Question:

Last year our company holiday party was held at our office. We had tables with alcoholic beverages and people were free to drink as much or as little as they wanted. Unfortunately, some people over-consumed and, in retrospect, we regret that they were allowed to drive home. In addition, we have some minors working at the company and we know that at least a couple of them drank alcohol that night. Is my company at risk if we have the same type of holiday party this year? What are some steps we could take to reduce the risks?

Answer:

Yes, your company is definitely at risk. If you serve alcohol to minors and if you are reckless when serving it to your employees, your company could potentially be liable for any accidents, injuries, and/or property damage that those individuals are later responsible for. Whether or not an employer was reckless when serving alcohol to its employees is generally a factual decision for a judge or jury. Factors that will be looked at include whether the employer encouraged excessive drinking, whether the employee at issue was visibly intoxicated, and the nature and the purpose of the event at which the alcohol was served. Events where attendance is mandatory and where company business is discussed are more likely to lead to employer liability than voluntary social events.

There are a number of steps you can take to reduce the likelihood of liability in the event that one of your employees has too much to drink at a company-sponsored event.

  1. Limit consumption. This can be accomplished by charging for drinks, or by providing a limited number of “drink tickets” or coupons to each employee. Another way to limit consumption is to stop serving alcohol 1-2 hours before the end of the event, and to offer employees a variety of non-alcoholic beverages as an alternative.
  2. Make attendance at the event optional. The fact that company-sponsored events are optional should either appear on the invitation to the event in question, or should be stated in your employee handbook.
  3. Have the party off-site. Employers are less likely to be found liable for the conduct of intoxicated employees if events are held at a restaurant or bar licensed to serve alcohol, and if it is the restaurant or bar’s employees that are responsible for serving the drinks.
  4. Arrange for alternate transportation. Employees should be encouraged to utilize designated drivers, or should be offered other transportation options such as taxi vouchers.
  5. Establish an alcohol policy. A company policy prohibiting excessive drinking at company functions, and providing that employees who violate that policy will be disciplined, is another way to discourage excessive consumption. This policy should also make it clear that minors are strictly prohibited from drinking alcohol at company events, and that both minors that drink and anyone who provides alcohol to a minor is subject to discipline up to and including termination.
  6. Take steps to ensure that the event is a social rather than a business event. This would include keeping discussion of business to a minimum, holding the party outside of regular business hours, and inviting spouses, dates, and/or family members to attend.

There is really no way that you can have a holiday party where alcohol is served and still be able to completely insulate your company from liability. However, as set forth above, there are a number of practical steps that you can take to help your company avoid liability and, more importantly, help keep your employees safe this holiday season.
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