Title: Porfirio A. Lozano v. Frank DeLuca Construction

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). 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. Petitioner-Appellant, v. FRANK DE LUCA CONSTRUCTION, Respondent-Respondent. Argued December 2, 2003 Decided March 10, 2004 On certification to the Superior Court, Appellate Division. Raquel Romero argued the cause for appellant (Ms. Romero, attorney; Stephen G. Marshall, on the brief). David P. Kendall argued the cause for respondent (Francis T. Giuliano, attorney; Mr. Kendall and Mr. Giuliano, on the brief). JUSTICE ZAZZALI delivered the opinion of the Court. 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 objectively reasonable. Therefore, we reverse the judgment of the Appellate Division and remand for further proceedings consistent with this opinion. [Harrison v. Stanton, 26 N.J. Super. 194, 199 (App. Div. 1953), aff d o.b., 14 N.J. 172 (1954).] The absence or presence of a particular factor was not dispositive. Ricciardi v. Damar Prods. Co., 45 N.J. 54, 59-60 (1965) (finding that employer-sponsored picnic fell within act s scope even though attendance at picnic was voluntary and picnic was not held on work premises). Rather, courts assessed the work-relatedness of the recreational or social activity based on the totality of the circumstances in any given case. Id. at 60 (clarifying relevant inquiry as whether the event is sufficiently work-connected to bring the employees within the coverage of the compensation law ). Although employer compulsion was a relevant factor, few cases dealt with injuries suffered during mandatory recreational and social activities. Instead, cases typically involved the more complicated scenario of voluntary recreational activities that the employer either sponsored, permitted, or encouraged. See, e.g., ibid. (employer-sponsored picnic); Complitano v. Steel & Alloy Tank Co., 34 N.J. 300 (1961) (employer-sponsored softball game held after working hours and off-premises), rev g on dissenting opinion below, 63 N.J. Super. 444 (App. Div. 1960) (Conford, J.A.D., dissenting); Tocci v. Tessler & Weiss, Inc., 28 N.J. 582 (1959) (employer-sponsored softball game organized by employees, but played on employer s property during lunch hour); Stevens v. Essex Fells Country Club, 136 N.J.L. 656 (Sup. Ct. 1948) (employer-sponsored golf tournament); Kelly v. Hackensack Water Co., 10 N.J. Super. 528 (App. Div. 1950) (annual outing sponsored and encouraged by employer); Padula v. Royal Plating & Polishing Co., 14 N.J. Super. 603 (Law. Div. 1951) (employer-sponsored softball game); Fick v. Am. Mut. Liab. Ins. Co., 26 N.J. Misc. 244 (Dep t Labor 1948) (attendance encouraged by employer at picnic sponsored by employee association). Early cases denied compensation for injuries sustained during employer-sponsored recreational and social activities at which attendance was not required and from which the employer did not receive a clear business benefit. E.g., Stevens, supra, 136 N.J.L. at 658-59 (denying compensation to caddy for injury suffered during weekly golf tournament sponsored by employer exclusively for employees); Padula, supra, 14 N.J. Super. at 606 (holding injuries suffered during employer-sponsored softball game non-compensable); Fick, supra, 26 N.J. Misc. at 245 (concluding that picnic organized by employee association was not related to employment in the statutory sense ). Those decisions were animated by a common concern that employers should not bear the cost of injuries sustained during recreational activities that have no work connection, aside from an employer s financial contribution, and in which employees engage voluntarily for their own personal benefit. See Stevens, supra, 136 N.J.L. at 659 (explaining that [g]enerosity alone to one s employee does not render one liable for compensation under the act for injury suffered while in the enjoyment of the favor ). In a series of cases beginning with Tocci, however, we departed from that approach and expanded the scope of coverage for voluntary recreational and social activities. Tocci involved an employee who was injured while engaging in a customary lunch-time softball game played on the company s property during the employee s lunch hour. 28 N.J. at 584-86. Although the employees initiated and organized the games, the employer supplied some necessary equipment. Id. at 585. A divided Court reversed the dismissal of the employee s claim. The majority found that the employer s financial contribution, coupled with the time, place, and customary nature of the games, rendered the activity a regular incident and condition of employment. Id. at 593-94. The majority deemed the recreational softball games no different from other customary activities considered to be within the course of employment, such as eating lunch or taking a break for coffee or a cigarette. Id. at 593. In view of that analogy and consistent with the prescribed liberal construction of the [act], the majority concluded that the accidental injury had sufficient work connection to fall within the act s coverage. Ibid. The two dissenting justices argued that recovery should be denied in the absence of employer compulsion and employer benefit. Id. at 597 (Heher, J., dissenting). Citing the fact that the [employees] who used the land for play were in the pursuit of their own desires, unrelated to the employment, the dissent criticized the analogy between eating lunch and playing softball. Id. at 598. In addition, the dissent, indirectly presaging this Court s decision in Complitano, rejected the majority s reliance on the employer s financial