regular incident of employment," and (2) the activity must produce a benefit to the employer beyond improvement in employee health and morale. (pp. 6-7)

2. Employing familiar principles of statutory construction, because the meaning of the phrase "recreational or social activities" is not self-evident from the perspective of an employee, the Workers' Compensation Act's silence on the meaning of the disputed phrase requires inquiry to extend beyond the plain language of N.J.S.A. 34:15-7. (pp. 7-9)

3. Prior to the 1979 amendments to the Workers' Compensation Act, there were two categories of cases dealing with activities ostensibly unrelated to work: those involving employer-sponsored recreational and social activities in which the employee voluntarily engaged (requiring compensation to be based on a showing either that the activity was a regular incident and condition of employment or that the degree of employer support indicated either an indirect or direct benefit to the employer); or those involving employer-compelled activities. (pp. 9-17)

4. Although the legislative intent to curb awards for recreational and social activities is evident from the legislative history of the 1979 amendments to the Workers' Compensation Act, the committee statements do not reveal how the Legislature intended to achieve that goal. (pp. 18-22)

5. In view of the case law in existence in 1979, the phrase "recreational or social activities" as it appears in N.J.S.A.

34:15-7, encompasses only those activities in which participation is not compulsory. When an employer compels an employee to participate in an activity that ordinarily would be considered recreational or social in nature, the employer thereby renders that activity a work-related task as a matter of law. That factual context does not implicate the two-prong test set forth in N.J.S.A. 34:15-7. (pp. 22-23)

6. When viewed in light of the Legislature's express concern over tightening the criteria for employer-sponsored activities, the omission of any reference in N.J.S.A. 34:15-7 to employer-compelled activities suggests that the

Legislature did not intend to exclude required activities from workers' compensation coverage as a matter of law. A contrary reading of that section would impose on employees a classic Hobson's choice and would do violence to the long-standing recognition that the act is remedial in nature. (pp. 23-24)

7. When an employee establishes that his or her 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. By contrast, recreational and social activities that the employer merely sponsors or encourages are excluded from coverage. In those cases, the employee must establish that the activity is a regular incident of employment and that it provides some benefit to the employer beyond the improvement in employee health and morale. (p. 25)

8. When an employee alleges indirect or implicit compulsion, the employee must demonstrate an objectively reasonable basis in fact for believing that the employer had compelled participation in the activity. Whether the employee's belief is objectively reasonable will depend largely on employer's conduct and must be assessed on a case-by-case basis, taking into consideration such factors as 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, clients, and the like; and whether the employee's refusal to participate exposes him to the risk of reduced wages or loss of employment. (pp. 25-27)

9. In categorizing Lozano's use of the go-cart as a recreational activity, the Judge of Compensation, unguided by the Court's holding, did not address explicitly whether Lozano had an objectively reasonable belief that DeLuca had required him to drive the go-cart. Although DeLuca did not offer any testimony or otherwise challenge Lozano's allegation of compulsion, what DeLuca might offer in rebuttal cannot be speculated, and in the interest of fairness, the matter is remanded to the Division of Workers' Compensation to afford both parties the opportunity to develop the record in light of the Court's interpretation of N.J.S.A. 34:15-7.

Judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Division of Workers' Compensation for further proceedings consistent with this opinion.

CHIEF JUSTICE PORITZ and JUSTICES LONG, VERNIERO, LaVECCHIA, ALBIN, and WALLACE join in JUSTICE ZAZZALI's opinion.

The opinion of the court was delivered by: Justice Zazzali

Argued December 2, 2003

In this workers' compensation case, we consider whether the phrase "recreational or social activities" as used in the Workers' Compensation Act encompasses activities that, although recreational or social in nature, are compelled by the employer.

While in the employ of a mason contractor, petitioner sustained an injury when he attempted to drive a go-cart on the property of his employer's customer. Petitioner alleges that he drove the go-cart only after his employer ordered him to do so.

The Division of Workers' Compensation denied petitioner's claim for benefits, based on the recreational nature of go-cart driving and petitioner's failure to satisfy the two-part statutory test applicable to recreational and social activities. The Appellate Division affirmed.

We hold that when an employer compels an employee's participation in an activity generally viewed as recreational or social in nature, the employer thereby renders that activity work-related as a matter of law. We also hold that to recover under a theory of compulsion, the injured employee must establish that he or she engaged in the activity based on an objectively reasonable belief that participation was required. On the facts in this record, we cannot determine whether petitioner's claim that his employer commanded him to drive the go-cart is ...


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