Court Opinion

ID: 4658356
Source: CourtListenerOpinion
Date Created: 2021-02-08 15:07:38.675164+00
Date Added: 2024-06-11T08:01:52.423181
License: Public Domain

SYLLABUS

This syllabus is not part of the Court’s opinion. 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
Court. In the interest of brevity, portions of an opinion may not have been summarized.

           Kim Goulding v. NJ Friendship House, Inc. (A-48-19) (083726)

Argued October 13, 2020 -- Decided February 8, 2021

FERNANDEZ-VINA, J., writing for the Court.

       Under New Jersey’s Worker’s Compensation Act, an employee injured during a
social or recreational activity generally cannot receive compensation for those injuries
unless a two-part exception is met. See N.J.S.A. 34:15-7. In this case, the Court
considers whether the injuries sustained by claimant Kim Goulding at an event hosted by
her employer are compensable.

      Goulding was an employee of North Jersey Friendship House, Inc. (Friendship
House), a non-profit organization that assists individuals with developmental disabilities.
She worked Monday through Friday as a chef/cook, and her responsibilities included
cooking meals for, and teaching vocational classes to, Friendship House’s clients.

       On a Saturday in September 2017, Friendship House hosted its first ever “Family
Fun Day,” which it planned to hold as an annual event moving forward. The event was
designed to provide a safe and fun environment with recreational activities for the clients
of Friendship House and their families. Friendship House employees were asked to
volunteer to work the event, but there were no consequences for those who did not.
Goulding volunteered to work the event as a cook, her normal job at Friendship House.

        On the day of the event, Goulding set up breakfast. While later preparing for
lunch, she stepped in a pothole and fell down, injuring her ankle. Goulding continued to
help the other cooks prepare lunch while keeping her foot iced and elevated. She left in
the afternoon and did not participate in any of the games or activities at the event.

      Goulding filed a claim for worker’s compensation and benefits. Friendship House
maintained that Goulding was not entitled to relief because she was not working for
Friendship House when the injury occurred.

        The workers’ compensation court dismissed Goulding’s claim, determining that
Family Fun Day was a social or recreational event and that the two-part test of N.J.S.A.
34:15-7 was not satisfied. The Appellate Division affirmed. The Court granted
certification. 241 N.J. 66 (2020).

                                             1
HELD: The injury sustained by Kim Goulding while volunteering at her employer-
sponsored event is compensable because, as to Goulding, the event was not a social or
recreational activity. Even if N.J.S.A. 34:15-7 was applicable here, Goulding would still
have satisfied the two-part exception set forth in that statute. Her role at the event, which
was planned to be held annually, was the same as her role as an employee, and but for her
employment at Friendship House, Goulding would not have been asked to volunteer and
would not have been injured. Thus, Goulding’s injury was “a regular incident of
employment.” See ibid. Additionally, Friendship House received a benefit from Family
Fun Day “beyond improvement in employee health and morale.” See ibid. The event
was not a closed event for the Friendship House team. Rather, it was an outreach event
to celebrate and benefit Friendship House’s clients, creating goodwill in the community.

1. The Worker’s Compensation Act is humane social legislation that is liberally
construed to implement the legislative policy of affording coverage to as many workers
as possible. Originally, the Act did not mention “recreational or social activities,” and
compensability depended instead on whether accidents arose “out of and in the course of
employment.” In Tocci v. Tessler & Weiss, Inc., the Court found that injuries sustained
during a lunchtime softball game were compensable because the employer “approved and
encouraged” the game, which quickly “became a customary” activity and “was thereafter
as incidental to the employment” as lunch, coffee or cigarette breaks. 28 N.J. 582, 593
(1959). And in Complitano v. Steel & Alloy Tank Co., , the Court found compensable an
injury sustained in an after-hours, off-premises softball game, where the employer’s
sponsorship of the team was “substantially motivated” by the “intangible benefit[s]” the
company received such as “promotion of the company’s good name before the general
public” and “heightened prestige and civic status” in the community. See 34 N.J. 300
(adopting 63 N.J. Super. 444, 467, 469 (Conford, J.A.D., dissenting)). (pp. 11-15)

2. Under N.J.S.A. 34:15-7, added to the Act in 1979, an injury “arising out of and in the
course of employment” is not compensable if it is sustained during “recreational or social
activities” unless a two-part exception applies. Accordingly, when an employer defends
against a claim by asserting that the employee was injured during a “recreational or social
activit[y,]” a court must first consider whether the activity was, in fact, “recreational or
social” within the meaning of the statute. If the activity was not recreational or social in
nature, then the employer may not invoke that exception to compensation. (pp. 15-17)

