How to Reduce Employer Liability at Holiday Parties

Employers Need to Deemphasize Alcohol at Work Events. Paul Bradbury/Caiaimage/Getty Images

The increased recognition that alcohol consumption at organization-sponsored events creates significant legal liability has had an impact on that traditional institution, the company holiday party – but this impact is not necessarily pervasive or severe.

In an extensive 2015 survey of employers, the Society for Human Resource Management (SHRM) found that a majority of organizations (59%) planned to serve alcohol at their holiday or end-of-year parties.

And only half of these employers (47%) said they would seek to regulate alcohol consumption through methods such as:

  • providing drink tickets or a drink maximum (71% of respondents in this category),
  • serving only certain types of alcohol (25%),
  • having a cash bar (18%), or
  • other (11%).

Moreover, the SHRM 2012 survey found that, year-round, a third of organizations (33%) have either a formal or informal policy that allows drinking alcohol at work-related events.

Companies schedule and plan holiday parties with the best of intentions, to reward their employees, boost morale and encourage team spirit. But these gatherings, especially when alcohol is served, can turn into an environment for unwanted sexual advances and potentially illegal employee conduct.

That is especially the case when the holiday party is held at an offsite location (which, according to the SHRM 2015 survey, is the case in nearly 67% of such functions).

  In a social setting outside the workplace, an employee whose inhibitions are lowered by alcohol consumption can engage in behavior that would never be considered on the job.

From Harassment to Fatalities

Holiday parties often bring more than just intoxicated high jinks. Being merry can sometimes mean crossing the line, ranging from offending a coworker to violating the law.

Moreover, in today’s real-time social media environment, drunken shenanigans at a holiday party can quickly be posted online for the whole world to see.

Reminding employees that respect and professionalism apply not only on work time but also at company sponsored events like office parties, and establishing social media policies that prohibit employees from posting photographs or video without management permission are good initial steps, but far more needs to be done to deal with more serious legal issues.

Employees are protected from sexual harassment and discrimination by Title VII of the Civil Rights Act of 1964, which covers employers having 15 or more employees (including regular part-time ones).  Title VII provides two requirements for conduct to trigger potential liability for unlawful harassment:

  • The conduct must be unwelcome; and
  • The conduct must be sufficiently severe or pervasive.

it need not be both.  Conduct is not illegal simply because it is inappropriate or makes someone feel uncomfortable.  However, even a single, extremely serious incident of harassment may be sufficient to constitute a Title VII violation, especially if the harassment is physical.

So, if an office party incident follows previous incidents of misconduct, it could constitute the evidence necessary to reach the “severe” or “pervasive” threshold, laying the foundation for a Title VII claim.

A second major legal liability is created by drunk driving following an employer-sponsored holiday party.  In a 2013 decision that received substantial publicity, a California appellate court reversed the trial court’s grant of summary judgment for the employer and found that an employee who consumed alcohol at a company-sponsored event and, after leaving, struck another car and killed the driver created liability for the employer.

“It is irrelevant that foreseeable effects of the employee's negligent conduct (here, the car accident) occurred at a time the employee was no longer acting within the scope of his or her employment,” the court ruled.

Proactive Steps to Consider

Given such legal risks, prudent employers should take proactive steps to lessen their litigation liability.  Key examples to consider include:

  • Have in place comprehensive, written anti-harassment policies, clearly stated in employee handbooks – and publicize that policy prior to the holiday party.
  • Send a memo reminding employees to act responsibly at the party, clearly expressing a lack of tolerance for inappropriate behavior.
  • Enforce the workplace dress code at the party to avoid any inappropriate or suggestive attire.
  • Make attendance at the party voluntary, and do not suggest that attendance will benefit a person’s standing within the company.
  • If alcohol is served, set a tone of moderation in advance through interoffice memos, emails, meetings, inserts into paychecks or other communications, and stress that excessive alcohol consumption will not be tolerated.
  • Limit the number of drinks or the length of time during which alcohol will be served, and provide substantial non-alcoholic alternatives.

Such steps are not a guarantee against holiday party problems, particularly if the decision is made to serve alcohol.  But they can be an employer’s foundation for an effective defense against liability if problems happen.


  1. 2015 SHRM Holiday Activities Results