The business-related benefits test in workers’ compensation

The Iowa Court of Appeals in Gazette Communications, Inc. v. Powell, No. 0-633/10-0017 (Iowa Ct. App. 10/06/10) determined that a bowling outing arranged by the employer's employee activity committee was not compensable under the Iowa Workers' Compensation Act, Chapter 85. This case is like a good boxing match between two heavy weight fighters slugging it out round by round and no one every appears to have the fight in their control.

Deputy - ruled Powell had failed to prove that he sustained a new injury or an aggravation of a pre-existing condition on June 20, 2005, and denied benefits.

Commissioner's Appeal - On intra-agency appeal, the commissioner found the bowling event was not held on Gazette premises, "the attendance and participation at the bowling event was not mandatory, and the sole benefit to Gazette was employee morale and camaraderie amongst the employees and their supervisory staff."

Rehearing was sought - Denied by the commissioner.

District Court Appeal - The district court concluded the workers‟ compensation commissioner misapplied the business-related benefits test adopted by our supreme court in Briar Cliff College v. Campolo, 360 N.W.2d 91, 94 (Iowa 1984). Consequently, the district court reversed the finding that Powell's June 11, 2005 bowling injury arose out of and in the course of his employment. The court then concluded that remand was necessary for the commissioner to make findings as to whether the June 20, 2005 injury was an independently compensable injury.

Iowa Court of Appeals - The error lies in the commissioner's conclusion that this stated "sole benefit" is sufficient to bring recreation within the course of employment. See id. (noting that where error is one of interpretation of law, we determine whether the commissioner's interpretation is erroneous and substitute our judgment for that of the commissioner). We specifically agree with the district court that "[a]pplying the standard as the commissioner did ignores the exception for activities that merely build morale and camaraderie and would permit for „complete coverage of all the employer's refreshing social and recreational activities.‟" (Quoting Larson, § 22.05[3], at 22-35.) The district court did not err in reversing the commissioner on this issue. Remand to the commissioner is required to determine what, if any, benefits are due to claimant based solely on the asserted June 20, 2005 injury.

I've uploaded the decision to the law firm's website if you're interested to read it. And stay tuned because this one could be reviewed by the Iowa Supreme Court.