Holiday Party Liability Prevention Checklist: Best Practices For Employers

Posted on 11-18-2017 by
Tags: labor and employment , human resources , holidays , checklist , holiday party liability


By: Lexis Practice Advisor Team

This checklist provides best practices and considerations for private employers when hosting holiday parties for their employees. While there are benefits to holiday parties, such as employee camaraderie and improved morale, there is also a significant risk of inappropriate behavior. Such behaviors can negate the advantages of the event and lead to employer liability. This checklist addresses concerns that are common to most jurisdictions but does not cover all potential state and local law distinctions.

Take Steps to Prevent Sexual Harassment

One of the most significant risks of a holiday party is an employee making inappropriate physical advances upon his or her co-workers. An employee on the receiving end of these advances could pursue a claim for sexual harassment. Taking the below steps will help to ensure the holiday party does not subject the employer to liability.

  • Ensure Human Resources policies cover the holiday event. Consider adding specific references to employer-sponsored social events in any company harassment and code of conduct policies. Such policies should provide employees with guidance on how to behave themselves at social work functions and put employees on notice that the holiday party is still intended to be a professional environment.
  • Avoid venues and activities that encourage harassment or inappropriate conduct. The employer should not encourage any activities that could invite unwanted physical advances (e.g., hanging a mistletoe or providing a Twister board) or hold the party in a risqué venue 
  • Allow guests to attend the event. If significant others, family members, or even clients attend the event, employees are more likely to understand the importance of acting in a professional manner. Any added cost from permitting additional guests may be offset by avoiding a harassment claim.
  • Investigate claims of inappropriate conduct and take corrective action. If an employee alleges that he or she was treated inappropriately during the holiday party, the employer should conduct a prompt and thorough investigation. If the investigation reveals that one or more employees acted inappropriately, the employer should discipline those employees in accordance with its policies.

Avoid Harms Created by Alcohol Consumption

Employee alcohol consumption is a common source of employer liability at holiday parties. Limiting and monitoring the service of alcohol allows the employer to minimize risk.

  • Have a third party serve alcohol. If the employer hires a bartender or holds the party off-site at a bar, restaurant, or similar establishment, the third party serving the alcohol may absorb any liability for injuries due to over-serving. Research your jurisdiction’s dram shop laws to determine the extent to which a third party would be held accountable. The employer should confirm that all servers are properly trained and that the third party maintains adequate liquor liability insurance.
  • Avoid serving underage attendees. If there will be individuals under the age of 21 at the holiday party, ensure that those attendees will not be served alcohol. Checking the identification of each attendee ordering a drink is effective but time-consuming. Other methods of verifying age include marking the back of the hand of any underage attendees, or giving each attendee a colored wrist band indicating whether the employee is of legal drinking age. Regardless of the system used, ensure that the servers understand and follow it.
  • Limit alcohol consumption. There are many steps the employer can take to limit the consumption of alcohol or even mitigate the effects of alcohol:
    • Schedule the party for earlier in the day, when it is less likely that attendees will drink to excess.
    • Provide food and non-alcoholic drinks. Eating food while drinking alcohol will lessen the intoxicating effects of alcohol.
    • Have a cash bar instead of an open bar. If attendees need to pay for drinks, they are more likely to curtail their drinking. 
    • If free alcoholic drinks will be provided, have a system in place that limits the number of drinks per person. For example, the employer could give each attendee two drink tickets when he or she arrives. When issuing drink tickets, however, the employer should take steps to prevent attendees from transferring drink tickets to one another to circumvent the limit.
    • Stop serving alcoholic drinks after a certain time, but continue to serve coffee and other non-alcoholic drinks.
  • Provide transportation and/or lodging. The employer should consider reimbursing employees for taxis or providing other alternate transportation to keep employees from driving under the influence of alcohol. If the party venue is far from where most employees live, the employer may wish to subsidize lodging so that employees do not have to drive home after drinking and late in the evening.
  • Stress the importance of responsible behavior and alcohol consumption. In the invitation and other correspondence related to the holiday party, the employer should state that the use of designated drivers is encouraged and all attendees should drink and behave responsibly. The employer should post similar language at the holiday party, near where drinks are served.
  • Instruct supervisors to be on their best behavior. The employer should encourage managers to lead by example by not consuming too much alcohol or acting in an unprofessional manner.

 Minimize Workers’ Compensation Liability

Depending upon state law and the applicable facts, an employee injured in connection with the holiday party may be able to pursue a workers’ compensation claim. Take the following steps to minimize the risk of liability.

