Are you hosting a party for your employees? Are you concerned about the possibility of excessive drinking and being responsible for the resulting damage and injury? Here's a quick look at your potential liability and what you can do to prevent it.
Unless you sell liquor for a living, your company is unlikely to be responsible for any injury caused by drunk employees under what are called dram shop laws. These laws generally only apply to commercial vendors of alcohol. Examples of vendors include bars, restaurants and package stores.
But there may be liability under social host laws and what are called respondeat superior theories of legal recovery.
Social host liability is based on the concept that, under certain circumstances, a party host serving alcohol should be responsible for the acts of drunk guests. Laws vary widely by state, with some states not imposing any liability at all on social hosts.
Most states impose liability on social hosts where:
- Alcohol is served to a minor
- The host was reckless in serving alcohol or should have recognized the extent of the guest's intoxication and not served him or her more alcohol
Whether or not a host is "reckless" in serving alcohol will always be a factual issue to be decided by a judge or jury. A social host should never serve a minor or encourage guests to drink excessively. And whether or not the social event involves business associates and employees, a social host shouldn't continue to serve guests after they're "visibly intoxicated." The host needs to stop serving when it becomes obvious that they've had too much to drink and their judgment or physical coordination is impaired.
Many states also impose liability specifically where the host is an employer and the event involves a business purpose. While laws vary greatly depending on the state, the employer host generally has a greater duty to the employee guest, due to the nature of the relationship and the perception that an employee may feel obligated to attend an office party more than some other social event.
In some states, the legal theory of respondeat superior also applies. Latin for "let the master answer," an employer is responsible for the negligent acts of the employee when the employee is acting "within the scope of employment." In other words, for the employer to be held liable, the employee must have been acting for the purpose of benefiting the employer and not himself.
Preventive Steps at Employer Events
Although entertaining is often a business necessity, there are many things you can do to lessen the possibility you'll be held responsible for your employee's actions after drinking too much:
- Make attendance at the event optional and avoid discussing business issues. Make sure your employee handbook specifically states that attendance at office social events isn't mandatory
- Make sure no minors are served
- Don't hold events involving alcohol during regular business hours
- If possible, host the event at a restaurant or bar licensed to serve alcohol, where professional waiters can monitor alcohol intake and politely cut off anyone they perceive has had enough to drink
- Another alternative is to provide everything except the liquor, and host a cash bar. That way, employees have purchased the alcohol themselves, and you're less likely to be accused of furnishing the alcohol directly to your employees
- Discourage employees from drinking excessively, and stop serving anyone who appears visibly intoxicated
- One surefire way of regulating how much each employee drinks is to provide employees with drink tickets as the only way to obtain alcohol
- Encourage employees to use designated drivers and provide alternative forms of transportation, such as free taxis
A little preparation and thought beforehand can make your business social event less "eventful" in a negative way, and may even save someone's life.
Questions for Your Attorney
- What are the advantages and disadvantages of having a holiday party?
- Would an employer be liable if an employee gets in a car accident after leaving an employer event that served alcohol?
- Who's liable if an employee gives alcohol to his child at an employer event for employees and their families?