How to Reduce Your Liability during Company Holiday Party

If you’re throwing your staff a Christmas party this year, don’t forget that holiday soirees also mean increased liability for workers’ comp, harassment and third-party injuries.

For example, did you know that if one of your staff is injured at your holiday party it could trigger a workers’ comp claim, since it could be considered “within the course and scope of employment”?

Workers’ comp and employment law attorneys have different opinions about this, but the overriding consensus is that some of it could become a workers’ comp claim if:

• Attendance is mandatory, regardless of whether it’s expressed or implied.
• The party is held during working hours.
• The event is held on your premises.
• Employees are recognized with rewards, or if you give out bonuses at the event.
• The event includes vendors or customers.

The rules for this can vary depending on the state and how broadly the courts define “scope of employment.”

For example, in Minnesota three years ago, an employee had been out on medical leave for a non-work-related injury, and she went to the company’s annual dinner after she received an invitation and the promise of a turkey.

After she had collected her turkey, however, she slipped, fell and injured herself in the parking lot. The state supreme court found that the employer had directed the employee to come to the premises to obtain the turkey, which the court noted was a form of bonus compensation.

In California, all company-sponsored events fall within the course and scope of employment, because they benefit the employer by improving employee morale and furthering employer-employee relations.

But the biggest issue is liability, and a case in 2013 should make you think twice before serving alcohol – or even allowing your staff to bring their own booze.

In the case of Purton vs. Marriott International, Inc. the California Supreme Court found the employer, hotel chain Marriott, liable for the actions of an employee who took his own liquor to a company party, drove home drunk and killed another motorist.

The court found that as long as the proximate cause (intoxication) was within the course and scope of employment, the employer could be liable.

Here are 10 tips to help ensure that cheer does not turn into a legal nightmare:

1. Attendance must be voluntary. To make sure that your employees understand this, clearly state it in the invitation and any announcements you may post about the party in your workplace.
2. Hold your event after working hours and at a venue other than your office. This reduces the likelihood the party will be perceived as work related.
3. Also, don’t try to coax employees to come by implying that attendance can help them advance their careers or standing in the office, or that not coming would be viewed by other staff as the employee not being a team player.
4. Don’t give out awards, bonuses or any types of recognition that would indicate that they are there for business reasons.
5. Strongly consider NOT inviting vendors, customers or others with whom your company conducts business.
6. Tell your employees that they can bring their spouses and significant others.
7. Remind employees that normal workplace standards of conduct are to be respected. Remember, when alcohol is served at parties, it may reduce inhibitions and can lead to sexual harassment or discrimination claims.
   If you do receive a complaint about discrimination or harassment, don’t shrug it off. Take it seriously and conduct a proper investigation and interview the employee complaining, the one who is accused and any witnesses.
8. If you want to truly reduce your risk, you should limit or not serve alcohol. Whatever you do, don’t have an open bar. Close the bar at least one hour before the end of the party. Also, hire a professional bartender who knows when to cut people off.
   Arrange for no-cost transportation for any employee who should not drive home. If you do plan to have alcohol, also serve plenty of food.
9. Tell employees not to post pictures from or comments about your company party on social media without a policy in place.
10. Discuss your exposure with us to make sure that you are properly covered for any liabilities that may arise out of the function. Call us! We are always here to help.