support. Id. at 598-99. The dissent maintained that an employer s monetary contribution, given without the prospect of a commercial benefit, should not be considered as bringing a voluntary game within the ambit of the employment. Id. at 599 (citing, among other cases, Stevens, supra, 136 N.J.L. 656). A divided Court further expanded the scope of compensable recreational and social activities in Complitano. As indicated above, early courts denied coverage when the employer s only involvement in the recreational activity entailed financial support with no evident commercial motive. E.g., Stevens, supra, 136 N.J.L. at 658. The majority s decision in Complitano, however, broadened the inquiry to one of whether the employer s participation in or contribution to the arrangements for the recreation is such that it is reasonably inferable that a benefit was expected therefrom, such as company advertising, or betterment of employer-employee relations . . . . Sarzillo v. Turner Constr. Co., 101 N.J. 114, 118 (1985) (quoting Complitano, supra, 63 N.J. Super. at 463 (Conford, J.A.D., dissenting)). The majority of the Court accepted the reasoning that an employer s financial support for a recreational activity can provide an adequate connection to employment to warrant an award of compensation. Complitano, supra, 63 N.J. Super. at 466-67 (Conford, J.A.D., dissenting). In essence, the majority permitted courts to infer an employer benefit from the employer s monetary contribution. Id. at 466. A review of the pre-amendment case law reveals only one published opinion dealing with a compelled social activity. In Harrison v. Stanton, supra, an employee sought coverage under the act for an injury suffered while driving his child s babysitter home. 26 N.J. Super. at 198. The employee had hired the babysitter so that he and his wife could attend an event sponsored by an organization that his employer had directed him to join. Id. at 199-200. The employer facilitated the employee s attendance at the event by defraying the expense of the babysitter and providing transportation for the employee and his wife. Id. at 197. At trial, the employee explained, I joined [the organization] under the direction of [my employer]. Id. at 198. Similarly, the employer acknowledged that whenever it was possible for [the employee] to attend [an event sponsored by the organization,] I wanted him to, because I feel it is good for business for him to be there and mingle with the people. Id. at 197. Noting that the employee s attendance at the event was expected, if not directed by the employer, the Appellate Division described the activity as an assigned duty and held that the accident arose out of and in the course of employment. Id. at 198, 200. We affirmed for the reasons expressed by the panel, 14 N.J. 173 (1954), thereby embracing the principle that with respect to recreational and social activities, compulsion is the sine qua non of work-relatedness. In the years before the 1979 amendments, courts also employed the basic philosophy underpinning Harrison to compensate employees who were injured while engaging in a mandated activity that, although non-social in nature, was nevertheless unrelated to the employee s day-to-day job duties. For example, in Ferragino v. McCue s Dairy, 128 N.J.L. 525, 526 (Sup. Ct. 1942), the court considered whether to allow recovery to a dairy-company employee who was injured while following his employer s instruction to help a local church move a piano. Recognizing that [m]oving a church piano . . . is not ordinarily per se an incident to the dairy business, the court observed that it may become so when done, as here, on the order of the employer for a customer in the effort to build up good will and retain the customer s friendly interest. Id. at 527. The court also acknowledged the difficult dilemma faced by employees when confronted with a supervisor s order, explaining that it is not easy to see how [the employee] could have refused to obey except at the risk of losing his job. Ibid. Viewing the ordered activity as part of the employee s contract of hire, the court affirmed the award of compensation. Ibid.; see also Wilkerson v. Steinberg & Spielfogel, Inc., 20 N.J. Misc. 306, 310 (C.P. 1942) (awarding compensation to grocery employee for injury sustained while moving furniture at supervisor s direction, despite unrelatedness of task to normal job duties). From that summary of pre-amendment decisions, we discern two categories of cases dealing with activities ostensibly unrelated to work. The first category encompasses cases involving employer-sponsored recreational and social activities in which the employee voluntarily engaged. For injuries falling within that category, Tocci and Complitano offered alternative theories for recovery. An employee could establish an adequate link between the recreational activity and work by demonstrating either that the time, place, and customary nature of the activity rendered it a regular incident and condition of employment, or that the degree of employer support indicated either an indirect or direct benefit to the employer. The second category of cases involved employer-compelled activities. As Harrison and Ferragino demonstrate, courts in those circumstances deemed that a mandated activity fell within the scope of employment regardless of the activity s departure from the employee s normal job duties. PORFIRIO A. LOZANO, Petitioner-Appellant, v. FRANK DE LUCA CONSTRUCTION, Respondent-Respondent. DECIDED March 10, 2004 Chief Justice Poritz PRESIDING OPINION BY Justice Zazzali CONCURRING/DISSENTING OPINIONS BY DISSENTING OPINION BY