3. The Act does not define “social or recreational activity.” The Court has underscored
the ambiguity of that label, noting that “from the perspective of an employee, the
meaning of the phrase ‘recreational or social activities’ is not self-evident.” Lozano v.
Frank DeLuca Constr. 178 N.J. 513, 522 (2004). In Lozano, the Court held 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.” Id. at 518. Significantly, however, the Lozano Court did not find that
non-compulsory activities are always “recreational or social activities.” Determination of

                                             2
whether a non-compulsory activity is a recreational or social activity within the meaning
of the statute thus remains a fact-intensive and case-specific inquiry. (pp. 17-20)

4. Here, the Court disagrees that Goulding’s volunteering at Family Fun Day was a
social or recreational activity. If an employer-sponsored event is designed with the
purpose of benefitting the employer’s clients, and an employee volunteers to help
facilitate the event, the event cannot be deemed a social or recreational activity as to that
employee. N.J.S.A. 34:15-7 applies to “recreational or social activities” -- not
“recreational or social events.” It is the nature of Goulding’s activities at the event that
determine compensability, just as employee compulsion -- not the character of the event
-- determined compensability in Lozano. Family Fun Day, as to Goulding, was not a
social or recreational activity. And, because Friendship House has advanced no other
applicable exception under the Act, Goulding’s injuries are compensable. (pp. 20-22)

5. The Court adds that Goulding would be entitled to compensation under N.J.S.A.
34:15-7’s two-part test even if her volunteer work at Family Fun Day could be deemed a
recreational or social activity: her injury was sustained during an activity that (1) was a
“regular incident of employment” and (2) “produce[d] a benefit to the employer beyond
improvement in employee health and morale.” (p. 22)

6. As to the first prong, the Court distinguishes Sarzillo v. Turner Construction Co.,
where the Court rejected a claim for injuries sustained during a lunchtime game the
employer did not “contribute to, participate in, or encourage.” 101 N.J. 114, 121-22
(1985). Here, Goulding would not have attended the event and been injured but for
Friendship House’s request for volunteers. Moreover, the event took place on the
Friendship House property, and it was organized and sponsored by Friendship House and
advertised by Friendship House to its clients. Further, Family Fun Day -- designed to be
a recurring “annual” event -- can be considered “customary” and was sufficiently related
to the employment, see Tocci, 28 N.J. at 593, particularly for Goulding, who volunteered
to cook at the event in keeping with her regular role at Friendship House. (pp. 22-25)

7. As to the second prong, any benefit the event had to employee health and morale was
incidental to the event, not the driving force behind it. Through Family Fun Day, with its
stated purpose of celebrating clients, their families, and the community, Friendship House
received “intangible benefits” including fostering goodwill in the community, like the
employer in Complitano. And the experience enjoyed at Family Fun Day by the clients
and their families -- the very people Friendship House has made it its mission to serve --
is a separate benefit in and of itself. (pp. 25-27)

       REVERSED and REMANDED to the worker’s compensation court.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON,
SOLOMON, and PIERRE-LOUIS join in JUSTICE FERNANDEZ-VINA’s opinion.

                                              3
                   SUPREME COURT OF NEW JERSEY
                         A-48 September Term 2019
                                    083726

                                Kim Goulding,

                             Petitioner-Appellant,

                                      v.

                          NJ Friendship House, Inc.,

                           Respondent-Respondent.

                    On certification to the Superior Court,
                              Appellate Division .

                   Argued                        Decided
               October 13, 2020              February 8, 2021

            Richard A. Grodeck argued the cause on behalf of
            appellant (Piro, Zinna, Cifelli, Paris & Genitempo,
            attorneys; Richard A. Grodeck, on the brief).

            James E. Santomauro argued the cause on behalf of
            respondent (Biancamano & DiStefano, attorneys; James
            E. Santomauro, on the brief).

      JUSTICE FERNANDEZ-VINA delivered the opinion of the Court.

      Under New Jersey’s Worker’s Compensation Act, an employee injured

during a social or recreational activity generally cannot receive compensation

for those injuries. See N.J.S.A. 34:15-7. However, the Act provides an

                                       1
exception to that general rule and expressly permits compensation “when such

recreational or social activities [(1)] are a regular incident of employment and

[(2)] produce a benefit to the employer beyond improvement in employee

health and morale.” Ibid. In this case, the Court considers whether the

injuries sustained by claimant Kim Goulding at an event hosted by her

employer are compensable.

      Goulding was an employee of North Jersey Friendship House, Inc.

(Friendship House), a non-profit organization that assists individuals with

developmental disabilities. She worked for Friendship House as a cook, and

she taught cooking classes to Friendship House’s clients. Goulding was

injured when she fell while volunteering as a cook at “Family Fun Day,” an

event Friendship House held for its clients.

      The workers’ compensation court here focused on Family Fun Day as a

whole, concluded it was a social or recreational activity, and found that

Goulding was not entitled to compensation under the two-part test of N.J.S.A.

34:15-7. The Appellate Division affirmed that decision.

