Limiting the Liability for Companies Throwing Holiday Parties

By James M. Hillas
Austin Business Journal

The holiday season is just around the corner, and with it comes the season of employer-sponsored holiday parties.

Holiday parties are an excellent way to bring together employees and their families in celebration. However, employers must be cautious that company celebrations do not result in unanticipated legal liability.

Social host liability is a serious issue for employers who choose to throw holiday parties. Liability can arise for the host when an intoxicated guest causes injury -- whether at the function or after leaving.

An employer's social host liability is greatest for drunk-driving accidents when the employer has provided alcoholic beverages to a visibly intoxicated individual who causes injury. In drunk-driving cases, liability under the law is strict, meaning that there are very few defenses once it is established that a guest was served while visibly intoxicated.

Liability for an employer also may arise when an employee who has had too much "holiday cheer" later becomes violent or sexually harasses a co-worker.

Finally, employers also may become liable if an employee or guest under the age of 21 consumes alcohol at a company holiday party.

Employers thus should take steps to ensure that employees have fun at the party and, more importantly, take steps to ensure that employees don't drive under the influence of alcohol or engage in other alcohol-induced conduct with adverse consequences.

Although the potential for liability exists, most employers can still throw a fun party while limiting their exposure by following several common-sense tips:

Maintain company policy. Remind employees ahead of time that normal work rules and standards apply to holiday parties. A memo or companywide email stating company policy and reminding employees to drink responsibly is a good practice.

Also consider scheduling holiday parties on a weeknight when employees may be less likely to overindulge. Make it clear the party is a voluntary event and that attendance is not mandatory.

Finally, review applicable liability insurance policies for alcohol-related exclusions and consult with your company's insurance agent or broker well in advance of the party if additional insurance is needed.

Control consumption. Take all reasonable steps to ensure that a visibly intoxicated individual is not served alcohol. Limiting consumption is a key component to limiting liability.

Have an ample supply of nonalcoholic drink options. Hiring professional servers who are trained to recognize and avoid serving intoxicated patrons, issuing a limited number of drink tickets, having a cash-only bar and closing the bar well before the end of the party also are wise options.
Finally, providing adequate food at your event may limit potential exposure, because food helps to slow the body's absorption of alcohol.

Hold the event off premises. In Washington, a state administrative rule requires employers to prohibit alcohol and narcotics in the workplace and to prohibit employees under the influence of alcohol or narcotics from being at the workplace.

Check ID. Texas law prohibits anyone, except for a parent or legal guardian in a private residence, from providing alcohol to a minor or a juvenile. A minor is a person under 21 and a juvenile is a person under 18.

Professional servers should be trained to check ID for any employee or guest who looks under 30 and should further verify that the ID has not expired or been altered. Likewise, the servers should not provide pitchers or multiple drinks without checking the ID of all persons who will be consuming the drinks.

Offer an alternative to driving. The most serious liability arises when an attendee leaving a party drives after having too much to drink. If alcohol will be served at your holiday party, be sure to make a clear announcement that a cab ride or an alternate form of designated driver is available upon request.

Stationing a high-level manager near the exit to say goodnight and remind attendees of this option (and insist when appropriate) is a good idea.

Enforce workplace behavior. Your employee manual should include clearly stated policies regarding alcohol consumption and sexual harassment. Although a holiday party is a time to celebrate, stress to your employees that the rules still apply. In general, an employer should not tolerate behavior at a party that would not be allowed in the workplace. If you do not have an employee manual, there is no time like the present to put one in place.

Take action. By taking a few practical steps, your company can throw a great holiday party without unwittingly incurring liability.

From: Austin Business Journal (www.bizjournals.com)