'Tis The Season: Employer Liability For Injuries Caused By Intoxicated Employees
Posted by Jeremy Naftel
The holiday season is almost here and many employers are planning holiday parties for their employees. Such parties are often important to espirit de corps and have become part of the “corporate culture.” Unfortunately, holiday parties have become associated in the minds of some with excessive use of alcohol. Employees, including managers and supervisors, fail to drink responsibly and become a hazard to themselves and others. In such cases, they may also become a source of liability for their employers.
Under California law, a “host” generally is not responsible for the injuries caused by a guest’s consumption of alcoholic beverages. However, this general immunity may not shield employers from liability for injuries caused by employees who consume alcohol at company functions. In several cases, California courts have allowed non-employee third parties to sue employers for the injuries and damages caused by employees, where their conduct was a “foreseeable risk” of the employee’s consumption of alcohol occurring after ordinary working hours, but within the “scope of employment.” In this context, a risk is “foreseeable” if the employee’s conduct is not so unusual that it would be unfair to include the loss within the employer’s cost of doing business. Attending a company function and consuming alcoholic beverages is considered “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. Thus, in addition to their social responsibilities as good citizens, employers who serve alcohol at company functions may have legal responsibilities to assure the safety of others.
In light of this potential for disaster, the safest course is to prohibit the consumption of alcohol at company functions. For those employers for whom an outright prohibition is unattractive, the following safeguards should reduce, but will not eliminate, legal exposure:
Have a happy and safe holiday season and a prosperous new year.
The holiday season is almost here and many employers are planning holiday parties for their employees. Such parties are often important to espirit de corps and have become part of the “corporate culture.” Unfortunately, holiday parties have become associated in the minds of some with excessive use of alcohol. Employees, including managers and supervisors, fail to drink responsibly and become a hazard to themselves and others. In such cases, they may also become a source of liability for their employers.
Under California law, a “host” generally is not responsible for the injuries caused by a guest’s consumption of alcoholic beverages. However, this general immunity may not shield employers from liability for injuries caused by employees who consume alcohol at company functions. In several cases, California courts have allowed non-employee third parties to sue employers for the injuries and damages caused by employees, where their conduct was a “foreseeable risk” of the employee’s consumption of alcohol occurring after ordinary working hours, but within the “scope of employment.” In this context, a risk is “foreseeable” if the employee’s conduct is not so unusual that it would be unfair to include the loss within the employer’s cost of doing business. Attending a company function and consuming alcoholic beverages is considered “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. Thus, in addition to their social responsibilities as good citizens, employers who serve alcohol at company functions may have legal responsibilities to assure the safety of others.
In light of this potential for disaster, the safest course is to prohibit the consumption of alcohol at company functions. For those employers for whom an outright prohibition is unattractive, the following safeguards should reduce, but will not eliminate, legal exposure:
- Make attendance voluntary and hold the function at a facility off company property.
- Use a cash bar and give written instructions that servers should not serve more than a specified number of drinks to any individual.
- Serve alcohol only at specific times during the evening (e.g., before dinner), and serve food throughout the evening.
- Arrange for transportation home, e.g., taxi vouchers and designated drivers.
- Remind managers and supervisors of their obligation to set an example and to prevent others from becoming intoxicated or driving a vehicle while intoxicated.
Have a happy and safe holiday season and a prosperous new year.
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