      We disagree. Whether an activity is social or recreational should turn on

the employee’s role in the activity -- whether she is participating as a guest or

providing services for her employer at the event. If the employee is helping to

facilitate the activity in the manner that occurred here, the event cannot be

                                        2
deemed a social or recreational activity as to that employee, and any injuries

sustained by the employee while acting in that capacity should be

compensated. That result accords with the liberal construction due the Act as

“humane social legislation.” See Hersh v. County of Morris, 217 N.J. 236, 243

(2014) (quotation omitted).

      We also disagree with the determination that Goulding does not meet the

two-prong exception established in N.J.S.A. 34:15-7. Her role at the event,

which was planned to be held annually, was the same as her role as an

employee; but for her employment at Friendship House, she would not have

been asked to volunteer and would not have been injured. Viewed in that

light, Goulding’s injury was “a regular incident of employment.”

Additionally, Friendship House received a benefit from Family Fun Day

beyond an improvement to employee health and morale. The event was not a

closed, internal event for the Friendship House team. Rather, it was an

outreach event designed to celebrate and benefit Friendship House’s clients,

thereby creating goodwill for Friendship House in the community that could

expand its fundraising opportunities in the future. Goulding was therefore

eligible for compensation for her injuries under N.J.S.A. 34:15-7.

                                       3
      Because we conclude that Goulding’s injuries were compensable, we

reverse the judgment of the Appellate Division and remand the matter to the

worker’s compensation court for further proceedings.

                                       I.

                                       A.

      We begin by summarizing the pertinent facts and procedural history.

Friendship House is a non-profit organization whose mission is “to build the

skills of individuals with varying abilities and developmental needs by

providing, within a safe haven, comprehensive clinical treatment, vocational

training and work opportunities in order to achieve meaningful and productive

lives.”

      In November 2016, Goulding started working for Friendship House. In

September 2017, she was a chef/cook for Friendship House, working Monday

through Friday from 10:00 a.m. to 3:30 p.m. Goulding was paid hourly. Her

responsibilities included cooking and preparing meals for Friendship House’s

clients and teaching vocational classes to clients so that they could learn how

to cook certain dishes. During lunch hours, Goulding ran the grill and worked

closely with Friendship House’s clients, including individuals on the autism

spectrum.

                                       4
      On September 23, 2017, Friendship House hosted its first ever “Family

Fun Day,” which it planned to hold as an annual event moving forward. The

event was designed to provide a safe and fun environment with recreational

activities, including games and music, for the clients of Friendship House and

their families. Friendship House employees were asked to volunteer to work

the event, but there were no consequences for those who chose not to

volunteer. Goulding volunteered to work the event as a cook, her normal job

at Friendship House.

      On the day of the event, Goulding arrived between 8:30 a.m. and 9:00

a.m. and began setting up for breakfast. After breakfast, she began preparing

for lunch. Sometime between 11:30 a.m. and 12:30 p.m., Goulding stepped in

a small pothole in the parking lot and fell down, injuring her ankle. Several

people at the event assisted her after she fell, getting her ice and advising her

to remain seated with her foot elevated. Goulding continued to help the other

cooks prepare lunch while keeping her foot elevated. She left the event at

around 2:30 p.m. Goulding did not participate in any of the games or activities

at the event.

                                        B.

      Goulding filed a claim with the State of New Jersey, Department of

Labor and Workforce Development, Division of Workers’ Compensation

                                         5
against Friendship House asserting she suffered a work-related injury to her

right foot and ankle at Family Fun Day. Friendship House filed an answer

denying that Goulding was employed when she was injured.

      Goulding filed a Notice of Motion for Temporary and/or Medical

Benefits for surgery to repair the injuries to her ankle. She also sought

temporary disability benefits as of the date of her injury. In support of her

claim, Goulding provided a certification from counsel and medical records.

Friendship House filed a statement denying Goulding was entitled to any

medical treatment or temporary disability benefits because she was not

working for Friendship House when the injury occurred.

      The motion was heard in May 2018. The judge issued a decision on the

record, determining that Goulding’s accident did not occur in the course of her

employment. The workers’ compensation court determined Family Fun Day

was a social or recreational event. The compensation court then turned to the

two-part exception found in N.J.S.A. 34:15-7 to determine compensability for

an injury sustained during a “recreational or social activity.”

      The court held that Family Fun Day was not a regular incident of

Goulding’s employment as required by the first part of the N.J.S.A 34:15-7

test because this was the “first and only” Family Fun Day Friendship House

had sponsored, and the incident in question was not the cooking activity

                                        6
Goulding volunteered for, but her attendance at the event generally. The

compensation court added that Goulding volunteered to help at the event, was

not compelled to do so, and could have volunteered for a position other than

the one she held at her job. The compensation court also held that Family Fun

Day did not produce a benefit to Friendship House beyond an improvement to

employee health and morale as required by the second part of the statutory test

because there was no fundraising or marketing associated with the event.

