HR Management & Compliance

Ho Ho Ho…liday Lawsuit? 3 Tips To Protect Yourself

In a recent article for our premium service,
California Employer Advisor, we offered 11 tips for employers to
limit liability when hosting a company holiday party
. In this post, we
offer you 3 of those tips to keep your event sane and safe and liability-free.

Planning a Company Party: Ways to Limit Your Liability

The holiday season is upon us, and if you’re planning a company party or awards
banquet, you might want to give some thought to your policy on alcohol.

Serving employees alcohol at company-sponsored parties and events can have
serious and sometimes tragic consequences for your workers and your
organization. For example, if an employee drinks too much and gets into an accident
on the way home, you could be held liable. Plus, sexual harassment complaints
tend to increase when alcohol consumption goes up.

You’re Responsible

In the past decade, courts have continued to expand employers’ liability for
acts of their employees when alcohol is consumed. The basic rule is that
employers aren’t responsible if the event where alcohol was served was purely
social. But if business was involved, you could be held accountable.

Courts look at a variety of factors to determine when you might be responsible
for an employee who gets into an accident after drinking at a company function.
These factors include where the event was held, whether employees were required
to attend, whether spouses were invited, whether customers or clients were
invited, whether speeches were given or company business was discussed, and
whether the event was organized and sponsored by the company or employees
independently arranged it.

In one case, for example, a company served alcohol at its annual banquet for
employees who had put in five years of service. While driving home, an employee
who drank at the event struck and injured another motorist. The employer was
found liable because the banquet was an official company function that
employees were expected to attend, families were not invited, the vice
president made speeches, and the seating at the dinner was arranged by

Party Advice

Here are 3 suggestions to help prevent alcohol-related problems—including
sexual harassment and auto accidents—and limit your exposure to liability:

1.      Don’t serve liquor. The simple solution to the problem is not to serve alcohol at all—though this
may not be realistic.

2.      Limit consumption. You may be able to limit the amount people drink by having a cash bar or by
providing tickets good for only two or three drinks. Also, stay away from sweet
punches containing alcohol. These can make it difficult for people to tell how
much alcohol they have consumed—until it’s too late.

3.      Close the bar early. One to two hours before the end of the event, stop serving alcohol. If
possible, continue serving food even after the bar is closed.

To read all 11 tips to limit your liability from holiday parties, see the
article, Holiday Party Liability:
Hosting a Company Party the Smart Way

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