Q. Our employees have proposed that the company sponsor a holiday party at a local restaurant. Although we want our employees to have a good time, aren’t we exposing ourselves to potential liability?
A. Holiday parties generally involve music, food, drink and lots of holiday cheer. They can also create legal risk.
Employers may face both criminal and civil liability if alcohol is served. Under California law, if an obviously intoxicated employee is served additional drinks at an employer-sponsored party, the company can be held criminally liable. Plus, civil penalties may be assessed if the employer (or its agent) serves alcohol to a minor or to someone with a known disability who is then injured in an alcohol-related accident.
If attendance at an office party is “a reasonable expectancy of, or expressly or impliedly required by the employment,” an employer may be subject to workers’ compensation liability for any injuries suffered by employees. In addition, an employer may be held liable for injuries to third persons caused by intoxicated employees.
Finally, sexual harassment often occurs at office parties, which could result in liability for both the individual harasser and the employer.
Here are some suggestions to help California employers strike a balance between cheer and liability:
- Hold parties during nonworking hours and off company premises, and make it absolutely clear that attendance is optional. Keep the party purely social (i.e., no employee award announcements).
- Establish and strictly enforce stringent rules prohibiting bartenders from serving alcohol to anyone who appears intoxicated, to minors or to anyone with a known disability that might be aggravated by alcohol.
- Ensure that nonalcoholic beverages are available.