Jingle bells, jingle bells, a lawsuit on its way! Alcohol, colleagues, and those holiday work parties are the perfect ingredients for unwanted employer liability and litigation. Personal injury and sexual harassment claims are merely examples of what might arise from a holiday work party.
Alcohol is often a staple at holiday parties, but; an employer’s liability as a result of overindulgence may depend on whether attendance at the party is mandatory. In Stephenson v. Universal Metrics, Inc., a motorist’s estate attempted to hold an employer liable after its employee became drunk at a work-sponsored function and, on his way home, killed both himself and another motorist. Luckily for the employer, the Wisconsin Supreme Court held the employer was immune from liability under Wis. Stat. § 125.035. Stephenson v. Universal Metrics, Inc., 2002 WI 30, ¶ 11, 251 Wis. 2d 171, 185, 641 N.W.2d 158, 162. Similarly, in Sayles v. Piccadilly Cafeterias, Inc. plaintiff was permanently injured in a two-car accident after he was struck by one of defendant’s employees. Sayles v. Piccadilly Cafeterias, Inc., 242 Va. 328, 328, 410 S.E.2d 632, 633 (1991). The accident occured after the employee became drunk at a Piccadilly Christmas party. Plaintiff sued defendant under the doctrine of respondeat superior, and a jury ruled in plaintiff’s favor, awarding him $11,500,000. The court eventually set aside the jury’s verdict and instead issued a defendant judgment, holding the employee was not acting within the scope of his employment when the accident occurred. Id. Although the courts in these two cases ultimately ruled in the employers’ favor, not all employers are as fortunate.
For example, in Kim v. Sportswear, defendant’s employee was killed during defendant’s Korean New Year's party, when her coworker accidentally hit her with his car as she was leaving defendant’s premises.” Kim v. Sportswear, 10 Va. App. 460, 463, 393 S.E.2d 418, 420 (1990). Though the court analyzed whether the employer was responsible for injuries under the Worker’s Compensation Act (not respondeat superior), the court, nonetheless, held the employer responsible, reasoning that the negligent employee was not intoxicated when accident occurred, the employees were expected to attend the holiday party and the accident occurred on the employer’s property. Id.
As many know, inappropriate behavior also runs rampant at holiday work parties. The Seventh Circuit, in Place v. Abbott Labs. stated, “[a]t the risk of playing the Grinch, however, we note that office Christmas parties also seem to be fertile ground for unwanted sexual overtures that lead to Title VII complaints.” Place v. Abbott Labs., 215 F.3d 803, 805 (7th Cir. 2000). Place involved a research associate-turned-lawyer who brought a sexual harassment suit against her employer after she became engaged in an affair with her supervisor, which initiated at a holiday work party. Id at 803. Similarly, in Marshall v. Cascade Utils., plaintiff brought a sexual harassment suit against her employer alleging that her coworker grabbed her buttocks at their employer’s Christmas party. Marshall v. Cascade Utils., CV-97-01655, 1999 WL 893578, *1 (9th Cir. Oct. 15, 1999). The Ninth Circuit ruled in the defendant-employer’s favor, stating that the plaintiff failed to show that her coworker’s conduct “sufficiently severe or pervasive as to alter the conditions of her employment and create an abusive working environment.” Id.
Although alcohol is often the catalyst that encourages employees to act in a way he or she normally would not, an employer should still take measures to avoid liability. With the holiday season just around the corner, employers should plan ahead before they host their holiday party. The following tips will help employers avoid liability this holiday season:
- If you host your holiday party during the week, start the party early
- Remind employees to drink responsibly through posted notices or e-mail
- Promote car-pooling, designated drivers, reimburse employees for transportation home from the party, or reimburse employees who live far away for hotel accommodations near the party venue
- Make attendance completely voluntary, not mandatory or encouraged
- Review your insurance policy
- Consider Employment Practices Liability Insurance, a byproduct of Commercial General Liability, which helps protect employers from discrimination, sexual harassment, and other claims
- Review your sexual harassment policy (if you don’t have one, you should)
- Avoid work-related activities such as the presentation of awards
- Host the party off-site, at a venue that has a liquor license
- Have a cash bar
- Consult your employment attorney!
