By Jeff Jones
Special to the UCBJ
‘Tis the season for company holiday parties. And while company holiday parties can create goodwill with employees, as well as fostering camaraderie and improving employee morale, unfortunately, particularly when alcohol is involved, company holiday parties can also create a festive environment that also fosters the risk of inappropriate behavior. And, this inappropriate behavior can be much more than merely embarrassing. It can also lead to lawsuits or claims/charges of harassment or employment law violations which can expose the employer who sponsored the party to liability. By following the suggestions below, you can greatly reduce the chances that a bad situation ruins your holiday party.
Alcohol consumption is one of the most common sources of employer liability at an employer-sponsored holiday party. Liability can be predicated on theories of negligence or respondeat superior, which extends liability for employee misconduct or negligence to the employer. Finally, most states have “dram shop” laws which hold the provider of alcoholic beverages liable for injuries caused by individuals to whom the provider negligently served alcohol. And in many states, that liability extends not just to sellers of alcohol but to social hosts who provide alcohol to guests.
The most obvious preventative measure for an employer would be to not serve alcohol at a holiday party. However, if the employer makes the decision to serve alcohol, or to make alcohol available to the guests, the following precautions should be considered. First, hold the event at a restaurant or other off-site location that has a liquor/beer permit and professional bartenders who are trained to deal with intoxicated guests. Or, consider hiring a professional bartender or caterer to handle the dispensing of alcohol. The employer should also limit the amount of alcohol to be served by allocating a limited number of drink tickets, having a cash bar where attendees pay for their own alcohol and/or limiting the time period during which alcohol is served. Also, definitely provide alternative beverages such as soft drinks, coffee and tea to attendees. Finally, strongly consider serving dinner or hors d’oeuvres during the party.
If alcohol is being served, consider providing alternate transportation and/or lodging, at company expense, for any guests. The employer should stress the importance of appropriate and responsible behavior in conjunction with any alcohol consumption and encourage the use of designated drivers. All of these options should be advertised to all guests before, during and after the party. The employer should also encourage all employees to be on the lookout for other employees and guests who appear to be intoxicated or acting inappropriately due to alcohol consumption. Finally, the employer may want to consider the use of “spotters” at the party who are not consuming alcohol and are on the lookout for potential alcohol-related problems. However, be sure not to use spotters who are possibly “nonexempt” wage-earners under the Fair Labor Standards Act to avoid any claims by those employees that they were required to work off the clock.
In the era of the #Metoo movement, many people are very sensitive to the issue of sexual harassment. Company holiday celebrations present an environment rife with opportunities for sexual harassment. To reduce the risk of sexual harassment claims arising from a holiday party or event, employers should ensure that their policies clearly outline that all company anti-harassment and conduct policies extend to employer-sponsored social events. The policy should clearly state that such holiday parties are still intended to be professional environments. An employer may wish to outline specific conduct that is not acceptable. Additionally, the employer should make sure to avoid any risqué, adult-themed venues, such as nightclubs or adult entertainment establishments, and should avoid sexually-themed games or activities (such as hanging mistletoe or exchanging “adult” gag gifts). Further, while it can increase the expense of the party, consider allowing guests of employees to attend. Employees tend to act in a more professional, reserved manner if their significant others or unfamiliar faces are in attendance. And finally, if any allegations surface of inappropriate conduct during the holiday party, the employer should treat it just like any other harassment claim and conduct a thorough and prompt investigation, which should result in appropriate discipline if the allegations are proven to be true.
The employer should also be aware that workers’ compensation liability can arise from a company holiday party. That is, an employee who is injured in connection with a holiday party may be able to pursue a workers’ compensation claim unless the following steps are taken to minimize the risk of such liability. First, keep the holiday party separate from employee job duties. That is, make it clear that the holiday party is voluntary and attendance is not a condition of employment. Also, avoid engaging in any business activities during the event such as speeches about business matters or giving out business or performance awards. One advantage of having an off-site party is that it strengthens the employer’s claim that the party is not a work-related activity under workers’ compensation laws. This has the added benefit of avoiding possible wage and hour law violations. Additionally, be sure that off-site vendors and establishments connected with the holiday party are independently licensed and insured.
To avoid any issues with possible discrimination claims, the employer should make sure that the event is nondenominational and is billed as a “holiday” party instead of a “Christmas” party. Also, the employer should avoid any displays of religious symbols so as to allow employees of all religious backgrounds to feel welcome. Also, if using an outside venue, be sure to ensure that the venue has a nondiscrimination policy, particularly if it is some sort of private club, and also make sure the venue is ADA accessible.
In addition, the ubiquitous use of social media by employees exacerbates the risks associated with conducting a company holiday party. Inappropriate and/or embarrassing behavior could quickly become public knowledge through a social media post. However, employees enjoy certain free-speech rights in connection social media usage, so the employer must tread carefully when trying to limit or constrain an employee’s use of social media. Initially, if your company has a well-drafted social media policy, consider extending it to the holiday party. Also, the employer can consider prohibiting employees from taking and posting photos or videos of their fellow employees and guests without their consent under the auspices of protecting employees’ privacy rights. The employer can also request employees remove any offensive or inappropriate social media content related to the holiday party (so long as it does not depict or relate to concerted activity regarding the terms or conditions of employment under the National Labor Relations Act). Finally, the employer should not publish any photographs or videos of the holiday party without the consent of the photographed employees.
And lastly, prior to the holiday party, the employer should make sure it has adequate insurance coverage for the event. The employer may wish to confirm that its employment practices liability insurance extends to the holiday party and further, the employer may want to ensure that its general liability policy covers the event and includes dram shop coverage. In fact, the employer may wish to explore the possibility of taking out a short-term custom insurance policy to cover just the holiday party.
Hopefully, if you follow these guidelines, you will have a festive and enjoyable holiday party that does not result in legal entanglements that extend well into the new year. Happy holidays!
Jeffrey G. Jones is a regional managing member for Wimberly Lawson Wright Daves & Jones PLLC. He can be reached at jjones@wimberlylawson.com.
