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Workplace workouts can burn employers

Workplace workouts can burn employers

Employers seeking to improve worker morale and health with onsite workout and recreational facilities may also expose themselves to new liability.

Many companies have been earning accolades for providing employees with perks such as onsite fitness centers and recreational rooms as employers, burdened with rising health care costs and workplace stress, seek ways to get their employees moving and motivated. Indeed, a 2006 survey of U.S. and Canadian employers by the Brookfield, Wis.-based International Foundation of Employee Benefit Plans found that 36% of the more than 450 organizations polled found that 36% offer onsite fitness equipment.

Although such facilities so far haven't generated a significant number of suits or claims, attorneys and consultants say employers considering the approach need to take steps to limit their liability.

"Simply setting up a company exercise room implicates various issues," said Gerald Maatman Jr., a workforce attorney with Seyfarth Shaw L.L.P. in Chicago. Companies could be held liable in injury lawsuits and--depending on state laws--workers compensation claims if someone were hurt using such facilities, he said.

"These are pretty significant exposures. It's not something (a company) should just say one day, 'This sounds like a great idea,"' said Dale Renner, director of national casualty claims for Aon Risk Services in Philadelphia. "If they have (such facilities) in their building, then employees can (exercise) while they are at work. Being on the premises creates that exposure."

Beyond waivers

While employers with workout or recreational facilities often require users to sign waivers or hold-harmless agreements, that step alone is not enough, some experts say.

"Waivers aren't ironclad; waivers generally cannot waive away a person's specific negligence," said Mr. Renner. "What waivers do is maybe put the lid on whether the employee would sue or not," he said, describing such agreements as "more psychological than legal."

William Milani, an employment law attorney with Epstein Becker & Green P.C. in New York, said waivers won't hold up in court if the company was found to have stocked the facility with substandard, poorly maintained equipment or staffed it with untrained workers.

Employers need to pay special attention to their state's workers comp statutes in considering an onsite recreational center, experts say. While workers comp laws generally bar coverage for activities outside the scope of an individual's job, that line is becoming increasingly blurred, they note.

"Do you have your Blackberry right there? Do you have your cell there? Are you waiting for a client to call while you are working out?" said Mr. Maatman. Distinctions between work and nonwork activities are "not so squeaky clean as before," he said.

Mr. Renner said companies that offer employees extra perks--such as reduced health care premiums or cash incentives--to use the onsite facilities could be setting themselves up for workers comp claims.

"The more closely it is associated with your employment, the more likely it could be considered workers comp," said Mr. Renner.

For example, companies that require that a person be in good shape to do their job are more liable for workers comp if an employee is injured using a facility, he said. Public safety workers such as police officers and firefighters, he said, are obvious candidates for workers comp in these cases.

Erika Koty, a claims adjuster in the risk management office for Naperville, Ill., said the city maintains fitness and recreational centers for its firefighters and police officers. If such an employee were injured while exercising, that could fall under workers comp, she said.

"It's part of their job, because they have fitness standards," she said.

Other protections

There are several steps employers can take to reduce the risk of claims and litigation, experts say.

Employers need to make certain that employees have their doctor's permission before using an onsite facility, said Michael Tompkins, a Kansas City, Mo.-based senior claim consultant for Lockton Cos. Inc., which offers onsite workout facilities.

In addition, companies need to have professional fitness staff available to ensure equipment is being used correctly. Regular equipment maintenance and safety checks also are vital, Mr. Tompkins said.

"The whole issue is supervision and control, and you really have to have it in place. And if you can't afford to have it, then you are better off not" providing a facility, said Mr. Renner of Aon.

Companies also can reduce their risk greatly by allowing only workers--and not their families--access to facilities, he said. Employers can also hire an outside fitness company to run the facility, potentially transferring some liability, he said.

Finally, Mr. Tompkins said, employers need to ensure the facility is available to all employees, regardless of disability.

Attorney Mr. Milani said onsite fitness centers and like facilities could give rise to discrimination claims if employers aren't careful to make them accessible for disabled workers. "Employers have to be very careful with compelling people to visit an onsite facility if the facility leaves out the disabled," he said.