So the question on everyone's mind when it comes to holiday parties: Will alcohol be served? For employers this is a big decision and, depending on where the holiday party is held and how it is contained, one that may come to expose an employer to liability. For the most part, whether an employer can be held responsible for alcohol-related incidents at or after company-sponsored events depends on the state in which the party is held and the circumstances.
First things first: If the event involves a business purpose that can be considered to have a direct effect on the commercial profitability of the business or if attendance is mandatory, the employer could find itself exposed to liability, so it is important to make attendance optional. Normally, however, merely attending an employer sponsored party will not expose the employer to liability for injuries that an intoxicated employee may cause once away from the premises.
In Ohio specifically, a social host, (i.e., the employer, in the case of an office holiday party) who provides alcohol on company premises is typically not liable to a third person subsequently injured by the intoxicated person. Ohio courts have refused to impose liability on a social host in a situation where a guest becomes intoxicated and injures a third party. Specifically, in Settlemeyer v. Wilmington Veteran's Post No. 49, 11 Ohio St.3d 127 (1984), the Ohio Supreme Court has held that a social host is not liable for injuries to a third-party that occur as a result of the negligence of an intoxicated social guest. Settlemeyer has been applied in the employer-holiday party context and been found controlling. See Gilkey v. Gibson, No. 98AP-1570, 2000 WL 4973 (10th App. Dis. Jan. 6, 2000); Knox v. Bell Optical Lab, Inc., No. 1145, 1989 WL 126857 (1st App. Dis. Oct. 24, 1989). In this context the courts typically have reasoned that the proximate cause of the injury is the consumption of the alcoholic beverage itself, not the act of furnishing the beverage. This is especially true when it concerns an adult guest; it’s a little different for minors, as set forth below. If the event is held at a restaurant or off-site, the vendors selling/providing the alcohol for profit may be liable for resulting injuries to third parties if they provide alcohol to noticeably intoxicated guests; however, the employer sponsoring the event generally has no liability.
When minors are involved, Ohio courts in some instances have found a furnisher of alcohol liable for injuries to a third person as a result of an intoxicated guest’s actions. These instances include cases where a person under 21 is provided beverages and when a liquor license holder knowingly violates the law relative to the sale of alcoholic beverages. In each such instance, the courts have determined that by enacting specific statutes that forbid the furnishing of alcohol to minors, the legislature meant business. Because these instances constitute statutory violations, Ohio courts have imposed liability on the social host and/or license holder in the event that the intoxicated minor causes injuries to a third party.
A minority of the states have adopted social host liability, in order for an employer to be found liable in one of these states, typically there must be an affirmative showing that the social host served alcohol to a person when the host knew or should have known that the person was intoxicated, and further knew that the intoxicated guest would be driving away from the event.
The problem for employers, even those in Ohio where there is no social host liability typically, is that there is no law that prohibits an intoxicated adult from suing a social host for injuries to that adult guest as a result of the intoxication. This means that if something happens to an employee or someone else due to the actions of an employer who became intoxicated at a company holiday party, the employer can still be named as a defendant in a lawsuit and spend money defending the suit.
If you decide to have alcohol at your company holiday party, here are some steps that might lessen the possibility of being held responsible for an employee's conduct after drinking too much:
- Don't Serve Minors: Make sure no minors are served. Check IDs, pass out wrist bands, and post signs that guests must be 21 in order to consume alcohol beverages. If fraternities can do it, so can you.
- Be Aware of Your State Law: Be familiar with your state’s laws regarding liability and alcohol at company-sponsored events.
- Make Attendance Optional: Make it clear to employees that attendance at a company-sponsored event is purely optional, not mandatory. This also means, keep the itinerary for the event social, not work related. Keep work-related events, like handing out of bonuses/awards or discussing yearly goals, for another day.
- Remind Employees of Policies: Remind employees of your policies regarding proper decorum. While you can encourage them to have fun, remind them that they are expected to act responsibly, which includes not drinking too much and then driving. With this, also remind salaried-exempt managers to keep an eye on employees even though technically it's not work time.
- Limit Consumption: Use a cash bar or drink ticket system to limit alcohol consumption.
- Take it Outside: Have the party at an off-site restaurant, party hall or hotel where the facility will serve the drinks. This will reduce the risk o employer liability. If the party is on-site, at a minimum hire a professional wait staff or bartenders so the alcohol is being served by non-company employees. Ask the bartenders/caterers to prepare low-alcohol mixed drinks or punches that look and taste as festive as their high-alcohol content counterparts. DO NOT have managers/supervisors/co-workers making and serving their colleagues/subordinates beverages.
- Be Careful with Your Choice of Beverages and Food. Provide a variety of non-alcoholic beverages and plenty of food. Stay away from sweet punches that contain alcohol, which make it difficult for employees to monitor how much alcohol they are consuming. Go easy on the greasy, salty or sweet foods, which tend to make people thirsty, and serve starchy and protein-heavy foods that slow the absorption of alcohol into the bloodstream. If possible, serve appetizers that are easy to eat while standing and mingling. Employees who have to choose between holding a drink and holding a plate of food may choose the drink only.
- Close the Bar Early: Close the bar well before the end of the event, no less than a half hour, but keep serving food.
- The More the Merrier: Consider opening the party to spouses/partners/significant others, which tends to reduce alcohol intake in addition to providing a possible designated driver.
- Plan Ahead: Discuss transportation ahead of time with employees and encourage them to coordinate rides with designated drivers. Another option: Arrange for taxis, a shuttle, or other transportation at the company's expense. Let employees know that transportation options are available so they can plan ahead. Announce during the party that transportation is available, even for employees who did not make an advance request.
It is important not to require employee attendance at holiday parties and that pressure to attend is properly managed. Mandatory attendance at company-sponsored functions, like holiday parties, can result in workers' compensation claims if an attending employee is injured. It can also mean that the employee is entitled to be compensated for his or her time spent at the event pursuant to the Fair Labor Standards Act ("FLSA").
As much as everyone loves them, the holidays create increased risk of employer liability and can result in a long list of legal problems for an unprepared employer. As our holiday gift to you, we've put together our top five holiday headaches for employers, which will be provided to you in a week-long series starting today.
