Taming Down The Holiday Office Party

December 10, 2007
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GRAND RAPIDS — Holiday office parties can result in a headache for employers if alcohol is served and employees indulge in a little too much holiday cheer. Employers can be held responsible for alcohol-related incidents or accidents during or after the party, but there are ways they can mitigate their risk.

Lou Rabaut, a partner with Warner Norcross & Judd, has seen the kinds of problems that can arise when alcohol is served at the company party: An employee leaves the party and gets into a collision or gets pulled over for drunk driving; a liquored-up employee behaves inappropriately with a coworker and the incident triggers a sexual harassment charge; an employee with a belly full of liquid courage decides to take on the boss. 

As the sponsor of an office party, the employer bears “social host” liability, and the courts have increasingly  held social hosts responsible for car accidents or property damage caused by a partygoer who over imbibes at the host’s party, according to Warner Norcross.

The “Exclusive Remedy” provision of the Workers’ Disability Compensation Act that typically protects employers from tort liability when an employee is injured on the job doesn’t extend to company office parties because they are social and recreational activities by nature. 

Rabaut believes there has been a general change in philosophy in recent years. There is greater awareness today of the inherent dangers of drunk driving as a result of organizations such as Mothers Against Drunk Driving and Students Against Drunk Driving, which have not only raised the social consciousness but successfully lobbied for harsher penalties for convicted drunk drivers.

Correspondingly, there has been a shift over the years in alcoholic company functions, Rabaut observed. He said in 2005 and 2006, 64 percent of employers reported serving alcohol at holiday parties and that has dropped to 59 percent this year.

“I would say that has been a trend over time, where it was much higher than 64 percent years ago,” Rabaut said “Most organizations reported that if they’re offering alcohol, they’re also taking measures to limit consumption.”

One obvious way to avoid potential liability is to make the holiday party alcohol-free. If alcohol is to be served, the employer has to take steps to ensure no minors will be served. One of the challenges is that another employee might offer to get the minor a drink on the sly, Rabaut pointed out. The courts are sticklers when it comes to furnishing alcohol to minors and are likely to hold the social host liable.

Some employers try to limit consumption at their holiday office parties by offering beer and wine but no liquor. Others may put a cap on consumption by offering booze during a scheduled cocktail hour, but not during the remainder of the evening, Rabaut noted.

“A company could offer employees free cab rides home the night of the party and a free ride back to work in the morning “no questions asked,” Rabaut said. Or an employer could offer a reward to employees who come with a designated driver, or could give each employee a set number of “drink tickets” that are their only means of obtaining alcoholic beverages.

“One of the things I’ve seen employers do is send out a notice before the party, saying, ‘Yes, we are going to serve alcohol and we want to remind everybody that we’re still professionals and we all have to come back to work tomorrow, so please be responsible.’ It’s almost a pre-warning about the expected conduct at the event.”

Rabaut has seen some employers use a “designated manager” to monitor employee drinking during the course of the holiday party. The designated manager doesn’t drink at the party and his job is to keep an eye open. If he spots someone who has had too much, it’s his responsibility to approach the person, take their car keys and arrange for transportation home. It’s no questions asked, and the manager assures the individual that it won’t be an issue when he comes back to work, Rabaut explained

Some companies stage their holiday parties at a bar, club or restaurant where alcohol is served by a licensed third party, thus the employer’s liquor liability is minimized because he’s not the dispenser of alcohol.

“I think that’s one of the biggest moves people are making,” Rabaut said. “They’re putting their trust in someone who will check IDs and who will refuse to serve someone who is inebriated. They’re putting the burden on the third party.”

Rabaut said he’s also seen, in rare cases, employers who buy a separate insurance policy to cover a social event.

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