Thus, the court dismissed Goulding’s claim with prejudice.

      The Appellate Division affirmed that decision. The appellate court first

agreed that the test set forth in N.J.S.A. 34:15-7 governed the inquiry because

Family Fun Day was a recreational or social activity: the event was designed

to celebrate the clients; it included food, games, and music; Goulding

volunteered to attend or help; and it was held on a Saturday, not a regular

workday.

      The Appellate Division then concluded that Goulding did not meet her

burden on the first prong of the statutory exception because Family Fun Day

was not a regular incident of her employment. The Appellate Division

reasoned: “[t]his was the first Family Fun Day;” it was held outside normal

working hours; employees were not required to volunteer or attend; if an

employee did volunteer, she could do so in any capacity; and Goulding could

                                       7
have chosen to help with games or prizes, she did not have to cook. Thus,

Family Fun Day could not be deemed “as customary as a lunch or coffee

break.”

      Because the Appellate Division concluded that Goulding did not satisfy

the first prong, it did not address the second prong of the N.J.S.A. 34:15-7 test

but did note there was a “lack of support in the record [to show] that there was

any benefit to [Friendship House] in the form of positive public relations.”

      We granted Goulding’s petition for certification. 241 N.J. 66 (2020).

                                       II.

                                       A.

      Goulding first argues that she was not engaged in a recreational or social

activity when she was injured because, although the event itself may have

involved games and social activities for the clients of Friendship House, she

took no part in those activities and was instead there to work.

      Alternatively, Goulding argues that if her involvement with Family Fun

Day was social or recreational, then she is entitled to compensation under the

two-part test of N.J.S.A. 34:15-7. Goulding contends Family Fun Day should

be deemed a “regular incident of employment” under the first part of that test

because it was created as an “annual” event. Turning to the second part of the

test, Goulding contends the workers’ compensation court and Appellate

                                        8
Division took too narrow a view of what constitutes a benefit in the context of

a non-profit organization like Friendship House, which is defined by its

mission, not by profit or loss. Goulding argues that Family Fun Day did

produce a benefit for Friendship House by furthering its mission of providing

services to clients and their families.

      Goulding adds that affirming the Appellate Division’s decision here

would create a disincentive for employees of non-profits to volunteer their

time to work at sponsored events.

                                          B.

      Friendship House argues that the workers’ compensation court and

Appellate Division properly focused on the social and recreational nature of

the event at which Goulding was injured instead of on the cooking Goulding

did for Family Fun Day. Friendship House further argues that reducing

Goulding’s job duties to cooking is misleading, because she also provides

vocational training for the clients and teaches them how to cook. Friendship

House submits that because Goulding was not engaged in either of those other

duties, she was not engaged in her normal job duties at Family Fun Day.

      Friendship House also contends the Act covers only employees who

perform services for an employer for financial consideration; it does not cover

injuries sustained while volunteering. Friendship House acknowledges there

                                          9
are exceptions for specific classes of public officials, such as volunteer

firefighters, but Goulding does not fit within those exceptions. Friendship

House adds that because the events occurred on a Saturday -- outside of her

regular work hours -- and because she chose to volunteer, Goulding was not

working for Friendship House when she was injured and is therefore not

entitled to workers’ compensation benefits.

      Relying on our decisions in Lozano v. Frank DeLuca Construction, 178

N.J. 513 (2004), and Sarzillo v. Turner Construction Co., 101 N.J. 114 (1985),

Friendship House argues Goulding has not satisfied the two-part exception of

N.J.S.A. 34:15-7. On the first prong, Friendship House submits that for a

recreational or social activity to be a regular incident of employment, the

employee must show that participation was compelled by the employer, which

Goulding has admitted was not the case. Friendship House further argues that

Goulding fails to satisfy the second prong because Family Fun Day was not a

fundraising event, nor did it have marketing purposes; thus, there was no

benefit to Friendship House beyond an improvement to employee health and

morale.

                                        10
                                       III.

                                       A.

      Appellate courts approach the factual findings made by a workers’

compensation court with “substantial deference” in recognition of the

compensation judge’s expertise and opportunity to hear witnesses and assess

their credibility. Ramos v. M & F Fashions, Inc., 154 N.J. 583, 594 (1998).

Thus, review “is limited to ‘whether the findings made could reasonably have

been reached on sufficient credible evidence present in the record, considering

the proofs as a whole.’” Sager v. O.A. Peterson Constr. Co., 182 N.J. 156,

163-64 (2004) (quoting Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)).

      “An agency’s interpretation of a statute, however, although entitled to

some weight, is not binding on the reviewing court.” Brock v. PSE&G, 149

N.J. 378, 383 (1997). Rather, “courts remain the ‘final authorities’ on issues

of statutory construction and [need not] ‘stamp’ their approval of the

administrative interpretation.” Koch v. Dir., Div. of Tax’n, 157 N.J. 1, 8

(1999) (alteration in original).

