While an employer'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 line of liability holds the provider of alcohol responsible for any injury or death caused by individuals who are intoxicated. Laws for social host and dram shop liability differ from state to state. If you decide that serving alcohol is the route your company is going to take at this year's holiday functions then you need to absolutely consider the following measures in advance.

1. Update your employment manuals accordingly. Advise employees to be responsible for upcoming events via email or by other means of communication. Reference the specific provisions of the employment policies covering holiday or social events.

2. Hold the event at a restaurant or other off-site location. In this way, you have access to professional bartenders who are experienced in knowing when guests are turning the corner, so to speak. If you hire a caterer or bartender to assist, make sure that you have done your due diligence by making sure that those providers carry sufficient liability insurance. 

3. Limit the amount of alcohol to be served. Whether you are on-site or off-site this is another layer of protection for every employer. This can easily be done through the use of drink tickets or a cash bar. Never, never maintain an open bar and always set time limits on when alcohol will be served during the party and try to limit the menu to beer and wine.

4. Provide Alternative Transportation. Driving drunk from a party is the chief way that social host/dram shop liability is initiated. 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. So, these 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. You want to find this out in advance. Additionally, such licensing subjects those establishments to governmental inspections.

7. The potential purchase of insurance covering dram shop or liquor law liability. A review of corporate insurance policies would be a wise idea considering that many policies may have comprehensive coverage for such events.

The key for all employers is to apply common sense and practicality to how to manage your company event. Make sure that you cover all of your bases and spend the extra time and money necessary to provide the safest environment for all who attend your company holiday functions.