Have a Good - But Not Too Good - Time at Your Company Party
Believe it or not, the holiday season is upon us once again and many employers are planning their holiday parties. These events can be a good opportunity for co-workers to interact on a more personal level, and are often perceived by employers as morale-boosters. Unfortunately, some people also see these events as an opportunity to over-indulge in alcohol, opening the door to potential liability for the very employers who are hosting the parties.
Under California law, a "host" generally is not responsible for the injuries caused by a guest's consumption of alcohol. Courts have recognized an exception to this rule, however, finding that employers may, in fact, be liable for injuries caused by employees who consume alcohol at company functions. Third-parties injured by such employees have been allowed to sue companies where their employees' conduct was a "foreseeable risk" of their consumption of alcohol occurring after ordinary working hours, but still within the "scope of employment." For purposes of their analyses, courts have found that a risk is "foreseeable" if an employee's conduct is not so unusual that it would be unfair to include the loss within the employer's cost of doing business. Additionally, attending an employer-sponsored function and consuming alcoholic beverages is considered to be "within the scope of employment" if 1) the activity is endorsed by the express or implied permission of the employer and 2) there is some conceivable benefit to the employer or the activity is a customary aspect of the employment relationship.
Given the potential exposure to liability, employers should evaluate their policies regarding alcohol at company events. Clearly, the most conservative approach is to simply prohibit the consumption of alcohol at these get-togethers. This could be handled one of several ways, such as announcing to everyone that the typical bar will be replaced with seasonal non-alcoholic beverages (i.e., egg nog and hot cider), making the event more of a family affair and inviting employees' children, or simply letting employees know that no alcohol will be served.
However, many employers are reluctant to deprive their employees of this form of holiday cheer, in which case other alternatives should be considered to help reduce – albeit not eliminate entirely – potential legal exposure. Such options might include making attendance voluntary and holding the event off the company's property, using a cash bar and instructing bartenders not to serve more than a specified number of drinks to any individual, or arranging for transportation home for all employees. Finally, before any company-sponsored event, employers should remind their managers and supervisors that they serve as an example to other employees and therefore should not become intoxicated themselves.
Wishing you all a happy and safe holiday season.