      In applying provisions of the Act, this Court has long stressed that it “is

humane social legislation designed to place the cost of work-connected injury

upon the employer who may readily provide for it as an operating expense.”

Tocci v. Tessler & Weiss, Inc., 28 N.J. 582, 586 (1959). Indeed, New Jersey

                                       11
courts “liberally constru[e] the Act to implement the legislative policy of

affording coverage to as many workers as possible.” Brower v. ICT Grp., 164

N.J. 367, 373 (2000).

                                       B.

      N.J.S.A. 34:15-7, which contains the exception for “recreational or

social activities” at issue in this appeal, was added to the Act in 1979. L.

1979, c. 283, § 1. As enacted in 1911, the Act did not mention “recreational or

social activities,” but rather “simply provided that compensation would be

awarded for injuries or death from accidents ‘arising out of and in the course

of employment.’” Lozano, 178 N.J. at 523 (quoting L. 1911, c. 95, § 7).

      Courts were left to determine whether accidents arose “out of and in the

course of employment” and were thus compensable. See ibid. To make that

determination, they adopted a series of factors:

            (a) the customary nature of the activity; (b) the
            employer’s encouragement or subsidization of the
            activity; (c) the extent to which the employer managed
            or directed the recreational enterprise; (d) the presence
            of substantial influence or actual compulsion exerted
            upon the employee to attend and participate; and (e) the
            fact that the employer expects or receives a benefit from
            the employee’s participation in the activity.

            [Ibid. (quoting Harrison v. Stanton, 26 N.J. Super. 194,
            199 (App. Div. 1953), aff’d o.b., 14 N.J. 172 (1954)).]

                                       12
Those factors were assessed “based on the totality of the circumstances” --

“[t]he absence or presence of a particular factor was not dispositive.” Ibid.

      In early cases in which courts considered whether non-work activity

could be deemed to “aris[e] out of and in the course of employment,”

compensation was denied “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.” Ibid.; see,

e.g., Stevens v. Essex Fells Country Club, 136 N.J.L. 656, 658-59 (Sup. Ct.

1948) (denying compensation to a caddy for an injury suffered during a weekly

golf tournament sponsored by the employer exclusively for employees).

However, beginning with Tocci in 1959, the Act’s application was expanded in

light of its “prescribed liberal construction.” 28 N.J. at 593.

      In Tocci, this Court addressed whether injuries sustained during a

lunchtime softball game were compensable. 28 N.J. at 589-90. The

employees’ game took place on a field on company property, and the employer

supplied bats and balls. Id. at 584-85. In finding the claimant employee’s

injuries compensable, this Court reasoned that the employer “approved and

encouraged [the game’s] continuance” and was “fully aware” of the game’s

benefits to itself, which included improved employee morale; having the

“employees close by so that they could readily resume their work on time;”

                                        13
and having the ability “to exercise such supervision as it might consider

appropriate.” Id. at 593. The Court also observed that the softball game

“quickly became a customary” activity and “was thereafter as incidental to the

employment” as lunch, coffee, or cigarette breaks during the workday. Ibid.

We concluded that those facts revealed a sufficient relationship between the

game and the employment that the claimant’s injury could “fairly and justly be

grouped with those occurrences which may be said to have had some work

connection.” Id. at 593-94.

      In Complitano v. Steel & Alloy Tank Co., 34 N.J. 300 (1961), we found

compensable an injury sustained in an after-hours softball game held away

from the employer’s premises based on the employer’s ties and the event.

There, the claimant employee was injured playing on a team that represented

his employer. Complitano v. Steel & Alloy Tank Co., 63 N.J. Super. 444, 445-

46 (App. Div. 1960). The team was formed by the employees, and the

employer did not exercise control over the team or coerce or influence the

employees to play. Id. at 446-47. However, the employer paid the league

entrance fee and helped cover the cost of bats, balls, and uniforms, which bore

the company name. Id. at 446. Further, the local newspaper occasionally

published the league standings, and when the team won the league title all

                                       14
three years they played; the company received a large trophy that was

“displayed in the entrance hall of the company office.” Ibid.

      Based on those facts, we reversed the Appellate Division’s denial of

compensation relying on the dissent, Complitano, 34 N.J. 300. The dissent

concluded the claimant employee should be compensated for his injuries

because “the activity came within the scope of employment” under the Act ,

Complitano, 63 N.J. Super. at 469 (Conford, J.A.D., dissenting). The

dissenting judge determined the employer’s sponsorship of the team was not

motivated by “altruism alone,” but instead was “substantially motivated” by

the “intangible benefit[s]” the company received such as “promotion of the

company’s good name before the general public” and “its heightened prestige

and civic status” in the community. Id. at 467, 469.

