Company Parties Or Legal Nightmares?


The summer provides a great opportunity for employers to host company parties for the whole office to enjoy. These parties are a great way for employers to get the company together to celebrate holidays and recent achievements. However, they also open the door to myriad liabilities that all employers need to take note of.

A major component of company parties is alcohol. However, while it is common to serve alcoholic beverages at these parties, there are many problems that can occur when an employee drinks too much that can have serious consequences for the employer. Drunken employees have often been the cause of lawsuits alleging sexual harassment, injury to oneself and/or others and drunk driving.

As to sexual harassment claims, most private employers with at least fifteen employees are subject to Title VII of the Civil Rights Act of 1964 (“Title VII”). This federal antidiscrimination statute determines discrimination on the basis of race, sex, and religion, among other things. Additionally, most states have their own antidiscrimination statutes that may be interpreted differently than the federal statutes. Although, the law makes it clear that one instance of sexual harassment is unlikely to lead to an actionable claim under Title VII, it is still possible for a Title VII claim to be brought against the employer if the harassment is particularly flagrant or severe, or if the employer knew or should have known about the harassment.

In a company party setting, a sexual assault caused by an intoxicated employee without cognizance of boundaries could be considered a particularly flagrant or severe act of sexual harassment. This could be sufficient grounds for a successful claim against the employer.  An employer may also be at risk for liability if the wronged employee can prove that the alleged accused’s conduct was not isolated to the company party, but was an ongoing harassment that occurred in the workplace before or after the party.

On the issue of drunk driving, in Sayles v. Piccadilly Cafeterias, Inc., 410 S.E.2d 632 (Va. 1991), a jury awarded more than 11 million dollars to an individual injured in a car accident while struck by a Piccadilly employee. Five minutes prior to the accident, the injured person and the employee had left a Piccadilly-sponsored “Christmas” party where the employee admits he had been drinking. The trial court in Virginia reversed the jury’s verdict.

Thereafter, the Virginia Supreme Court affirmed the trial court’s decision to reverse the jury award and grant judgment in favor of the employer. The court found that the employer should not have been held liable for reasons including: attendance at the party was wholly voluntary and the employees received no compensation for attending the party, the accident did not occur on the employer’s premises, and the event did not begin until after the workday ended. These factors undermined the argument that the employer should have been held liable for the accident.

In order to keep company parties fun and safe for everyone, it is recommended that employers take certain precautions in curtailing employee behavior. First, employers should advise employees to drink responsibly. Employers should strongly encourage employees who intend to drink to make transportation plans in advance for their own safety and the safety of others. In addition to alcohol, food and non-alcoholic beverages should always be served in order to absorb any alcohol the employees might consume. If there is a bar, the employer should opt for drink tickets in lieu of an open-bar. Also, employers are advised to ask the bartender not to over-pour drinks and not to serve alcohol to guests who appear intoxicated or rowdy. In addition, the bar should always be closed at least an hour before the end of the party to allow people time to sober up. Lastly, employees might also ask certain managers and volunteers to not drink and to keep watch over the other employees to make sure that everyone is acting appropriately and drinking responsibly or to arrange transportation.

Company parties can be a great way for employees to relax and celebrate as long as employers ensure that it is a fun and safe environment for everyone involved. By taking caution and keeping the aforementioned tips in mind, your company party is likely to be an enjoyable and safe event.

A special thank you to Cathryn Ryan, an intern at Cullen and Dykman LLP, for her assistance with this blog post.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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