To start, for any company-sponsored gathering, liability cannot be totally eliminated. Even if attendance is completely voluntary for your employees, if the event is held on your property they will still be “invitees” like all other invited guests, such that any injuries, etc. they experience in connection with the same would need to be covered by your general liability insurance.
In both Tennessee and Georgia, this would NOT cover those who choose, for example, to drink and drive following such get-togethers, whether your employees or not, as the “dram shop” laws of both states provide that legal causation for any damage caused by an individual’s choice to become intoxicated cannot be attributed to the “host” who furnished the “means” by which they did so. The only two (2) exceptions to this in Tennessee are if the “host” does not guard against selling alcohol to those under 21 or those who already are visibly intoxicated and they cause injury to third parties. Georgia law contains two (2) similar exceptions, but these can extend to those who sell as well as those who merely furnish the “means.”
There are other important reasons to follow the L-I-M-B principle when hosting a holiday gathering however.
L – LIMIT: Companies should LIMIT the amount of alcohol any guest is permitted to consume. Some companies do this by providing “drink tickets,” or by only having an open bar for an hour or so into the party, such that all guests have to begin purchasing their own libations after a certain point. [Tip “B” below also can help tremendously with this.] Providing food rather than only “drink” at such events also can mitigate the effects of the spirits. “Sit-down” or even “buffet-style” dinners rather than “stand-around-the-bar” type gatherings also can allow you to better limit the consumption of alcohol – and often budget-wise come out about the same as providing an open bar, unless your holiday party is only going to last an hour or so.
I – INVITE: Companies should give strategic thought to who should be INVITED to such gatherings – all employees, only senior level employees (if it is an event for clients vs. “employees only”), employees and their spouses or significant others, etc. WHO the company decides to include on the guest list will then dictate what parameters it will need to take regarding tips “L, M and B.” For example, if “all employees and their spouses or significant others” are going to be invited, the need for LIMITS, MONITORS and a professional BARTNEDER will be higher than if you are only having a smaller get-together involving only employees. The same will be true of a large “clients and/or spouses” event, where the ability to predict individual judgment when it comes to the reasonable, controlled consumption of alcohol is going to be difficult.
M – MONITOR: Regardless of how large or WHO is on your holiday event guest list, if you are “inviting” alcohol you are also “inviting” an increased chance of liability for harassment through the combination of a social setting and “shots of liquid courage.” Having designated MONITORS in place who agree not to “partake” during the event and who are charged with “keeping their eyes and ears open” can help avoid these situations. Planning the event for earlier in the evening – perhaps right after work on a Thursday or Friday -- rather than later in the evening can help with this as well. Providing entertainment also can help lessen the pressure for your guests to feel the need to provide their own!
B – BARTENDERS: If your company does not have a liquor license and is not hosting your event in a private home or other non-commercial venue, you will be required to use a caterer and/or venue with such a license in order to be able to lawfully serve alcohol. Using the caterer or venue’s professional BARTENDERS (is usually required by the caterer or venue for this reason, but even if it is not) is also a good idea, as these individuals are trained to recognize and handle those who have “had too much.” They can team up with your MONITORS to let them know when you need to call a cab or otherwise make arrangements to “help” one of your guests whose “fun limit” has been achieved.
It seems no “alert” nowadays is complete without a reference to either the NLRB or wage and hour law. Unless you just want to invite them to your holiday party this year, we will spare you the NLRB reference in this one. However, regarding wage and hour law, be aware that if you are asking a non-exempt employee to serve as a “MONITOR” you will need to compensate this person for this time – including paying them overtime if this “holiday event” time puts them over 40 hours for the workweek. The same is true for any non-exempt employee you ask to serve as a “client greeter,” “valet,” “server,” “coat check” person, etc. No matter how “nice” the non-exempt employee is to “volunteer” to assist your company in this way, you still need to pay them for their time in order to avoid a potential wage and hour law violation. [Note that having employees – whether exempt or non-exempt -- “help out” at a holiday gathering will bring this gathering within the “scope and course of their employment” for workers’ comp purposes too. This is the reason many companies use professional valets, servers, etc. that are bonded by another entity even if hosting the event on their premises.]
A few final practical tips in this area:
● Close the bar at least an hour before the gathering’s anticipated end and serve only coffee and soft drinks from that point forward;
● Instruct all management personnel that they are not to attend any “after parties” (particularly if alcohol is involved at the company party);
● Remind employees that normal workplace standards of conduct will remain in force during the gathering and failure to act appropriately will result in disciplinary action just as it would during normal business hours;
● Both before and during the party, advise your guests of the availability of a company-paid taxi service should they feel unable to drive home and/or be prepared to provide hotel rooms for intoxicated guests.
While some of these tips may minimize the “cheer” associated with holiday festivities, they are all designed to ensure that everyone can enjoy a comfortable, festive and (hopefully!) litigation-free New Year.
In light of the economic stresses many companies are experiencing, many have opted in recent years for a holiday luncheon to which employees and/or clients, depending on the company’s size, are invited. These can provide a tasteful alcohol-free or one glass of wine, etc. option which can be lower budget- as well as liability-wise – plus is an easier fit into everyone’s busy holiday schedules -- than an evening event.
On behalf of all of us at Miller & Martin, we hope you have a wonderful (and liability-free!) holiday season
The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance. Should you need assistance from a Miller & Martin attorney, please call 1-800-275-7303.