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.

Numero uno on our list: Sexual harassment at the office holiday party. Who doesn’t have at least one inappropriate office holiday party story? If you don’t, you’ve at least heard a couple doozies. The mix of sparkly outfits, tasty snacks, free-flowing libations and people who typically spend their working hours together and you have a recipe for jaw-dropping, not to mention, litigious situations. For example, there’s the uncomfortable flirtation, the inappropriate comment about someone’s appearance or outfit, the misconstrued invitation, and the just-asking-for-problems mistletoe decoration, which should never be featured at a holiday party. And lest we forget, there is a whole host of problems that ensue when the office Santa keeps asking female employees to sit on his lap.

Holiday-related sexual-harassment lawsuits are not new and not unusual. Under federal and state law, employers have a legal obligation to prevent harassment in the workplace. This duty extends to work-sponsored events, like holiday parties (even those that occur outside of normal working hours), and even extends to the appropriateness of gifts for a holiday gift exchange. When it does not abide by this duty, an employer can be vicariously liable for employee behavior that is considered sexual harassment committed in the course of employment. There is a bright side: generally, employers will not be vicariously liable for the actions of its employees if it can demonstrate it took reasonable steps to prevent the sexual harassment or that the employee did not use the employer’s complaint procedures to alert the employer of the problem. Some cases on this subject have addressed comments with suggestive innuendos and some have been more overt. Take Grigaliunas v. Rockwell Intern. Corp. (defended by our own Charlie Warner), where the plaintiff alleged a co-worker kissed her at a holiday party for example. While that employer was lucky enough to get the case thrown out early by showing it took reasonable steps to correct the problem when notified, some employers aren’t so lucky. In any event, it can cost an employer a lot of money to get the case tossed out.

No matter how well planned or well-intended, office parties tend to encourage employees to behave in odd ways. This is despite an employer’s best efforts to train their employees. Thus, employers are advised to remind their employees not only of the company’s anti-harassment policy, but that it applies to employer-sponsored parties and events. Here are some other tips to help keep your office Santa off the real one’s “Naughty List:”

  • Review, Update, Remind: Review your employment handbook and, if necessary, update it so it expressly notes that employees are subject to the employer’s anti-harassment policy at company-sponsored events. Once reviewed and updated, remind employees of the company’s anti-harassment and reporting policies. Let them know that the policies apply to social and non-social events inside and outside the office equally and that they will be subject to discipline if they are involved in harassment during the holiday party. Don’t forget to make sure your employees know this applies to their social media activities too … just in case one of them decides to make a co-worker’s dance with the lampshade the new YouTube sensation.
  • Take a Top Down Approach: Start at the top and remind supervisors of the company’s anti-harassment policies and what to do if they learn of or witness potential harassment.
  • Caution Gifting: If there is going to be a holiday gift exchange, employers should inform employees that gifts should be workplace appropriate. If necessary, employers should expressly state that employees are not to bring gifts/cards that contain derogatory images, language, innuendos or otherwise humorous gifts to which someone might take offense.
  • The More the Merrier: Consider inviting your employees’ spouses/partners/families. Their presence may change the dynamic in a good way, and keep the inappropriate conduct at bay.
  • Dress for Success: Consider implementing a dress code that maintains a professional environment, e.g., instead of “holiday attire,” which could mean sparkly tube tops to some, keep it “business casual.”
  • Act Fast: Should all else fail and you find yourself dealing with a sexual harassment issue, act promptly! All acts of sexual harassment, even those that occur at a holiday party, should be taken seriously and dealt with properly. This includes a proper investigation and implementation of disciplinary procedures as necessary.