Plan Ahead to Avoid Holiday Party Pitfalls

This article, authored by Mark Moldenhauer, originally appeared in the December 10, 2012 issue of the Buffalo Law Journal.

With calendars flipped to December, many companies are putting the final touches on holiday party plans. These celebrations offer an opportunity to unwind, socialize, and reflect on the achievements of the past year, all outside of the hectic business environment. Employers need to be aware, however, that holiday functions also raise a host of potential legal problems, especially when alcohol is served. So while the trimmings and trappings deserve due attention, prudent employers should also consider ways to minimize the chance for a legal hangover.

1. Boughs of Holly Are Fine — Forget the Mistletoe!

Some people tend to exude an excessive amount of cheer during the holiday season. Stories abound about executives dancing provocatively with interns or messengers flirting with the CEO’s spouse. While no one wants to bah-humbug the festivities, it is important for employers to keep in mind that many of the same rules that apply in the workplace must be enforced at holiday parties. This includes policies that prohibit sexual and other forms of harassment.

If you rely on a vendor or banquet facility to coordinate the event, be explicit that you intend this to be a professional function (yes, ask the DJ for a set list). While gag gifts and "roasting" speeches might be popular, a fine line exists between good-natured ribbing and public humiliation. Ideally, any gifts and planned remarks should be vetted and approved in advance. Few things ring in the New Year worse than a hostile work environment or discrimination lawsuit.

2. Take It Easy on the Eggnog

Whether it is loosening inhibitions or causing problems after-the-fact, alcohol is frequently the cause of holiday party problems. As the sponsor, an employer must be keenly aware of the risks posed by serving alcohol and consider different options to reduce those risks.

In New York and several other states, “social hosts” are generally not liable for alcohol-related accidents or injuries suffered off-premises by third parties. This is not the case in every state, so an employer should familiarize itself with the applicable law where the function is being held. Also keep in mind that when revelers cross state lines, a claim might arise in one jurisdiction even though the host would not be liable to third parties in the state where the party actually occurred (for instance, a party in New York followed by an accident in New Jersey). In addition, employees and guests under the age of 21 must never be served alcohol. Many states, including New York, specifically allow claims against social hosts when alcohol is served illegally. For this and other reasons, employers should insist that bartenders check ID or use some other system to ensure that they are not giving alcohol to underage attendees.

As for injuries suffered after the party by inebriated employees or guests, courts will typically find that a person’s voluntary intoxication caused his or her injury. This includes situations where an employee or guest gets hurt in a motor vehicle accident. Of course, this does nothing to lessen the non-legal consequences of someone becoming injured or worse while driving home from a holiday party.

On-premises injuries are a different story. An employer has a duty to prevent harm to those on its property and in areas under its control, which could include an off-site facility that the employer leases for its holiday party. If the employer learns that an employee or guest is intoxicated or otherwise acting inappropriately, reasonable steps should be taken to prevent the situation from escalating.

An employer-sponsored holiday party will almost certainly be considered as relating to employment, even if attendance is voluntary. As a result, the exclusive remedy for an employee who suffers an injury at the party will normally be workers’ compensation benefits. That said, injuries caused solely by alcohol consumption are normally deemed non-compensable under most workers’ compensation laws, including New York’s. Also, injuries suffered in a car accident during an employee’s drive home will not likely be covered since commuting is generally considered outside the scope of employment for workers’ compensation purposes.

3. Make Your List . . . and Check it Twice

Without a doubt, holiday parties have their advantages, including the positive impact on employee morale. Employers are encouraged, however, to do some advance planning in order to at least reduce potential risks. Taking proactive steps will hopefully allow everyone to enjoy themselves, both during and after the party.

In addition to the measures discussed above, consider taking the following steps to help ensure that your festivities remain safe and jolly:

  • Arrange transportation to and from the event or notify employees and guests that the company will cover cab fare;
  • Coordinate discounted rates for employees and guests with nearby hotels;
  • If the party is on the employer’s premises, hire a professional bartender or caterer and confirm that they carry sufficient liability insurance;
  • Instruct bartenders to serve conservatively, “cut off” anyone who appears intoxicated and prohibit employees and guests from serving drinks;
  • Limit the amount of alcohol served by providing non-alcoholic options, reducing the hours of open bar, giving attendees vouchers for drinks or using a cash bar;
  • Recruit spotters to watch for excessive drinking and other inappropriate behavior;
  • Serve foods that are rich in starch or protein to slow the absorption of alcohol and avoid salty foods that encourage people to drink;
  • Contact your insurance carriers to discuss whether current policies provide sufficient coverage and, if not, purchase a product that will;
  • Consider alternative formats which discourage heavy drinking, such as a breakfast or lunch function or a party with significant others and children;
  • Advise employees that attendance is strictly voluntary and refrain from activities that can be viewed as compensable work under the Fair Labor Standards Act;
  • Schedule the party on a day that will not conflict with any employee’s religious observances; and, last but not least,
  • Remember: “Holiday Party” not “Christmas Party”! Most workplaces are incredibly diverse and comprised of individuals who celebrate a variety of religious and secular holidays. Do not engender feelings of exclusion by emphasizing one particular set of traditions or beliefs.