      In 1979, the Legislature made several amendments to the Act, with the

“dominant purpose” of “‘mak[ing] available additional dollars for benefits to

seriously disabled workers while eliminating, clarifying or tightening awards

of compensation based upon minor permanent partial disabilities not related to

the employment,’ as well as . . . contain[ing] the overall cost of workers’

compensation.” Sarzillo, 101 N.J. at 119 (quoting S. Labor, Indus., and Pros.

Comm., Joint Statement to S. Comm. Sub. for S. 802/Assemb. Comm. Sub. for

A. 840 (Nov. 13, 1979)). N.J.S.A. 34:15-7 was added to the Act as part of

                                       15
those amendments, and that statute and the carve-outs from coverage it

contains -- including the carve-out for injuries sustained in the course of

recreational and social activities at the center of this appeal -- have been

interpreted as a legislative attempt to reverse the judicial trend toward

expansive interpretation that began in Tocci and Complitano. See Lozano, 178

N.J. at 529-30.

      In addition to other defenses against compensation claims, N.J.S.A.

34:15-7 provides, as relevant here, that

            [w]hen employer and employee shall by agreement,
            either express or implied . . . accept the provisions of
            this article compensation for personal injuries to . . .
            such employee by accident arising out of and in the
            course of employment shall be made by the employer
            without regard to the negligence of the employer . . . in
            all cases except . . . when recreational or social
            activities, unless such recreational or social activities
            are a regular incident of employment and produce a
            benefit to the employer beyond improvement in
            employee health and morale, are the natural and
            proximate cause of the injury.

      Under the plain language of that provision, an injury “arising out of and

in the course of employment” is not compensable if it is sustained during

“recreational or social activities.” N.J.S.A. 34:15-7. Accordingly, when a

claim is pressed and an employer defends against the claim by asserting that

the employee was injured during a “recreational or social activit[y,]” a court

must first consider whether the activity was, in fact, “recreational or social”
                                        16
within the meaning of the statute. If the activity was not recreational or social

in nature, then the employer may not invoke that exception to compensation.

      If, on the other hand, the activity during which the injury is sustained

was recreational or social in nature, N.J.S.A. 34:15-7 provides that the injury

will only be covered if “such recreational or social activities are a regular

incident of employment and produce a benefit to the employer beyond

improvement in employee health and morale.” Put differently, “an employee

injured during a recreational or social activity must satisfy a two-prong test to

qualify for compensation under the [A]ct -- the activity (1) must be a ‘regular

incident of employment,’ and (2) must ‘produce a benefit to the employer

beyond improvement in employee health and morale.’” Lozano, 178 N.J. at

521 (quoting N.J.S.A. 34:15-7).

                                       IV.

                                        A.

      To decide whether Kim Goulding’s injuries are compensable, we begin

with the threshold determination of whether Family Fun Day constitutes a

recreational or social activity within the meaning of N.J.S.A. 34:15-7.

                                        1.

      The Act does not define “social or recreational activity,” and this Court

has underscored the ambiguity of that label; we have noted, for example, that

                                        17
            [a]n employer-sponsored company picnic held off-
            premises and after work hours that employees
            voluntarily attend for their own personal pleasure
            certainly falls within the definition of “recreational or
            social activities.” But, there is a question whether
            employees would describe a company event as
            “recreational     or    social”     and    consider     it
            noncompensable if the employer required attendance.
            That is, from the perspective of an employee, the
            meaning of the phrase “recreational or social activities”
            is not self-evident. The act’s silence on the meaning of
            the disputed phrase requires our inquiry to extend
            beyond the plain language of N.J.S.A. 34:15-7.

            [Lozano, 178 N.J. at 522.]

      In Lozano, this Court was faced with whether an employee who was

injured while driving a go-cart was participating in a recreational or social

activity. Id. at 518-19. The employee worked for a mason contractor and did

not have a driver’s license. Id. at 518. The employee and his supervisor had

been working at a property with a go-cart track on the day of the injury. Id. at

519. After the supervisor drove around the track, he instructed the employee

to “get in” and drive. Ibid. The employee initially refused because he did not

know how to drive, but the supervisor assured him it was easy and told him to

“get in.” Ibid. The employee crashed and sustained injuries. Ibid.

      The compensation court dismissed the employee’s claim because his

injury occurred when he was “off the clock” and “engaged in a ‘recreational

activity’ . . . outside the scope of his employment,” and he had fun. Id. at 520.

                                         18
We disagreed with the dismissal, holding 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.” Id. at 518. “[W]e construe[d] the phrase ‘recreational or

social activities’ as it appears in N.J.S.A. 34:15-7 to encompass only those

activities in which participation is not compulsory.” Id. at 531.

