Employers often encourage employee health and fitness by supporting the athletic activities of their employees. They can achieve this by donating equipment, reimbursing fees, and in a number of other ways including sponsoring sports teams. Before getting involved in athletic activities of employees, however, employers should be aware of issues that could arise out of injuries that occur during employer-sponsored activities, including liability for injuries.

    In recent years, many employers have placed an increased focus on promoting employee wellness as a means of indirectly reducing healthcare costs. To this end, employers are encouraging employees to adopt healthier, more active, and less sedentary lifestyles—especially when the weather is conducive to outdoor activities.

    To this end, employers are encouraging employees to adopt healthier, more active, and less sedentary lifestyles. Exercise can be a major contributing factor to any individual’s efforts to improve overall health and wellness. Therefore, many employers contribute to or provide a variety of activities to promote exercise, such as fitness classes and/or discounted or subsidized memberships at exercise/health/fitness clubs or swimming pools. Many companies contribute to employee health club membership fees, and larger companies often have exercise or fitness rooms on-site at the workplace.

    Accordingly, some employers sponsor team sports, not only for the positive impact on fitness and wellness, participation in such activities can result in a stronger sense of teamwork among co-workers. stronger sense of teamwork among co-workers.

    Employer sponsorship. Employers may sponsor, lend their names to, and financially support softball, hardball, basketball, volleyball, bowling, or other sports teams. Having such teams join local leagues can enhance the company’s image in the community.

    Companies usually contribute to league activities if their name is attached to them in any way. Sports equipment is generally provided by the individual participant. Employers usually pick up the cost of the sports league affiliation; entry fees for 1-day events; the cost of special uniforms or shirts; and sometimes, at the end of the season, a trophy award dinner for participants. In many cases, the company just contributes a flat sum to an employee association for all such purposes.

    Accident and injury liability and insurance. One element employers should consider before sponsoring or offering intercompany, intracompany, or individual athletic activities is the matter of compensation in case of injury. A number of states exempt employer-sponsored sports from workers’ compensation—which means that in those states injured employees may sue employers for such employer-sponsored sports, but must prove negligence and employer responsibility in order to collect. Courts have held that employer liability for sports and recreation injuries under workers’ compensation depends on factors such as the degree of involvement the employer has with the activity, including organizing it, outfitting it, and deriving benefits from the employees’ participation; also considered is whether games and practices are played on company property or during work time.

    Some workers’ compensation policies cover company-sponsored activity by adding a special rider for this purpose to the regular policy. Employers that sponsor activities or wish to do so should investigate this option.

    Employers may also buy separate insurance policies covering sports and recreational activities. A formal athletic or recreational association within a company may buy such a policy in its own name.

    Discrimination and harassment issues.If an event is found to be within the course and scope of employment, employer liability becomes a real issue, as do potential discrimination concerns. For example, if an employee acts in a sexually inappropriate manner at a social event, even if the conduct takes place off company property?at a ballpark, for instance?the employer may be held liable.

    Additionally, to some extent, the employer’s vulnerability can increase in certain situations. Specifically, it may be liable for conduct of nonemployees who interact with its employees at an employer-sanctioned event held in a public place.

    Accordingly, management must be mindful and diligent in detecting and appropriately responding to inappropriate behavior by both employees and nonemployees at work-related functions.

    Some activities can be evidence of discrimination. For example, a “males only” golf outing could be perceived as creating advancement barriers to women, particularly in a male-dominated workforce. Therefore, employers should try to select “gender-neutral” activities that do not raise those types of issues.