Human Resources

SBS 235: Employer Liability Concerning Alcohol At Holiday Parties

Hey Compliance Warriors!

With the holiday season upon us, we all like to get together to celebrate a great year and holiday parties are a great way to show our employees how much we appreciate them. However, we also want to protect our company. So, here are some tips and things to think about if you, as the employer, plan on serving alcohol at these events.

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Enjoy and until next time, Be Audit Secure!


Lisa: Today we are kicking off a series of three podcasts leading us up to the Christmas holiday that are going to address a lot of the questions we get from our members regarding how do you navigate holidays and still, stay out of prison.


Mason: Yeah. Basically, we’re talking holiday parties, especially for the next two weeks. Today’s podcast is going to be concerning as you saw on the topic. Employer liability when it comes to alcohol, at a holiday party. And then next week you’ll want to stick around because we’re going to talk about how to have a harassment free, holiday party. So, a couple of interesting topics coming up on this.


Lisa: Yes, definitely. And then in our third week, the week right before Christmas, we’re going to be talking about pay issues that we have been getting flooded with Questions on regarding holiday pay, how it interacts with your regular schedules, your exempt employees and so forth. So stay tuned for that one too.


Mason: Yep, that’s right. So, we’re going to talk a little bit, about holiday parties. And last week our attorney that we, freelance with had posted an article, called holiday parties and employer liability is alcohol Okay? So, we’re going to kind of break that down a little bit today.


Lisa: Yeah, definitely. Cause this is the time of year when you’re having all of the parties. Sometimes it’s lunches and corporate outings and team building, but sometimes it’s just a straight up party with drinking and dancing and  wherever the evening takes you.


Mason: Exactly. So why don’t you just explain a little bit about our ask of an attorney feature, where this comes from, how it kind of works.


Lisa: Yeah, Our attorney is amazing. His name’s Harrison Oldham and he works with us on a basis where, our members and you have to be a member to do this by the way. But our members will ride in a question that maybe they would trust our SPHSR, but they would really like to hear it from an attorney’s mouth. And so, he will answer two to three questions every week. And what he does is he doesn’t answer you directly in your email. He posts his answer under our ask and attorney section on our website. So again, it’s for members only, but if you’re a member you can log in and you could go to ask an attorney and then you can read like hundreds of responses that he’s given in the last six or eight months. But anyway, so, you write in and then it usually takes him a week to two weeks to respond. So, this isn’t a kind of feature that you just want to write. If you need an answer tomorrow and he’s not your counsel on this, you’re not contracting with him, you’re not paying him for his time, he’s doing this just as a benefit to our website. So anyway, he’s super nice and he’s very generous and he’s very detailed in his answers and we really love working with him.


Mason: Yeah, and just to clarify, this is not legal advice. You cannot bring this blog post into a court of law and say, well, an attorney answered it for me. It doesn’t have any ground. It’s just hearing it from an attorney. Versus one of our SPHRS.


Lisa: Yeah. And it’s general guidelines too. Like you didn’t retain his services, you don’t have any link or relationship with him. But it is nice sometimes to hear the opinion of an attorney.


Mason: Yeah. And he’s a good writer and gives really detailed answers usually. And it’s just a nice feature for all our members because if you keep up with this blog, it’s really cool because other members can see answers to these questions and we’re not calling out anybody in general there. It’s all anonymous type stuff. But it’s just kind of questions that come day to day or interesting for people to read over


Lisa: Yeah, absolutely.


Mason: Anyway, so this is a holiday party, a question, and we’re talking about alcohol here, so let’s get into it here.


Lisa: Employers often want to make alcoholic beverages available at these company parties and sometimes they even allow employees to bring their own, to the company party and if it’s on company premises, that’s where, employers face a liability if injuries are caused by intoxicated employees. Lawsuits, are always attempting to hold employers liable for damages or injuries caused by intoxicating employees and they’re generally based on one or more of these legal theories that we’re going to talk about. The first one is direct negligence. We’re going to also talk about vicarious liability and statutory liability.


Mason: Yup. Okay. So, let’s kind of break it down here. Let’s start with negligence.


Lisa: Well under negligence, our attorney tells us here that traditionally courts have held that there is no cause of action in negligence for an employer making alcohol available to a consenting of course, of legal age employee.


Lisa: The thought generally is that the consumption of alcohol is the proximate cause of the injury, not the act of making it available. So, the fact that the employee made it available didn’t cause the injury. It was the employee who missed handled it. But, there are a number of States who have developed exceptions to this general rule and it really causes liability to sit with the person who provided it, made it available, allowed the drinking to go on.


Mason: In these circumstances we’ll include cases like are they driving when they’re on their way home? The employer knew they came in their car and gave them alcohol even though they consented to it and got in the car. But the fact that it wasn’t a safe circumstance when they got home, they got a little too much in their system. And then also another one is if you have miners working and a minor can consent to taking alcohol, but does that make it legal? Nope.


Lisa: Yes. Or if the provider knows that the person has a physical or mental condition that might be affected by alcohol consumption. This is one of those very sticky areas where we don’t always know things about our employees. But, Let’s say that we did have a conversation about, FMLA leave,  for depression or, some sort of treatment or maybe the person has a history of alcoholism and we’re aware of that. Then providing that alcohol to the person, this could be a slippery slope for it. So there are liabilities, even though we go back to the general rule of negligent has traditionally not held responsible many state and circuit court level decisions, differ with that. So there is a risk there.


Mason: Yup. For sure. It’s just some things to consider when you’re, providing alcohol at these parties with as far as being negligent and you’d be like, well, they consent it, it’s up to them. Well, not all the time. So just some things to consider with that. There’s nice, things like Uber or, just being aware of how old people are, things like that. So, okay, the next one would be vicarious liability.


