For many, the holidays are a time to enjoy the season and celebrate. For employers, this sometimes means hosting a special event to thank employees and acknowledge their hard work over the year. Holiday events, however, are not without risk of liability to an employer.
Putting the Brakes on Booze
Over the last few years, there have been a number of large verdicts against employers who have failed to take steps to protect employees or innocent third parties in planning holiday functions. This follows a decision in 2013, in which a California appellate court ruled in Purton v. Marriott Int’l, Inc., 218 Cal. App. 4th 499 (2013), that a hotel employer could be held liable for a wrongful death claim that was filed in response to a vehicular homicide committed by a hotel employee following a company holiday party.
In Purton, the hotel employer 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, which occurred after the employee arrived home from the holiday party and then got behind the wheel again. The appellate court disagreed stating: “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 proximately caused by the employees.”
Purton gave Marriott a wake-up call, reminding all employers to carefully examine how they might plan their events to limit harm to employees or others.
In addition to reviewing your insurance policies to make sure that your company is covered for any social event-related liability, you also want to take practical, commonsense steps to make your event safe for your employees. The safest route is obviously to not serve any alcohol at the event, or to host an event earlier during the day to reduce the likelihood of over-imbibing. But based on company traditions or employee expectations, that may not always be possible. If a company wishes to still go forward with alcohol offerings, employers should set rules for imbibing (and enforce them), offer alternatives, and provide for safe transportation of employees.
For starters, companies should limit the amount of alcohol to be served. This can be accomplished by using “drink tickets”, which limit the number of drinks a person can be served at the bar. Companies should also strongly consider informing event participants in writing that post-event transportation should be considered, or even company-sponsored following the event. For example, employers can inform participants that they will be reimbursed for any post-event transportation home. Employers should also consider designating certain persons at the event as non-drinkers that can monitor and watch out for colleagues that may have imbibed too much. Companies should also consider not serving hard liquor, and hiring professional bartenders in lieu of simply placing alcohol out for self-serve.
No Mistletoe Allowed: Enforcing Your Company’s Personnel Policies at Events
Employers and employees need to be aware that personnel policies still need to be followed and enforced at holiday events. A combination of a friendly atmosphere and alcohol might create a mix that may lead to inappropriate conduct. Even if a holiday party is at an off-site venue, employers might still be responsible for claims that arise out of inappropriate or offensive conduct among employees. This is particularly true for supervisors who should be held to a higher standard in their conduct with subordinates.
Employers should also strongly consider nixing the mistletoe or other themes that lend themselves to romantic suggestion at holiday events. Even the traditional “white-elephant” gift exchange tradition might need to be abandoned if it could lead to off-color joking or embarrassing ribbing of employees.
No One Should Be Forced to Have Fun: Reminding your Employees That Participation is Voluntary
Pre-event written communication to employees should unambiguously state that attendance is voluntary in order to limit claims that time spent at the event is compensable as hours worked. Non-exempt, hourly employees could claim that they were “pressured” into attending an after-work party or that they felt that they needed to provide “face-time” after hours if the company message is inconsistent. Employers should also consider not distributing bonuses or awards during such off-work events, which might make it seem more like an extension of the workday. Also keep in mind that for employees who financially rely on end of year bonuses, they may not wish to receive sensitive information regarding the amount of a bonus at a social after-hours event.
To reduce wage and hour claims, employers should consider having the event outside of normal business operation hours. Alternatively, if the holiday event is held during regular hours, employers should consider making it compensable time, but also be very mindful of wage and other meal and rest period requirements. Companies need to remember that hourly employees that are helping plan or organize the event need to be paid for their efforts during or leading up to the holiday events.
Last Note to Employers: Company-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. Indeed, there are many reasons to celebrate employees who make businesses successful. However, such holiday celebrations, especially when mixed with potential claims, can present some risk. It is therefore important that companies take simple steps to reduce their liability by making such events purely voluntary, controlling alcohol consumption, and making sure that anti-harassment policies are enforced.
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