Although it’s still summer, it’s never too early to start thinking about the annual company holiday party — the food, the conversation, the alcohol — and the liability that can flow from it. In Purton v. Marriott International, Inc., a California appellate court recently held that Marriott could be liable for a drunk driving accident following its annual holiday party.

The Marriott Del Mar Hotel held its annual holiday party in December 2009 as a thank you to employees and to foster camaraderie among its workforce. It planned on serving only beer and wine and providing employees with two drink tickets. However, hotel managers served hard alcohol at the party to certain employees, including employee and off duty bartender Michael Landri. Before arriving at the party, Landri drank one beer and a shot of liquor. He also brought a flask of liquor to the party, which was refilled by hotel managers who shared shots with him and other employees.

After about three hours at the party, a co-worker drove Landri home. He arrived home safely, but after about twenty minutes Landri decided to drive a co-worker home who had become intoxicated. (The implication is that Landri drove the co-worker from his house to the individual’s home, but it is unclear based on the court’s statement of the facts whether he might actually have returned to the party to drive the co-worker home.) While doing so, Landri rear-ended another car at 100 miles per hour, killing the driver. Landri’s blood alcohol level was .16 at the time of the accident, twice the legal limit in California. He received a six-year prison sentence for gross vehicular manslaughter while under the influence.

The deceased driver’s parents sued both Landri and Marriott for wrongful death of their son. Marriott argued that it was not liable for the accident because it did not occur within the scope of Landri’s employment, and the trial court granted summary judgment in its favor. The appellate court reversed, however, holding that Marriott could be liable because the proximate cause of the injury (i.e., Landri’s intoxication) occurred within the scope of employment. Vicarious liability of the employer attaches if the activities that caused the employee to become an “instrumentality of danger to others” were (1) done with the employer’s permission and benefitted the employer or (2) constituted a “customary incident of employment.”

Here, the court found both. First, Marriott served alcohol (including hard liquor) to Landri at a party to thank its employees and encourage relationship building, from which Marriott arguably received the tangential benefit of increased employee morale. Second, drinking alcohol was a customary incident of employment since some of the employees at the party (including Landri) were bartenders and were regularly allowed to drink leftover alcohol from parties, taste new drinks, and have drinks purchased for them while at work. Marriott’s argument that its liability ended when Landri arrived safely at home and did not extend to when he later decided to drive a co-worker home was unconvincing, as the court stated: “no legal justification exists for terminating the employer’s liability … simply because the employee arrived home safely from the employer hosted party.”

This case is a cautionary tale for employers about the hazards of unregulated alcohol consumption at company parties. The court noted that Marriott could have reduced its risk of liability by having a policy against smuggled alcohol (i.e., Landri’s flask), enforcing its drink ticket policy, serving drinks for a limited time, or prohibiting alcohol altogether.