Diversity & Inclusion, HR Management & Compliance

Employee Misconduct at Off-Site Party May Qualify as Workplace Harassment

Is an employer liable for employee misconduct at “after-hours” gatherings? When a trial court adopted a narrow view of what constituted “the workplace,” an appeals court weighed in using a “totality of the circumstances” test.

off-site work party
Source: skynesher / E+ / Getty Images

Party, the After-Party, and After-Party Complaints

Kelly Phelps worked as a server at a state park restaurant in Tennessee. On October 17, 2017, she and other park employees were strongly encouraged to attend a state-sponsored “adults only” Halloween costume party at the restaurant where many of them worked. At the party, which was planned and thrown by Phelps’ two direct supervisors, employees were encouraged to drink, given “buy-one-get-one-free” drink coupons, and sold homemade Jell-O shots.

After the party at the restaurant, several employees went to an after-party at a building maintenance worker’s residence, which also was located on state property. According to Phelps, it was at this party that Josh Walsh, who was the assistant park manager and “second in command,” grabbed her by the neck and thrust his body against her in a sexually suggestive manner. She claimed this occurred not once but twice at the after-party.

Phelps and several other attendees subsequently complained about Walsh’s behavior at the party. The female park manager initially blamed the women and suggested Walsh’s behavior was acceptable. After learning others also had been sexually assaulted, Phelps filed a written complaint with the employer.

Despite the written complaint, the park allowed Walsh to continue working around Phelps and the other women who had alleged harassment:

  • Coworkers confirmed Walsh continued to harass and threaten Phelps after her complaint about his conduct at the party.
  • He drove past her house, came to the restaurant to stare at her, and was in the parking lot when he knew she was leaving (she usually asked a coworker to walk her to her car).
  • She and her coworkers who had complained were required to wait on him when he ate in the restaurant.

Phelps also believed she was a retaliation target for complaining about Walsh’s behavior. According to her, she was scheduled for less-crowded shifts, which equated to fewer tips, and was given less favorable assignments during her shift. Additionally, although several women were scantily clad at the Halloween costume party, only she received a written reprimand for “an inappropriate article of clothing.”

Phelps filed a lawsuit for sexual harassment, discrimination, and retaliation.

Courts Weigh in on After-Hours Liability

The trial court found evidence to show an intoxicated Walsh groped, molested, and made at least five women uncomfortable at the party and that multiple state park employees filed written sexual harassment complaints. Nevertheless, it ultimately dismissed Phelps’ lawsuit because the sexual assault didn’t happen “in the workplace.” The court noted the after-party took place at a private residence, attendance was voluntary, and the event wasn’t connected to work.

Phelps appealed the dismissal of her claims, and her lawsuit against her employer was reinstated. Looking at the “totality of the circumstances,” the appeals court found the conduct at the after-party could be considered harassment at work. The court considered the proximity in space and time to the workplace, the pressure for employees to attend, and the following facts:

  • The majority of the people at each party were employees;
  • The employer sponsored the initial party;
  • It provided alcohol and encouraged employees to drink;
  • The after-party was a continuation of the first party; and
  • The employer may have known about Walsh’s previous inappropriate behavior.

Phelps v. State of Tennessee, Case No. M2020-00570 (Tenn. Ct. App., 3/10/21).

Employer Takeaways

First, have a system that allows employees to report sexual harassment via multiple, alternative methods (e.g., supervisors, an anonymous hotline, e-mails to HR).

Second, investigate any harassment complaints. Don’t require a “formal” written complaint. When you learn of possible harassment, be proactive and investigate.

Third, when the harassment complaint is serious, such as an assault, don’t require the alleged victim to continue to work for or around the alleged harasser.

Finally, train supervisors on how to handle complaints and train employees and supervisors regarding what constitutes sexual harassment.

Note: Business dinners and trips where alcohol is served and a sexual assault occurs are more likely to be considered a workplace assault. Otherwise, construing the concept of “workplace” strictly would allow a harasser to choose a place to assault a coworker without liability. The precise location of the harassing conduct shouldn’t detract from the real focus: harassment that affects a victim’s work environment.

Roberta Fields is an attorney with McAfee & Taft in its Oklahoma City office. You can reach her at roberta.fields@mcafeetaft.com.