Lisa: So vicarious liability, the courts have held that an employer may be vicariously liable for the actions of an intoxicated employee under the theory of respond yet superior, which is Latin. It basically means let the master answer is basically what it means. So, 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. But factors that the court considers when determining if these situations occur include whether the employer requested or required that the employee attended the event, the employer picked up the expenses for the event or the employer derived a business benefit from the event. So if any of these three areas are part of the reason the person was drinking and caused the issue, the invite carious liability could definitely be in play here.


Mason: That’s definitely something you want to keep in mind with this. They’re considering all angles. The court is considering all angles here. So, the next one would be statutory liability.


Lisa: Yeah. And here, a number of States have enacted civil damages or with what’s called a 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. So most of these laws are going to 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 non-commercial servers of alcohol.


Mason: Well, that would be the noncommercial, just to clarify, the non-commercial servers of alcohol would be the employer, right?


Lisa: Yes


Mason: In these situations. Okay, great. So these are a couple of factors. What, makes this statutory liability so dangerous? Like for example, can you provide an example


Lisa: Well, goodness, I mean if your employee drank alcohol, you provided and then drove and killed someone. I mean, we’re looking at vehicular homicide and manslaughter at the very least. And then that person, of course is liable because they did it that the intoxicated person but when they trace it backward to where did this all begin If you hadn’t done this, this probably wouldn’t have happened. And then your company can be standing liable for, if not criminal penalties, it could be millions of dollars in civil penalties. So this is not only dangerous just to the public safety, but it is definitely something that could kill your company.


Mason: Yeah, absolutely.


Lisa: if it’s small, especially that there are a few precautions that you can take that lessen the liability here.


Mason: Yeah.  So, let’s talk about that.


Lisa: Okay. Well, first, before any company events with alcohol are held, develop a company policy concerning employee consumption of alcohol on company property. Make sure that if it’s while on company business or at a company sponsored social event, all that language is also included.


Mason: Yeah. And it’s, not a bad idea, to monitor drinks, kind of think about,  when you’re take precautions ahead of time so you can avoid something during, the holiday party isn’t meant for everybody. Just come get hammered, so it’s a time to like celebrate and what a great year and they get everybody together.


Lisa: Right And our attorney also says something that’s really smart and I’ve seen this down a lot that if you’re going to have alcohol at events, then have alcohol ticket that you issue or like have a wrist band that’s required. So that means you’ve ID the person. And then on the wrist band you can have like if you’re allowing two drinks or three drinks, you can have the person serving the drink, check it off every time. So, you know that this person has only been able to get this many drinks.


Mason: Oh yeah. And that’s such a great, system to put in place. I’ve been at parties where there’s no system and everybody’s hammered. And then where there is a system like this and they’re keeping track of it and everybody’s doing the right thing, it just seems like, everything flows so smoothly and you leave that party thinking, wow, that was really fun. That was a nice. Nobody’s hurt, everybody’s good. And nobody has to think about, Oh, what did I do… the next day when they see everybody.


Lisa: it’s the best of both worlds, because they can still have some alcohol if they choose, but you’re not over-serving people and you really have a monitored way of handling it. And then if somebody who’s in charge of serving breaks this law and that traces back to them, it wasn’t your company that did this, it was that individually.


Mason: Yeah, So,wristbands and tickets are very inexpensive way to get this thing done.


Lisa: Yeah, So the second one here is, make sure when you’re planning your event, you think ahead kinda like how we’re talking about with precautions, but think about the setting of the event, the timing, the location. So clearly if you have a holiday party that lasts from eight to midnight, that’s prime time for alcohol consumption and abuse. If it’s a lunch or it’s an afternoon or it’s a Sunday, we’re not as likely to see that kind of mindset.


Mason: Yeah, times definitely make a difference. So finally, our last point here


Lisa: okay. So if you see an employee at the event that has had too much to drink or is anywhere close to that, maybe just a little slurring or a little giggling too much then ensure that that person does not get any more, cut them off, like you mentioned, call an Uber for them or a taxi or, whatever. Make sure they have safe transportation home and get them out of that situation and make sure you don’t embarrass them.


Mason: Exactly. Do it very in a tactful manner. Pay for it if you have to. Because like that little bit of money to get them home to an Uber is going to be way less than the headache


Lisa: and the court costs of the vehicular homicide case and just knowing that now you have somebody maybe death on your conscience because of what you did not do properly at your party. You know, let’s just get rid of all of that and just do it right out the out of the gate.


Mason: Yeah And tax with a service like Lyft or Uber, all that taxi service or anywhere you want to be are super accessible. It’s not like you have to live in a big city to have these kinds of services. I think those things are definitely some things to think about. And as you mentioned, tactful, non-embarrassing, kind of like, you know you don’t make it a big scene at the party. Just get somebody else or if it’s a woman and you’re a man, get somebody you trust as a woman to get them out of there in a tactical situation. Don’t make it a, we’ll talk about harassment a little bit in our next podcast, but don’t make it a harassment scene of, when people are, impaired like that, they come up with different stories of what they saw during the thing and all that. So just make sure it’s a very, tactful type situation. So, like it says here in the article in a non-embarrassing fashion, nobody wants to be embarrassed you as the employer and you’re a valuable employee.


Lisa: Yeah, absolutely. So those are some great tips. I think it’s a lot of common sense stuff, but unfortunately sometimes we get to this point in the year and we’re just, employers are just excited about showing their, appreciation and sometimes they don’t cover all their bases.


Mason: We all like to have fun. There’s nothing saying here. You can’t have fun.


Lisa: Just be smart about it.


Mason: So that’s it for this week.


Lisa: All right, well, until next time, I’m Lisa Smith

Mason: and I’m Mason Merrell.


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