Part II: Understanding potential liabilities associated with alcohol consumption at employer-sponsored events and what to do about it.
While an employee's potential liability for injuries caused by employees who consume alcohol at company holiday functions varies from state to state, possible theories of liability include negligence, respondeat superior (where an employer becomes liable for the actions of his employee while that employee is in the course of employment) and social host or dram shop liability. As to social host and dram shop liability, this theory holds the provider of alcohol responsible for any injury or death to a third party caused by individuals who are intoxicated. Laws for social host and dram shop liability differ from state to state. As an employer, you are facing three major areas of liability anytime you open the door to a party or office gathering, particularly during the holiday season, that has alcohol.
If you decide that serving of alcohol is the route you are going to take then you need to absolutely consider the following measures:
1. Hold the event at a restaurant or other off-site location. In this way, you have access to professional bartenders who are clued into knowing when guests are turning the corner, so to speak.
2. For on-site events, you should again hire a professional bartender. If you hire a caterer or bartender to assist, make sure you have done your due diligence by making sure that those providers carry sufficient liability insurance. Further instructions must be provided by the employer that no serving of alcohol is to be provided to anyone who is visibly intoxicated.
3. Limit the amount of alcohol to be served. Whether you are on-site or off-site this is another layer of protection against the three theories of liability. This can be done through the use of drink tickets.
4. Provide Alternative Transportation. Driving drunk from a party is the chief way that the social host/dram shop liability is commenced. The alternative transportation options should be indicated with clarity at and before the event.
5. Employees assistance. Not only with respect to alternative transportation possibilities, but also, using non-intoxicated employees to act as “spotters” at a corporate function to find those employees who might be intoxicated. The use of such employees for this purpose may trip the Fair Labor Standards Act. Such employees may need to be compensated unless they agree to work “off the clock.”
6. Make sure that any outside venue is properly licensed. If an outside venue is licensed they may have additional liability insurance in the event of an occurrence. Additionally, such licensing subjects those establishments to governmental inspections.
7. The potential purchase of insurance covering Dram Shop or liquor law liability in those states that recognize those causes of action. A review of corporate insurance policy would be a wise idea considering that many policies may have existing comprehensive coverage for such events.
The key for all employers is to apply common sense and practicality to how you manage your event. Make sure that you cover all of your bases and spend the extra time and money necessary to provide the safest environment to all who attend your company holiday functions. A few extra dollars spent upfront will potentially save you a lot at the end. At the Katz Law Group, we can help you save the headaches and liability associated with holiday parties. Call the Katz Law Group for a consultation in this area at 508-480-8202.