How to Avoid Liability at the Company Holiday Party

It’s that time of year again!  Season’s Greetings and Happy New Year!

Your staff has put in another year of blood, sweat and tears and everybody is excited about the long-awaited holiday office party. Finally, you can relax with your co-workers and celebrate the season of giving together.  The party was a big success according to all your staff, but in the first month of 2020, you get hit with a lawsuit from one of your employees. Don’t be that employer!

Regrettably and with hindsight, a bit of planning and vigilance could have helped avoid this lawsuit altogether. Below are a few quick reminders to protect your company from exposure this holiday season:

Voluntary Attendance:  Employers should make attendance at the holiday party voluntary. Also, never suggest that attendance will benefit an employee’s standing with the company.

Limit Alcohol Consumption: When some employees see “open bar”, three words come to mind, “Lets. Do. Shots!” An easy way to help employees from making regrettable alcohol-induced decisions that can later result in a lawsuit, is to distribute “Drink Tickets” to each person that are then redeemed with the bartender. Another way to monitor alcohol consumption and reduce binge drinking in a fun and less formal fashion would be to serve wine with the meal.

Major legal liability is created by drunk driving following an employer-sponsored holiday party. In a 2013 case, Purton v. Marriott International, Inc., that received substantial publicity, a California appellate court reversed the trial court’s grant of summary judgment for the employer. The appellate court found that an employee who consumed alcohol at a company-sponsored event and, after leaving, struck another car and killed the driver created liability for the employer.

“It is irrelevant that foreseeable effects of the employee’s negligent conduct (here, the car accident) occurred at a time the employee was no longer acting within the scope of his or her employment,” the court ruled. If there is drinking at the party, it is always a good rule of thumb to be an advocate for securing designated drivers, or providing rides through Uber, Lyft, or a taxi.

Providing ride-sharing options and even offering to cover the cost could save your company money in the long run. No one wants to be “the babysitter” at a party, but asking staff to be mindful of each other, especially when someone may be too impaired to drive, could make a difference.

Sexual Harassment: Having a holiday party is a wonderful way to reward your employees, but it can be risky. Seemingly innocent remarks could come back to haunt the person who made the comment, and also you, as the employer. Also, Crazy Bob, the company clown, should not be nailing up a handful of mistletoe over the party entrance!

Times have changed, and what may have been considered acceptable in the early 2000’s, may be questionable under today’s new cultural standards and often confusing legal landscape. In 2017, a total of 3,698 sexual harassment cases were filed with the California Department of Fair Employment and Housing and even more in 2018.

It is important for employers to adhere to sexual harassment training requirements to reduce your liability exposure for acts that can be prevented. All it takes is one reasonable person to be offended and you are at risk for sexual harassment. Unwanted comments/advances at a holiday party carry exactly the same weight as a regular work day in the office.

A week or so before the party, it would be a good idea to review the company’s sexual harassment policy with your employees and issue a memo to remind employees to act responsibly at the party, expressing a lack of tolerance for any inappropriate behavior, including drunkenness.  If a problem does occur, your emphasis of the company’s policy could help defend a possible suit.

Gift Exchange: Employers should always be clear about company policies and guidelines as to what is not an appropriate workplace gift. Wacky Wendy should be well aware that her naughty gift idea will make others uncomfortable during the White Elephant exchange, and therefore, should not be brought into the work environment. A sexual gag might be met with laughter and fun, but your company may get hit with an unwanted lawsuit. Not a good way to start the New Year!

Such steps are not a guarantee against a costly legal hangover, particularly if the decision is made to serve alcohol. But they can be an employer’s foundation for an effective defense against liability if problems should come to pass.

If you have any questions regarding the above, please contact our office.

Happy Holidays from LBLG!

Author:  Alysha Zapata, Esq.