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Employers Beware: Holiday Parties Can Be a Source of Liability

Employers Beware: Holiday Parties Can Be a Source of Liability

At this time of year, many employers sponsor and host holiday parties to both cultivate employee engagement and spread holiday good cheer. Such parties can be help motivate employees and serve as a thank you for a job well done all year. But if an employer is not careful, holiday parties can also create legal liability. Awareness of the issues and careful planning are the best precautionary measures a smart employer can take to prevent such ill after-effects.

Holiday Office Party Planning
First, if an employer provides alcohol at its gathering, there is the possibility that it could end up liable for injuries or damages caused by an inebriated employee. Every state has different laws regarding the liability of a “social host” that provides alcohol to a guest who later is involved in an accident with a third party. In most cases, the specific facts of the situation will determine the outcome, but the important thing to understand is that even if an employer is not legally liable for the actions of a drunk employee, it still may have to spend thousands of dollars proving that.

Instead, a better policy would be to either refrain from serving alcohol at the party at all or, if that’s not feasible, to take other steps to limit alcohol consumption, such as by providing a limited number of drink “tickets” to each employee, closing the bar well before the party ends, asking bartenders to keep eyes open for obviously drunk employees, or offering incentives to employees who volunteer to be “designated drivers.” In any case, employers are urged to consult with an attorney to determine the law in their particular jurisdiction.

Keeping Employee Behavior in Check
Holiday parties, particularly ones where alcohol is served, can also provide a setting for lewd behavior, sexual advances, and other conduct that is potentially actionable as sexual harassment under Title VII. To help protect against such claims, employers should re-distribute the company’s sexual harassment policy before the holiday party takes place, and emphasize that all guidelines will apply at the party, even if it occurs off-site and after work hours. Remind supervisors to set a professional example; utilize their management skills to keep an eye on employee behavior and not invite co-workers to any informal gathering after the employer’s party. And, as should be obvious, do not hang any mistletoe!

A little bit of common sense before the holiday party can help employers avoid big headaches afterwards. So be smart when planning the holiday party and everyone can have a good time.

Paul Freehling, Esq., Labor and Employment attorney, Seyfarth Shaw LLP, with assistance from Melanie H. Berkowitz, Esq., Seyfarth Shaw LLP.