A recent verdict finds a California restaurant legally and financially liable for the consequences of an employee’s off-duty alcohol consumption. Klinedinst employment attorney Nadia Bermudez analyzes this ruling, and offers guidance on preventative steps that California employers should take to reduce risk.
On February 8, 2016, a San Diego jury delivered a $1.5 million verdict against On The Border restaurant for its role in a serious alcohol-related injury. This verdict can have a sweeping impact on any employer, large or small, who serves alcohol to employees at company functions or its premises after work.
In the recent case, the restaurant employee finished his shift and then stayed at the restaurant, socializing and drinking alcohol with his co-workers. The employee left the restaurant in a car and seriously injured a young man on a skateboard. A lawsuit was later filed against On The Border. The plaintiff’s lawyers argued that because the restaurant regularly permitted employees to drink on the premises and that the restaurant derived a benefit from that activity, the restaurant should be held negligent for the harm caused by the inebriated employee. On the other hand, lawyers for the restaurant unsuccessfully argued that the employee should have been characterized as a customer at the time since he was off-duty while drinking and he paid for his drinks. The jury sided with the plaintiff and found that the driver was acting “within the scope of his employment,” holding his employer legally and financially liable in the suit.
The case, however, is not based on a novel interpretation of the law. In 2013, the Court of Appeals similarly ruled against a San Diego hotel based on similar unfortunate facts. In Purton v. Marriott Int’l, Inc., 218 Cal. App. 4th 499 (2013), the Court of Appeals examined a wrongful death claim brought by a doctor’s family related to a vehicular homicide committed by a hotel employee. In that case, what was intended to be a celebratory event thanking employees during the holiday season ended in tragedy. A hotel bartender consumed excessive alcohol prior to and during a company-sponsored holiday party. Even though the hotel employer sought to limit the employees’ alcohol consumption by having a drink ticket allotment and only serving beer and wine, those rules were not enforced. The employee brought his own liquor in a flask to the company party, which was refilled by another employee. The employee drove home shortly after the party. He then left his home and returned behind the wheel of his car to drive an intoxicated co-worker home. While driving at speeds in excess of 100 miles per hour, he struck and killed another driver on the road. The employee was convicted of vehicular manslaughter and received a six-year prison sentence.
Marriott asked the trial court to dismiss the civil case because the employee was “not acting within the scope of his employment” at the time of the fatal accident. Marriott also argued that it should not be held liable because it had no right to control its employee after he reached home. The trial court agreed, but the appellate court reversed, rejecting both of those arguments, stating that “if a commercial enterprise chooses to allow its employees to consume alcoholic beverages for the benefit of the enterprise, fairness requires that the enterprise should bear the burden of injuries caused by the employees.”
Note to Employers: In short, employer-sponsored social events will generally be considered within the scope of employment because it is assumed that employers ultimately benefit the employer by increasing company morale and improving employer-employee relations.
According to recent data from the Centers for Disease Control and Prevention (CDC), about one in three traffic deaths in the United States involve a driver with a blood alcohol concentration of 0.08% or higher. Employers therefore should use caution in serving any alcohol to employees on its premises, especially when they might be operating a vehicle afterwards. Also, when planning festive events such as holiday parties and company retreats, California employers are urged to take steps to limit or eliminate alcohol offerings. If alcohol is offered, employers are well advised to set rules for imbibing, offer alternatives, and provide for safe transportation of employees.