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Now that the kids have finished their post-Halloween sugar rush and big-box retail stores have put up Christmas displays, one thing looms on the horizon: company holiday parties. As the year comes to a close, companies will be thinking about how to celebrate their employees for their contributions to another successful year, and many will go the route of the holiday party. Company holiday parties can be a wonderful time for all, but can also present potential liability for unaware employers.
Employer liability stemming from a holiday party usually arises from one of two things: overconsumption of alcohol leading to injury, or sexual harassment. An employee who has too much to drink at a company-sponsored holiday party and gets behind the wheel, causing a crash resulting in injury or death, can create liability for the employer. Just this year, the Oregon Supreme Court clarified that the state’s “social host immunity” law could not shield employers from negligent acts apart from the actual service of alcoholic beverages in Schutz v. La Costita III, Inc.
The plaintiff in that case worked as a receptionist, and was pressured by her supervisor and co-workers to join them for drinks. Plaintiff became intoxicated at the event, and sustained serious injuries when she attempted to drive home and got into a car accident. She sued her employer and supervisor for negligence in organizing and supervising the event, pressuring her to attend, failing to warn her that she would be expected to consume an excessive amount of the alcohol purchased by her employer, and permitting her supervisor to organize such events, among other theories. The Oregon Supreme Court held that social host immunity only applies to acts taken in a role as a social host, and defendants were not entitled to that statutory immunity for the types of negligent actions the plaintiff claimed. As such, employers need to be mindful of potential negligence actions that could stem from a company holiday party.
Similarly, an employer could be liable for sexual harassment claims, such as a supervisor who kisses a subordinate under the mistletoe or makes a pass at an employee. Because it is a company-sponsored event, workplace harassment regulations will similarly apply at the event, so it is crucial to have policies prohibiting harassment in place and train employees on what is expected of them not only in the workplace but also at company-sponsored events.
So what is an employer to do? The purpose of this article is not to say that employers should cancel all holiday parties, sources of merriment and celebrations of employees. Rather, employers should simply consider some elements to reduce potential liability.
- Consider whether alcohol will be served at the party at all. If alcohol is served, consider limiting the number of drinks employees may have, such as through the use of drink tickets.
- Hold the event offsite at a rented space (that is ADA compliant) where the venue can provide licensed servers. Licensed servers will be better able to monitor alcohol consumption and are trained to cut off visibly intoxicated persons. Avoid hosting the party at the company office where employees can simply help themselves to the alcohol.
- Check with the company’s insurance broker or insurance carrier to see if the party is covered by the company’s insurance policy. If it is not, consider securing special event insurance for the party to provide coverage in case something does happen.
- Encourage employees who have consumed alcohol to take alternative transportation. Provide taxi cab vouchers or reimbursement for ride-sharing to avoid DUIs or liability for car accidents.
- Stress that attendance is not mandatory, and do not imply that it is or otherwise reward attendance. For example, if employees are given some type of gift or memento for attending, ensure non-attending employees receive the same.
- Remind employees that the company’s harassment policy applies at the event, and recirculate the policy beforehand.
- Do not invite scandalous behavior, such as hanging mistletoe.
- Educate supervisors and management personnel on their roles in enforcing company policies at the party and the risks of failing to do so, including individual liability.
But also, employers should remember to focus on what makes their company great — their employees — and celebrate with them (just in a way that reduces potential liability).
Sean Ray is an attorney at Barran Liebman LLP where he advises and represents employers. Contact him at 503-276-2135 or sray@barran.com
