You May Be Damned if Your Drunk Employee Leaves the Company Party and Kills Someone in a Car Accident.

Posted: September 27, 2011 in Lawsuits

The time of year is soon enough coming when employers hold holiday parties or open houses. It’s easy to get caught up in the spirit(s) of the season and to overdo it on the alcohol. Are you putting your firm at risk if an employee or guest drinks too much and causes an auto accident and injures himself or a third person? It depends (that catch-all lawyer answer).

There are a variety of options for employee parties, from providing the liquor yourself at the company premises, having a professional caterer on the premises, renting a function hall, or going to a bar or restaurant. Some of these are safer options than others.

The safest option is a bar or restaurant where the employees and guests are buying their own drinks (the employer could hand out bonus cash that day). Even if the company is picking up the tab, the risk is still low. The crucial issue is control of the liquor. If the restaurant wait staff is in control of serving, your risk of liability for an accident is low. Employers do not have a general duty to act as big brother or sister to employees, especially after work hours. That doesn’t mean that a manager should be forcing shots on employees, as even this safe option has logical limits.

Also generally safe would be to hire a professional caterer either at a function hall or your place of business. But there are a few more guidelines to follow. First, make sure that the caterer is reputable and that the staff has experience serving alcohol. Make sure that the caterer obtains the permits. Make sure that the caterer is properly insured, and get an indemnity agreement from the caterer. Also, find out the plan of service. For example, you would not want employees and guests to have free access to liquor; they must order drinks from trained staff which has the authority to refuse drinks to someone underage or visibly intoxicated. You also should not ignore if drinking is getting excessive, such as drinking games organized by an employee. Check with your own insurance agent to see what coverage you have if you do get sued (speaking with your insurance professional is always a good idea).

The biggest risk is when the employer provides the alcohol and serves the alcohol. This fully opens the door to liability if you over serve someone who causes an accident. Although this may be a money-saving option, I would advise against it. It’s very easy for employees to get carried away at these events, and you don’t want to be in a position of either being the wet blanket or worry about liability.

Of course, you should remind employees ahead of time to be responsible and to designate a driver. Better yet, if the company could possibly provide drivers or promise to reimburse cab fare, that’s all the better all the better. In addition to preventing liability, you should of course care about the well-being of employees and innocent third parties. You don’t want to be sued, and you don’t want your company name in the paper because your employee killed someone after a wild party. Also think about the devastating effect on morale if something happened.

A topic for another day is the risk of sexual harassment at firm parties (or even “date rape”, as was alleged in one case).

If you have any questions on dealing with liability issues for an open house or company party, call me at 617.338.7000. As always, the above is general information, not legal advice.

By Adam P. Whitney

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