  • Keep the holiday party separate from employees’ jobs. Generally, an employee is entitled to workers’ compensation where the injury arises out of his or her employment.  Thus, while the employer should be clear that it expects those employees who do attend the holiday party to behave professionally, it should neither encourage employees to attend the party nor suggest that the event is business-related. Holding the event off-site bolsters an employer’s assertion that the event is not job-related. See Torres v. Triangle Handbag Mfg. Co., 13 A.D.2d 559 (3d Dep’t 1961) (workers’ compensation awarded to employee who was assaulted at a Christmas party where the party “was a normal incident of claimant’s employment” and the assault took place on the employer’s premises).
  • Ensure venue or service providers are licensed. Licensed service providers are generally less likely than unlicensed providers to allow for conditions that could result in employee injuries and claims. Additionally, licensed providers may have insurance to cover any employee injuries. Confirm that the provider has insurance in place to limit the employer’s exposure.
  • Mitigate the risk of violent behavior. To reduce the risk of violent behavior at the holiday party, the first step is to limit alcohol consumption, as detailed above. In addition, the employer should consider including a statement in the invitation, and any other written materials about the event, that any threatening or violent behavior will not be tolerated. A cautious employer might consider hiring private security to monitor the party and intervene in the event of any employee violence.

Protect Against Discrimination Claims

While issues involving alcohol and harassment likely comprise the majority of claims resulting from employer-sponsored holiday parties, other difficulties may arise. One such difficulty—discrimination claims—are avoidable with proper planning.

  • Make the event non-denominational. The employer should remember when planning for and decorating the event that the attendees likely worship different religions. Ensure that the employer bills the event as a “holiday” party instead of a “Christmas” party and does not display any religious symbols (e.g., manger scenes). Doing so allows employees of all religious backgrounds to feel comfortable attending and guards against religious discrimination claims.
  • Consider the policies and accessibility of the selected venue. If the holiday party will be located at a private club, confirm that the club does not restrict membership based on religion, gender, or any other protected characteristic. Also, confirm that any off-site venue is accessible under the Americans with Disabilities Act to employees with disabilities.

Protect Against Wage and Hour Claims

Unless certain safeguards are in place, an employer may owe wages to non-exempt employees for time spent at the holiday party. Consider the following measures to minimize the threat of wage and hour claims.

  • Hold the event off-site and outside of regular working hours. If employees must travel to an off-site location after the workday ends, the event will appear and feel separate from work employees perform at the office and is less likely to be deemed working time.
  • Make the event voluntary. If the employer does not require or take attendance at the event, the time is less likely to be compensable.
  • Refrain from engaging in business. Distributing business-related awards or bonuses may suggest that the holiday party is “work time” and thus compensable. Similarly, the employer should avoid business-related speeches or events during the party.

Reduce the Risk of Social Media Abuse

The risks posed by a holiday party are magnified by social media, where embarrassing or inappropriate behavior can easily become public knowledge. However, an employer’s ability to regulate its employees’ social media use is limited by the National Labor Relations Act (NLRA), which prohibits employers from interfering with employees’ right to engage in concerted activity related to the terms and conditions of their employment. Consider the following measures to minimize the risk of social media abuse without running afoul of the NLRA.

  • Protect against inappropriate photographs and videos. Prohibiting the use of all smartphones during an on-site party, in addition to being difficult to enforce, would likely violate the NLRA, since employees can use smartphones to document the terms of their employment. On the other hand, if the holiday party takes place off-site, the employer has greater flexibility to regulate photographs or videos since doing so does not implicate the worksite. One option for employers (regardless of where the party occurs) is to ban its employees from taking and posting photographs and videos of their colleagues without their permission, which employers can justify as a means of protecting their employees’ privacy rights.
  • Request removal of any inappropriate posts. If an employee does post content from the event that is inappropriate or offensive, the employer may request that the employee or the social media site remove the post. Before making such a request, however, the employer should consider whether the post is protected under the NLRA because it concerns concerted activity regarding the terms or conditions of employment.
  • Obtain employee consent before posting photographs. The employer may wish to post a photograph of the holiday event on the company’s social media page. Before posting the photograph, the employer should obtain the consent of any photographed employee.
  • Use caution accessing an employee’s social media information. A social media post may provide useful information for an employer’s investigation into a complaint arising from the holiday party. However, the Stored Communications Act and social media password protection laws may limit the employer’s ability to gain access to an employee’s social media account. The employer should limit the investigation to publicly available information or obtain the employee’s permission before accessing the account.

For more information on social media policies and management, see the forms and practice notes available in Navigating Social Media.

Maintain Independent Contractor Status

An employer should not invite independent contractors to a holiday party as doing so is evidence that an independent contractor is misclassified and should be considered an employee. For more information on maintaining the non-employee status of independent contractors, see Checklist – Best Practices for Maintaining Independent Contractor Status.

Obtain Insurance Coverage

Before announcing the holiday party, the employer should review its insurance coverage with its insurance agent or broker to confirm that it covers any possible claims resulting from employee conduct at the event. The employer’s general liability policy may provide liquor liability coverage. Additionally, employment practices liability insurance (EPLI) may cover instances of sexual harassment or other inappropriate conduct by employees at the party. Depending upon the coverages in place, and any policy exclusions or limitations, it may also be prudent for the employer to take out a policy specific to the holiday party.

Research State and Local Law

The above recommendations are designed to alert the employer to potential issues and best practices for avoiding liabilities in connection with holiday parties. Some topics, such as liquor liability and workers’ compensation, can vary from state to state, so be mindful of any unique requirements in your jurisdiction.


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