The much-anticipated office holiday parties are just around the corner, but with the fun and merriment come many liability issues for employers. From impaired driving accidents to sexual harassment charges or worker's compensation claims, events involving over-the-top revelry can expose employers to serious risk. When planning your company holiday function this year, be sure to take precautions to minimize your risks.

In some states, an employer can be vicariously liable if alcohol was either purchased with company funds or if the employee who provided it did so within the scope of his employment. Having employees purchase their own alcohol and hiring someone from outside the company to distribute it—by hiring a bartender or having the party at a restaurant—can significantly reduce liability. An example is a case in which an intoxicated employee got into an automobile accident following a company holiday party that was held at a local restaurant with a cash bar. A court held that the employer was not liable for the injury because the employer did not furnish or pay for the alcohol, and there was nothing to show that the employer had any control over the manner in which the restaurant performed the bartending duties. Mosko v. Raytheon Co., 416 Mass. 395, 403 (1993). Putting alcohol distribution in the hands of a professional, however, will not necessarily make the evening risk-free.

A social host can be liable if he serves alcoholic beverages to a person he knows (or should know) is under the influence of alcohol, and he knows that the person who is under the influence of alcohol will shortly thereafter drive an automobile. Employers have an even greater responsibility than private social hosts because they have control over the conduct of their employees in a way social hosts do not have over a guest. Employers should therefore take reasonable steps to continue to control the conduct of employees. Even if he does not provide the alcohol, the employer who knows—or reasonably should know—that employees became intoxicated on work premises or at a company function should take reasonable steps to prevent the employee from operating a motor vehicle.

Employers should also be aware that office holiday parties can be the scene of unwanted romantic overtures that result in Equal Employment Opportunity (EEO) charges or lawsuits. As always, care should be taken to make sure inappropriate conduct does not occur.

It is important that employers not require attendance at holiday parties and that they manage the pressure to attend. Mandatory attendance at functions can result in workers' compensation claims if an attending employee is injured. The reason is that the employee will be considered to have been acting in the course of employment. Even if a company-sponsored party is technically not mandatory, if "the degree of expectation from the employer that all employees would attend" is high enough, then a close correlation between the social activity and the employment is apparent and a court may infer that attendance was expected of all employees. Kim v. Sportswear, 10 Va. App. 460, 466 (1990).

The timing of the event is also very important. If the party is held during normal working hours, then employees may be considered to be attending within the course of employment. In determining whether the party was within the course of employment, the courts examine the extent to which the employer expects or requires employees to attend, the degree to which the employer benefits from the activity, the degree of sponsorship or participation by the employer, whether the activity takes place on the employer's premises, when the activity occurs in relation to work and the frequency of the activity. Several courts have recognized that an employee's voluntary attendance at a social event sponsored by his employer off the employer's premises and outside of normal working hours cannot reasonably be viewed as conduct within the scope of his employment. Similarly, an employer likely will not be legally responsible for what employees choose to do socially when off-duty and off work premises. A court held that where there was no evidence that it was sponsored or supervised by the employer, a party was not a work-sponsored event even if the employer was aware of it. Even though the attendees were all from the same office, because the party was not held at the employer's place of business, was not during normal working hours and the employer did not furnish any of the refreshments, it was viewed to be a private party. Oslin v. State, 543 N.W.2d 408, 414 (Minn. App. 1996).

To help make your company holiday event festive while reducing your liability, keep the following tips in mind:

  • Make it clear to employees that holiday parties are purely optional and their attendance is not required.
  • Brainstorm ways to celebrate the holiday season that do not involve alcohol. An office breakfast party, group volunteer activity or tickets to a special event are great ways to let your employees know you care.
  • Review and update your company's harassment and substance abuse policies, and see that updated copies are distributed and posted in the workplace. Make sure all employees are aware that these policies apply not only to work-related situations, but also to office social functions, even if they are not on work premises.
  • Before the party, take time to remind employees about company policies and emphasize that they are welcome to have a good time, but are expected to act responsibly.
  • Plan a creative, non-alcoholic company holiday party, where the focus is on fun activities and group bonding rather than alcohol. Spend the money you'll save on door prizes, games or better food. However, be sure employees know they are not to bring alcohol to the event, even as a gift or donation.
  • If your company is having a more traditional party with alcohol, be certain to provide a variety of non-alcoholic beverages and plenty of food. Avoid serving greasy, salty or sweet foods, which tend to make people thirsty, and serve foods rich in starch and protein instead, as they slow the absorption of alcohol into the bloodstream.
  • A cash bar or ticket system are good alternatives to an open bar, as they tend to reduce the amount of alcohol consumed by employees.
  • Have the party at a restaurant or hire outside help, so that professional wait staff or bartenders are serving the alcohol rather than employees or other company personnel. Make sure that alcohol service is stopped well before the end of the event.
  • Remind managers that it is their responsibility to keep an eye on employees at the office party, even though it is not technically work time.
  • Managers should be familiar with the harassment and substance abuse policies so they can enforce them if necessary.
  • Discuss transportation ahead of time with employees and encourage them to coordinate rides with designated drivers or, better yet, arrange for taxis and other transportation.

Consider making the holiday party a family event or, at a minimum, invite employees' spouses and significant others. This tends to reduce alcohol intake as well.Taking a little extra care in planning by considering these suggestions can help make your office function safe and happy. For tools on effectively addressing drug and alcohol problems in the workplace, see the U.S. Department of Labor's Working Partners initiative at