      Significantly, however, we did not find the converse to be true. We did

not find that non-compulsory activities are always “recreational or social

activities.” Determination of whether a non-compulsory activity is a

recreational or social activity within the meaning of the statute thus remains a

fact-intensive and case-specific inquiry. Compare, e.g., Quinones v. P.C.

Richard & Son, 310 N.J. Super. 63, 65-69 (App. Div. 1998) (arm-wrestling

matches that were not approved by the employer, but that took place regularly

at work and during work hours, were social or recreational activities for

purposes of N.J.S.A. 34:15-7), with Valdez v. Tri-State Furniture, 374 N.J.

Super. 223, 239-40 (App. Div. 2005) (the claimant employee’s “driving [of a]

forklift[] in an unorthodox manner” at his worksite did not constitute a “pur ely

social or recreational activity, entirely unrelated to work” because the

“curiosity” that led the employee to use machinery that he was not licensed or

                                       19
required to use as part of his job “was the direct result of his observation that

the equipment was used in the course of his business”).

      Here, we consider whether, under the facts of this case, the specific non-

compulsory activity in which Goulding participated is a recreational or social

activity within the meaning of N.J.S.A. 34:15-7. In doing so, we are mindful

of “the legislative policy of affording coverage to as many workers as

possible.” Brower, 164 N.J. at 373.

                                        2.

      We disagree with the Appellate Division’s view that Goulding’s

volunteering at Family Fun Day was a social or recreational activity because

she was not compelled to volunteer and because the event celebrated clients,

had food, music, and games, and was held outside of working hours. That

view implies that whenever an employee volunteers at an employer-sponsored

event, she cannot be compensated if injured simply because the event has a

social or recreational purpose. Such a view ignores that the Act is supposed to

be construed liberally in favor of compensation, and it fails to consider the

employee’s role in the activity. See Lozano, 178 N.J. at 522 (“[F]rom the

perspective of an employee, the meaning of the phrase ‘recreational or social

activities’ is not self-evident.” (emphasis added)).

                                        20
      It is undisputed that Goulding, unlike the employee in Lozano, was not

compelled to volunteer for Family Fun Day. However, compulsion is not the

only instance in which an activity can be removed from the social or

recreational activity label. The facts here are distinct from prior cases in

which we addressed social and recreational activities. Goulding was not

playing softball on her lunch break; she was volunteering to cook (her regular

job) for an event her employer was hosting, and which it planned to hold

annually.

      If an employer-sponsored event is designed with the purpose of

benefitting the employer’s clients, members, or customers, and an employee

volunteers to help facilitate the event, the event cannot be deemed a social or

recreational activity as to that employee. Moreover, although Family Fun Day

as a whole may have been a social or recreational event, Goulding did not

participate in that event in a social or recreational role because she was there

to help facilitate it. The statute applies to “recreational or social activities” --

not “recreational or social events.” See N.J.S.A. 34:15-7. Had the Legislature

intended to limit compensation based on the broad category of event involved,

rather than on the employee’s role within that event, it could have done so . It

is the nature of Goulding’s activities at the event that determine

                                         21
compensability, just as employee compulsion -- not the character of the event

-- was held to determine compensability in Lozano, 178 N.J. at 531.

        In contrast to prior cases where the employees were participating in the

social or recreational activity -- playing softball, golfing, or attending a picnic

-- Goulding was facilitating Family Fun Day by cooking and preparing meals

for clients of Friendship House, just as she does in her regular employment.

Accordingly, Family Fun Day, as to Goulding, was not a social or recreational

activity. And, because Friendship House has advanced no other applicable

exception under the Act, Goulding’s injuries are compensable.

                                         B.

        Although our analysis could end there, we add that Goulding would also

be entitled to compensation under N.J.S.A. 34:15-7 if her volunteer work at

Family Fun Day could be deemed a recreational or social activity. N.J.S.A.

34:15-7 contains an exception to the general rule of no recovery for injuries

sustained during a recreational or social activity that is (1) a “regular incident

of employment,” and that (2) “produce[s] a benefit to the employer beyond

improvement in employee health and morale.” Both prongs of that test are met

here.

                                        22
                                        1.

      The first prong of the exception requires a court to determine if the

activity is a regular incident of employment.

      Friendship House relies on Sarzillo in arguing that Family Fun Day was

not a regular incident of Goulding’s employment. In that case, the claimant

was a journeyman-carpenter who was injured while playing “Ka-nocka,” a

paddle game similar to tennis, during lunch with other employees. 101 N.J. at

115-16. The employer was aware the employees played the game and had

never attempted to object or stop it. Id. at 116.

      As to the claimant employee, we determined playing “Ka-nocka” was

not a “regular incident of employment” -- even under a liberal construction of

the Act -- because he chose to play the game of his own accord, when he could

have spent his lunch break doing whatever he liked. Id. at 121. Additionally,

the employer did not “contribute to, participate in, or encourage the activity,

much less compel employees to engage in it”; it was not a “recognized

customary lunchtime recreational activity”; and it was essentially just an

activity periodically engaged in by employees. Ibid. There was no evidence

of sponsorship, and there was no “work-connection, incidence and

conditioning, let alone compulsion” to make this a regular incident of

employment. Id. at 121-22.

