WORKPLACE HOLIDAY PARTIES: RISK MANAGEMENT UPDATE

December 7, 2015

Holiday parties are a popular way for businesses and their employees to recognize and reward each other, observe company traditions, and share their holiday cheer.  A survey by The Society for Human Resource Management (SHRM) in 2015 found that almost two-thirds of organizations planned an end-of-year or holiday party open to all employees, with more than 83 percent of those organizations having a budget in place for the event.  Coming around again to that time of year, it is important for your company to be aware of the legal liability and lawsuits that can arise from hosting a party for employees and their guests.

Be Familiar with Alcohol-Related Liability

Serving alcoholic beverages at a holiday party can be a fun way to facilitate conversation and merriment, but it definitely comes with its own risks that you should work to minimize.  The main risk for party hosts is that a guest becomes intoxicated and causes injury to others, such as by driving under the influence.  Although “social host liability” for serving alcohol has been greatly limited by Idaho statute, it still exists under certain circumstances.  You should be aware of the exposure and plan accordingly.

First, the party host can be liable for injury caused by the intoxicated person if that person was younger than the legal drinking age, and the person who provided the alcohol knew or reasonably should have known that the intoxicated person was underage.  There is a particular danger here if the party has an open bar and nobody controlling access to the alcohol. 

The second way a host can be liable based on serving alcohol is if the person was obviously intoxicated at the time the alcohol was provided, and the person providing the alcohol knew or reasonably should have known about the obvious intoxication.  Supervision is especially important here because the law does not define “obviously intoxicated.”  If a guest shows signs of intoxication, the safest solution is to stop serving them alcohol.  Keeping a good stock of food and other refreshments can help.

Worker’s Compensation for Holiday Party Injuries

Worker’s compensation liability is yet another exposure.  Keep in mind that injuries at a holiday party can still be considered “in the course and scope of employment” even if attendance at the party is voluntary.  For instance, having a party on company premises and paid for by the company are strong factors in triggering worker’s compensation coverage.  Courts have also considered the amount of indirect pressure the employees felt to attend the party, as well as the degree of benefits that the employer might receive from the party, such as a tax deduction.  This exposure can be hard to gauge, and once again the best practice is to closely supervise alcohol consumption.  If a guest becomes intoxicated, make sure they depart safely in a taxi or with a designated driver.

INSIGHTS FOR EMPLOYERS

  • Have a policy in place to distinguish under-age party guests and to help ensure they are not served alcohol.
  • It is best to put someone in charge of distributing the alcohol, even if the drinks are free.
  • Consider hiring bartenders, especially for larger parties, and give them instructions on how and when to limit the guests’ consumption.

 

Please contact a Gjording Fouser lawyer at 208.336.9777 if you would like any additional information about this topic or any other employment issues facing your company.