December 08, 2017

Holiday Party Liability: Cases on Social Host Liability, Office Party Suits, and More

Ursula Furi-Perry

This article is excerpted from The Little Book of Holiday Law. by Ursula Furi-Perry, published by the American Bar Association © 2013.  

Most companies love to throw a good party for their employees—whether it’s to increase camaraderie, convey a sense of appreciation, take stock in the employer’s progress through the year, or just get together to celebrate something good.

As one author writes:

[W]hile there are many good reasons to throw a holiday party for your customers and employees, surprising antics can occur as the office team relaxes at the event. Take, for instance, the corporate executive who mooned his staff, much to their dismay. No buts about it—that just wasn’t a good act. We caution you to make sure your happy events don’t become a breeding ground for two specific legal liabilities: sexual harassment and DUI-related accidents.

Jennifer S. Kessler, Ho! Ho! Uh-Oh! The Perils of Office Holiday Parties, in 19 Virginia Employment Law Letter 1 (2007).

The author goes on to note that many sexual harassment suits are the result of advances at office parties between coworkers, and cites to a Lawyers.com survey sponsored by LexisNexis, according to which “29 percent of adults have observed or experienced sexual advances at office parties between people who work together.” Id.

To help avoid sexual harassment lawsuits, the author provides the following tips:

Beware of employees engaged in inappropriate touching. A single incident can be an actionable event under Title VII of the Civil Rights Act of 1964 if it’s serious enough.

Watch the behavior between your employees and any clients or customers. If a client makes an inappropriate advance toward an employee, your company may be liable, particularly if the employee feels pressured to make the client “comfortable” or “happy” and acquiesces to his demands.

You need to watch both men and women. In [one] case, a male employee filed a sexual harassment claim in federal court after his female supervisor harassed him at two holiday parties. At the first party, the supervisor attempted to kiss the employee under the mistletoe and force him to dance with her. She commented, “[I]f it was this difficult to get you on the dance floor, how difficult would it be for me to take you home?” At the second party, she followed him around, making suggestive faces, the entire evening.

How spouses and guests of your employees are treated is also your concern, albeit not necessarily from a legal standpoint. Even though an employee’s spouse can’t sue the company for harassment, the fact that the incident occurred at an office party can cause problems in the workplace from friction between the employees involved. Id.

Then there is the issue of liability for the acts of employees. Even though a party host may not be liable for the behavior of a guest, as an employer, you may be liable for the behavior of an employee who is acting within the scope of his employment, the author warns.

Whether attending a company holiday party is “within the scope of employment” varies on a case-by-case basis. If attendance is mandatory, a court will probably find employees to be acting within the scope of their employment. If attendance isn’t technically mandatory but there’s a strong expectation that all employees will or should attend, a court may infer that attendance was expected and thus find employees to be acting within the scope of their employment. Id.

In addition, the courts might consider whether the party was held at the employer’s workplace premises, and whether it was during work hours. If the injuries result from the actions of an inebriated employee, the court will also consider whether drinking was a part of the employee’s work duties. “If a court determines that attendance at the holiday party was within the scope of an employee’s employment, then it will most likely hold the employer vicariously liable for the actions of an inebriated employee.” Id.

The author cites to two Virginia cases. In the first, an employer hosted an office holiday party on its premises, and two employees drank at the party until they became intoxicated. After leaving in separate cars, the two employees collided and injured a passenger, who filed a negligence claim against the employer. The court held that while the employer wasn’t liable under the theory of social host liability, it was potentially liable under respondeat superior. Id., citing to Sayles v. Ford Motor Co. In the second case, an employee was struck and killed by another employee while leaving an office holiday party. Though attendance at the party technically wasn’t mandatory, the employer permitted its workers to leave early the day of the party and strongly encouraged employees to attend with their families; attendance was almost universal. Applying respondeat superior, the court found the employer liable, holding that the party was closely connected and associated with employment. Id., citing to Kim v. Sportswear.

Some courts have declined to hold employers responsible in these situations. In one Wisconsin case, a manager and coworker attended a company-sponsored holiday party. The coworker became intoxicated, and the bartender asked him if he had a ride home. Overhearing the conversation, the manager agreed to drive him home, but he left the party without the coworker. The coworker attempted to drive home, crossed into oncoming traffic, and was killed along with the driver of another vehicle. That driver’s estate sued the manager and the company.

The lower courts found that the manager had volunteered to take the intoxicated coworker home, and that a jury could reasonably infer that the manager was negligent in leaving the coworker at the party. In a separate decision, the appeals court held that the employer could be held responsible if the manager acted within the scope of his duties when he agreed to drive the coworker home.

The Wisconsin Supreme Court disagreed, however, refusing to hold the manager liable based on public policy factors. “The court found that the injuries sustained in the case were completely out of proportion to any wrongdoing by [the manager]” explains an article detailing the case. “It also concluded that to allow him to be potentially liable for damages under the circumstances of the case would allow the law to enter a field that has no sensible or just stopping point.” Michael J. Modi, Broken Promises: Wisconsin Supreme Court Decides Holiday Party Case, in 11 Wisconsin Employment Law Letter 1 (2002).

There is a special problem with alcohol at company parties: the problem of underage employees or guests. “They’re called ‘adult’ beverages for a good reason,” notes one author. “Is your company planning to have a holiday party for employees and their guests? If so, you’d better know the age of all in attendance and take precautions to ensure that no one underage drinks alcoholic beverages.” Gayla McSwain, The Holiday Party—Beware, in 16 South Carolina Employment Law Letter 1 (2007).

Some states will hold the employer liable for injuries suffered as a result of underage drinking. As an example, the aforementioned author cites to two South Carolina cases: the first one involved a holiday cookout for business acquaintances at the home of an employee, at which a 19-year-old was allowed to drink alcohol, then was later killed in a single-car accident while driving home; the second involved another 19-year-old guest at a work-related holiday party who was served alcohol by the bartender and was killed in a two-car accident while driving home.

The article offers some helpful suggestions to control the serving of alcoholic beverages during company-sponsored parties:

  • Limit the number of drinks served by requiring tickets or some other means to limit access.
  • Before the function, encourage the use of designated drivers. Serve plenty of food.
  • Think about limiting the length of the function because the longer people are at a party, the greater the chance for them to drink more.
  • Always consider having alternative transportation available so that each person who attends has a safe way home at the end of the function. Id.

Reprinted with permission from The Little Book of Holiday Law, available for purchase from shopaba.org 2013© by the American Bar Association. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

Ursula Furi-Perry

Ursula Furi-Perry is author of many books and is director of Academic Support and director of Bar Essay Writing at the Massachusetts School of Law at Andover.