Keep Your Holiday Parties Merry, Bright, and Out of Court

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Company-sponsored holiday parties can be a great way to boost employee morale, rewarding employees for the year’s hard work. Unfortunately, holiday horror stories of intoxication and offensive behavior abound. To keep your company party from becoming legendary for all the wrong reasons, we offer some examples of what not to do and some tips on minimizing the employer’s risks when sponsoring work-related parties.

What Could Go Wrong?

The most common cases arising from holiday parties have to do with alcohol consumption and sexual harassment. For example, in Harris v. Trojan Fireworks, 120 Cal. App. 3d 157 (1981), the employer held an afternoon holiday party with free-flowing alcohol. One of the company’s intoxicated employees decided to drive himself home after the party. The accident he caused injured two people in the other car and killed the third. The company was subject to vicarious liability for the driver’s actions, because his drinking had occurred in the course of his employment.

In another holiday-party-gone-bad case, a manager at a holiday party grabbed a female employee’s bottom and pushed her nametag down her cleavage. The employee complained when she returned to work. Soon thereafter, she was fired because she did not “fit in.” The claims against her employer survived summary judgment.

And after a night of drinking, even when you win, you can lose. In King v. Board of Regents, 898 F.2d 533 (7th Cir. 1990), a female professor’s boss, who was drunk at the annual holiday party, followed her into a bathroom and forcibly kissed and fondled her. A jury found in the professor’s favor against both the university and the dean personally. The verdict against the university that employed the professor was eventually overturned, but the verdict against the dean was upheld. Although the employer eventually prevailed, it was bogged down in litigation related to the 1980 holiday party until 1990.

Tips for Serving Alcohol at Parties, If You Must

The most effective way to curtail alcohol-related mishaps and liability this season is not to serve alcohol at all, but many company parties do include drinking. This year, SHRM conducted a poll and determined that 61% of companies hosting holiday parties would be serving alcohol at those parties. The SHRM poll can be found here.

If your employer would find it humbuggy to forego alcohol altogether, there are steps you can take to minimize your company’s risks:

  • Before the event, remind employees to behave professionally and not drive while intoxicated.
  • Tell managers and supervisors that they are expected to be “on duty” during the party.
  • If alcohol is served, have non-alcoholic options available and be sure to serve food.
  • Do not have an open bar. Use a ticket system to limit the number of drinks for each individual or have a cash bar.
  • Use professional, insured bartenders. Instruct them not to serve anyone who appears intoxicated and to request identification, if minors are attending. Never allow a manager or supervisor to pour drinks.
  • Consider serving only wine or beer—no hard liquor.
  • Shut down the bar one hour before the end of the party, and have food and non-alcoholic beverages available during that last hour.
  • Ask your managers and supervisors to watch out for their subordinates, to ensure that they do not drink too much or drive after having too much too drink.
  • Instruct managers and supervisors not to attend after-party gatherings.
  • Have a lunchtime party or, if it’s a dinner party, have it on a weeknight.
  • Arrange transportation for the employees at no cost to them, through a shuttle or taxi service. At a minimum, publicize taxi service phone numbers at your event.

Tips for Limiting Harassment Claims Arising Out of the Holiday Party

To minimize sexual and religious harassment claims stemming from office parties, consider the following steps:

  • Inform employees ahead of time that what happens at the holiday party does not stay at the holiday party—the usual office standards apply. Workplace rules, including anti-harassment rules, apply at all company-sponsored events, including parties.
  • Make sure that your harassment policies and training are up to date before the party.
  • Make attendance optional, so those who do not celebrate the holidays can opt out. By making the event optional, you also decrease the possibility of lawsuits based on wage and hour violations.
  • To ensure that your party is welcoming to all of your employees irrespective of their religious preferences, do not host a “Christmas Party,” but instead have a “Holiday Party.”
  • The invitations and decorations for your party should not be designed to favor or to alienate any particular religion.
  • Hold your party off company premises at a site that is ADA-accessible.
  • Consider inviting spouses and significant others to reduce flirting among employees.
  • If an incident arises that could possibly constitute sexual harassment, promptly investigate it, even if no formal complaint is made.

We wish you a safe, happy, and non-litigious holiday season!

Brian McDermott is a shareholder, and Amanda Couture is an associate in the Indianapolis office of Ogletree Deakins.


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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