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Don't Let Your Company Holiday Party Become a Liability

November 2019

CSG Labor & Employment Alert

Some say it’s the most wonderful time of the year. Others are business owners or HR professionals who experience great stress at year-end due to, among other things, the company holiday party. Although the annual holiday party may be viewed as a nice thing to do for employees to both demonstrate appreciation for their efforts over the year and to give employees the chance to unwind and celebrate with colleagues, such parties also expose employers to potential legal liability for allegations of harassment and discrimination, as well as for accidents and injuries. In addition, such well-intended celebrations may cause employee frustration over things such as feeling or even being obligated to attend a work function on off-time, having to incur costs of childcare to do so, and preferring the employer demonstrate employee appreciation through a monetary bonus rather than a party.

Here are several tips for employers to implement in order to host an event that boosts employee morale while minimizing legal liability.

Control Alcohol Consumption

Unsurprisingly, most complaints arising from company parties involve alcohol. After a few drinks, inhibitions are lowered, which may result in employees engaging in conduct or comments that are unacceptable for the workplace. Remember, even if your event occurs offsite, that does not insulate the company from a claim of workplace misconduct. Limiting or even entirely eliminating the alcohol served at a company party may reduce the risk of employees behaving inappropriately. If you are going to include alcohol at your party, consider the following options to control consumption:

  • Hold the party on a weeknight or during the afternoon, as opposed to having a nighttime or weekend event.
  • Hold the event offsite for insurance and liability purposes.
  • Hire professional bartenders who are trained to identify intoxicated guests and will refuse to serve them. Do not have a self-serve bar where employees help themselves to drinks without supervision.
  • Limit the total number of drinks served to each employee by issuing drink tickets or making it a cash bar.
  • Limit the type of alcohol served. Consider only serving beer and wine as opposed to spirits. Prohibit shots from being served.
  • Just as is done in many sports stadiums, stop serving alcohol for a period of time before the party ends so that employees are not drinking alcohol until the very end of the party.
  • Provide plenty of non-alcoholic drink options.
  • Designate certain employees to monitor employee alcohol consumption and task them with ensuring no intoxicated employees drive home.
  • Provide safe transportation at the company’s expense for any potentially intoxicated employees, including shuttles, taxis, Ubers, Lyfts or other designated drivers. The costs of the potential legal liability in permitting an intoxicated employee to drive are far greater than any taxi fare.
  • Have food available at all times so employees do not drink on an empty stomach.

Clarify Expectations Of Appropriate Workplace Behavior

More poor behavior occurs at company holiday parties than at any other time of year. Thus, in advance of the party, circulate a memorandum to all employees reminding them to act professionally at the upcoming event and provide tips to do so, such as limiting alcohol consumption, dressing appropriately, specifying that the company is not sponsoring any after-party, and discouraging gift exchanging at the party.

It is crucial to remind employees that, even if the party is offsite and not during working hours, employees are still obligated to comply with the company’s anti-harassment policies and will be subject to discipline if they violate these policies or act inappropriately during the event. As a further precaution, recirculate the company’s anti-harassment policy to all employees prior to the party and remind supervisors that they have an obligation to report any violations of policy. If the company has not provided employees with anti-harassment training recently, now is a great time to do so.

Take Precautions To Reduce Risk Of Liability

Take steps when planning the party to avoid triggers for bad behavior. For example, do not have Santa Claus visit and invite employees to sit on his lap, and best not to have any mistletoe. Also consider eliminating music or a dancefloor to prevent close contact where inappropriate touching may occur. If the budget permits, invite significant others or families to the event as this may encourage employees to remain on their best behavior.

Keep the theme and décor for the party non-religious. Rather than calling it a “holiday” party, consider making it an “End of Year Party,” a “Winter Social,” or a “Snowy Soiree.” Eliminate any religious symbolism in order to prevent employees who do not celebrate these holidays or share particular religious beliefs from feeling excluded or alleging discrimination. You can still be festive, just stick to winter themes and décor to avoid offending or excluding any employees.

If the party is held after working hours, attendance must be voluntary and all work related business excluded so the employer does not run afoul of wage and hour laws that may require payment to non-exempt employees for their attendance. Make the invitation clear that employees may opt out without penalty or any negative connotation.

Show Appreciation By Giving Employees What They Want

When planning your event, it is worthwhile to get input from your employees to better understand their preferences. Perhaps it is no party at all, or a low-key holiday luncheon rather than an after-hours event, or maybe everyone loves a nighttime event, but they have suggestions for what should be involved in that celebration. While you will never get a unanimous consensus or be able to satisfy everyone, asking for input from employees will make them feel more included.

Perhaps scrap the holiday party altogether for less risky alternatives such as attending sporting events, bowling, or painting parties. Team building and community service projects are also popular alternatives. Another option is to take the holiday party budget and give it back to employees in the form of a year-end bonus or extra paid time off, particularly if employees have stated this as their preference.

Although it will be impossible for an employer to completely avoid the risks associated with a holiday party, by implementing these tips, employers can minimize those risks and provide their employees with a safe and happy celebration. However, should a problem arise, it is critical that employers take every complaint seriously and promptly conduct a thorough investigation.

For more information on this topic, please contact your CSG attorney or the authors listed below.

Melissa A. Salimbene | Member | msalimbene@csglaw.com | (973) 530-2092

Lindsay A. Dischley | Counsel | ldischley@csglaw.com | (973) 530-2110