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Attorney Blog, Human Resources

Holiday Parties and Employer Liability: Is Alcohol OK?

Attorney Harrison Oldham

Well, it’s that time of year again. Time for potlucks and holiday lunches and corporate outings. And just as every year, you will invariably get questions or at least thoughts about including alcohol at any of these functions. Well, if you are thinking of providing or making alcohol available at any corporate function, you may want to think again. Employers that make alcoholic beverages available at company functions, or who allow employers to drink alcohol on company premises, or while on company business may be liable for injuries caused by intoxicated employees.

Lawsuits attempting to hold employers liable for damages or injuries caused by an intoxicated employee are generally based on one or more of the following legal theories: direct negligence, vicarious liability, or statutory liability.

Negligence: Traditionally, courts have held that there is no cause of action in negligence for an employer making alcohol available to a consenting employee. Generally, the thought is that the consumption of alcohol is the proximate cause of the injury, not the act of making it available. However, a number of states have developed exceptions to this general rule where the provider gives alcohol to a person that they know, or should know, is intoxicated, or under other circumstances that create an unreasonable risk of harm to others. Those circumstances include cases where the employer knows that the person will be operating a vehicle in the near future, the provider knows that the person given alcohol is a minor, or the provider knows that the person has a physical or mental condition that will be affected by the consumption of alcohol.

Vicarious Liability: Courts have held that an employer may be vicariously liable for the actions of an intoxicated employee under the theory of “respondeat superior.” In general, these actions are limited to situations where the employee is acting within the scope of their employment or is within the control of the employer. Factors that courts consider when determining if these situations occur include whether the employer requested or required that the employee attend the event, the employer picked up the expenses for the event, or the employer derived a business benefit from the event.

Statutory Liability: A number of states have enacted civil damages or dram shop laws that give a right of action to people injured by an intoxicated person and against the person furnishing or selling the alcohol that caused the intoxication. Most of these statutes apply only to commercial servers of alcohol, such as bars or liquor stores. However, certain states have enacted statutes that impose some form of liability on noncommercial servers of alcohol.

So, if after all that, you are still interested in providing alcohol at a company event, then it’s probably best to take some precautions that will lessen your likelihood of any liability.

First, before any company events with alcohol are held, you should develop a company policy concerning employee consumption of alcohol on company property, while on company business, or at company-sponsored social events. The alcohol consumption policy should specify whether drinking alcohol is allowed and under which circumstances and, if alcohol is allowed, it should add limits to the amount of alcohol any employee is allowed to consume. In addition, the policy should be documented in writing, communicated to employees, and vigorously enforced.

Second, take precautions in planning your events. Take time to think through the setting of the event, the timing, and the location. An early afternoon meal on company property with a few bottles of win is much different from a Friday evening dinner at a restaurant with an open bar.

Finally, if you see an employee at an event that has had too much to drink, or is anywhere close to that, take action. Ensure that the person does not consume any more, think of providing safe transportation and consider removing the person from the event, in a tactful, non-embarrassing fashion.

There is no reason why companies and their employees cannot have fun during the holiday season, but it’s always important to take precautions to ensure that everyone has a safe, happy, and healthy holiday season.

About Harrison Oldham

Harrison grew up in Mansfield, Texas. He attended Texas A&M University for his bachelor’s degree, where he met his wonderful wife, Kelsey. After graduating magna cum laude from Texas A&M, he attended SMU Dedman School of Law, graduating with honors in 2012. Today, Harrison and his wife live in Dallas, Texas with their son, Teddy.

Since graduating from SMU Law, Harrison has worked exclusively in the field of business law. He has spent time in private practice and in-house, working with clients of every size; from single person startups to Fortune 250 companies. Today his practice focuses on serving the diverse needs of businesses and individuals throughout Texas. You can learn more about Harrison by visiting his website, at: http://lonestarbusinesslaw.com/.

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