                                        23
      The vast disparities between the Ka-nocka game in Sarzillo and Family

Fun Day here highlight precisely why Goulding’s volunteer work at that event

was a regular incident of her employment even though the event was non-

compulsory and was held outside of her standard working hours.

      First, regardless of the voluntariness of her participation and that she

was not being paid, Goulding would not have attended the event and would not

have been injured but for Friendship House’s request for volunteers at the

event. Moreover, the event took place on the Friendship House property and

was organized and sponsored by Friendship House and advertised by

Friendship House to its clients. Friendship House’s active involvement in and

complete control over Family Fun Day is the polar opposite of the employer’s

laissez-faire approach to the employee-initiated Ka-nocka game in Sarzillo.

      Further, unlike the spontaneous and sporadic Ka-nocka games in that

case, Family Fun Day was designed to be a recurring “annual” event. Indeed,

Family Fun Day can be considered “customary” just like a lunch, coffee, or

cigarette break and was sufficiently related to the employment. See Tocci, 28

N.J. at 593 (finding that a daily softball game played between employees

“quickly became customary” and “was thereafter incidental to employment”).

This is particularly true for Goulding, who volunteered to cook at the event in

keeping with her regular employment position at Friendship House.

                                       24
      It is significant that Friendship House needed volunteers for Family Fun

Day. Given the Act’s liberal construction in favor of compensation, it is

difficult to imagine that the Legislature intended to preclude compensation for

injuries sustained by an employee who was volunteering at the employer’s

behest to assist in facilitating an employer-sponsored event designed to

celebrate the employer’s clients.

      Against this specific factual backdrop, we conclude that Goulding has

satisfied the first prong of the exception set forth in N.J.S.A. 34:15-7.

                                        2.

      The second prong of the test set forth in N.J.S.A. 34:15-7 requires a

court to determine whether the social or recreational activity “produce[d] a

benefit to the employer beyond improvement in employee health and morale.”

Sarzillo, 101 N.J. at 115 (quoting N.J.S.A. 34:15-7).

      As with the first prong, we find guidance in Sarzillo about what

circumstances fail to satisfy the second part of the test -- guidance that quickly

reveals Goulding has satisfied the exception. Notably, we concluded in

Sarzillo that there was no “benefit to the employer beyond improvement in

employee health and morale” because there was “no advertising, no uniforms

with company logo, no publicity through newspaper listings of league

standings, no admission to the general public -- in short, there was no benefit

                                        25
to the company from improved public relations and consumer good will.” Id.

at 122 (distinguishing Complitano, where the employer derived a benefit both

to morale and through advertising).

      As to the benefits derived from Family Fun Day, we first note there is

little evidence to suggest Family Fun Day improved employee health and

morale, especially considering there is nothing in the record suggesting

employees and their families were invited to attend as guests. Any benefit the

event had to employee health and morale was incidental to the event, not the

driving force behind it. We would be hard-pressed to conclude that an event

designed for the employer’s clients, and not for its employees, has the primary

and sole purpose of improving employee health and morale.

      Moreover, even though Family Fun Day was not a fundraiser, Friendship

House still received a benefit. The event had the stated purpose of celebrating

clients or members, their families, and the community. An obvious side effect

of that is there will be those who rightfully think that Friendship House is

doing good work and will be more inclined to help out in whatever way they

can as a result of that favorable impression. Thus, just as the employer in

Complitano, Friendship House received the “intangible benefits” of promoting

itself and fostering goodwill in the community. Last, the experience enjoyed

at Family Fun Day by the clients and their families -- the very people

                                       26
Friendship House has made it its mission to serve -- is a separate benefit in and

of itself. We therefore conclude this second prong has been satisfied.

                                        C.

      In sum, we hold that the injury sustained by Kim Goulding while

volunteering at her employer-sponsored event is compensable because, as to

Goulding, the event was not a social or recreational activity. We further hold

that, even if her volunteering for Family Fun Day were social or recreational as

those terms are used in N.J.S.A. 34:15-7, she would still have satisfied the

two-part exception set forth in that statute because her participation was a

regular incident to her employment and it produced a benefit to Friendship

House beyond improvement to employee health and morale. Her injury would

thus have been eligible for compensation even if the statutory carve-out for

social or recreational activity was applicable here.

                                        V.

      We reverse the judgment of the Appellate Division and remand this

matter to the compensation court for further proceedings.

    CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,
PATTERSON, SOLOMON, and PIERRE-LOUIS join in JUSTICE
FERNANDEZ-VINA’s opinion.

                                       27