Seyfarth Synopsis: Is the glass half full (of perks) or half empty (with liabilities) for employers who serve alcohol in the workplace? Various California laws implicate the practice of providing alcohol for employees at work, and employers should consider whether the benefits to company culture justify the legal risks.

Many California workplaces try to make the office a “happy place” where employees want to linger, both to work and to play. To that end, many employers offer employees perks such as free food, games, free dry-cleaning, hip lounges, neck massages, and yes, even alcohol. Employers embracing this approach do so to reward employees for long hours, to encourage longer hours, and  to create a collegial or creative workplace. But are these perks really worth it? What potential legal risks arise in a euphorically boozy workplace?

I’m an Alcoholic!

The Fair Employment and Housing Act (applying to California employers with five or more employees) treats alcoholism as a disability. California liberally defines protected “disability” to include impairments that only “limit” (rather than “substantially limit”) the ability to work. And the Family Rights Act  entitles employees to up to 12 weeks of job-protected leave for alcohol-related disabilities. After the 12 weeks, extended leaves of absence can be a further, reasonable accommodation under both California and federal law.

Employers may also have to accommodate alcoholic employees when they return to (or remain in) the workplace. What if an alcoholic employee presents a doctor’s note requesting non-exposure to alcoholic temptations at work? Could that request ruin the weekly drinking games and force the employer to go dry?  Employers also need to be alert for co-workers’ teasing, taunting, or retaliating against an employee with the disability of alcoholism.

It’s Against My Religion!

Some religions expect their adherents to abstain from alcohol. Employers that encourage alcohol consumption by making it readily available in the workplace might thus prompt complaints by employees who feel excluded, segregated, or discriminated against for their non-participation in alcoholic activities. Both California and federal law protect employees from being treated differently based on one’s religion, or from being a target of offensive remarks on the basis of religious beliefs or practices, such as abstaining from alcohol. Employers should be attentive to employees’ religious needs and be vigilant in listening for complaints about employees being uncomfortable with alcohol in the workplace.

Ouch! I’m Hurt!

Personal injuries stemming from workplace drinking can create employer liability. Will worker’s compensation cover alcohol-related injuries? Maybe, if the accident happened during regular business hours or in the course and scope of employment. But employers run an additional risk of tort liability for injuries that follow employer-sponsored alcoholic events and that occur after working hours and off employer premises.

I’m Only 19!

Many employees have not reached the legal-drinking age. Considerations should include how to prevent underage drinking, as furnishing alcohol to a minor can trigger both civil and criminal penalties. This risk may be difficult to manage in a workplace with a refrigerator stocked with tempting adult beverages, free for the taking.

I’ve Been Sexually Harassed!

Some call alcohol “liquid courage,” and for a reason: it can result in loose lips and wandering hands. Although employers may escape liability for sexual harassment by co-workers if they didn’t know (or had no reason to know) of bad behavior, and if they promptly investigate and remedy any harassment brought to their attention, California employers are still strictly liable for supervisor harassment. Because work-related gatherings with alcohol around are potential trouble spots, employers must be watchful for inappropriate conduct.

Proposed Workplace Solution.  

As companies continue to pursue innovative ways to attract, reward, and retain employees, employers that add alcohol to the workplace mix should be aware of the potential criminal and civil liabilities associated with tapping kegs at the office. Company policies that clearly address issues of harassment, discrimination, and retaliation are a must, and other policies should address company expectations around employees’ consumption of alcohol and their behavior in the workplace.

Food (or drink) for thought.