Issue 129 – November 2022
To Serve Alcohol or Not to Serve Alcohol, that is the QuestionBy Senior Risk Manager Maria Galvan and Senior Risk Manager Alex Mellor
With the holidays approaching, many members are preparing for holiday or end-of-year employee recognition parties. The question of whether to serve alcohol should be carefully evaluated. The consumption of alcohol at workplace parties may encourage inappropriate behavior, which can lead to liability or workers’ compensation claims from employees or claims from third parties due to incidents occurring during or after the event.
Employers (including local government agencies) may be liable for incidents arising out of workplace parties where alcohol is served. Courts evaluate different factors when deciding whether an employer is liable for an employee involved in an accident due to consuming alcohol at an employer’s function. Factors may include whether employees were required to attend, where the event was held, if guests were invited, whether employer business was discussed, and if the event was sponsored or planned by the employer or organized independently by employees.
In the 2013 ruling of Purton v. Marriott International, Inc., the California Fourth District Court of Appeal held the employer liable for a death caused by an employee who became intoxicated at a workplace party. The employee arrived home safely but left to drive a co-worker home. The employee then hit another car, killing its driver. The trial court granted summary judgment in favor of the employer because liability under the doctrine of respondeat superior ended when the employee arrived home. However, the appellate court reversed the decision and sent the case back for trial. The appellate court found that because the party benefited the employer by improving employee morale, the employer should be liable for the accident because the proximate cause of the injury (alcohol consumption at the party) occurred within the scope of employment.
The only way to avoid liability arising from serving alcohol at a workplace party is not to serve alcohol. However, if your agency does decide to serve alcohol, the following steps are recommended to minimize liability:
- Ensure that harassment prevention training has recently been provided and training records are up to date. Review your agency’s discrimination, harassment, retaliation prevention, and substance abuse policies before the event. Consider policies making clear that excessive consumption of alcohol at agency functions will not be tolerated. Policies may include specific examples of conduct that will not be permitted. If your agency’s policies do not address workplace social events, consider updating them accordingly. Also, remind employees about the dangers and consequences of drinking and driving. Policies should be communicated using various methods: email, paycheck stub memos, bulletin boards, meetings, etc. Signed acknowledgments of receipt and understanding of policies by employees should be obtained.
- Make clear to employees that attendance at agency social events is strictly voluntary and not a requirement of employment. This suggestion applies to whether or not alcohol is served.
- Limit the amount and types of alcohol to be served. For example, consider having a cash bar or providing a limited number of drink tickets per person. Sweet alcoholic drinks or punches make it difficult for an individual to know how much they have consumed. In addition, serve plenty of non-alcoholic beverages such as water, sodas, and juices.
- Close the bar one or two hours before the event is over and continue to serve food.
- Hold the event off agency premises at an establishment with professional bartenders and a valid liquor license. Professional bartenders know how to deal with guests consuming alcohol in excess. When hiring professional bartenders or caterers, ensure they carry appropriate general liability and liquor liability insurance. Do not allow employees to serve drinks to co-workers.
- Since workplace parties are typically social, limit the discussion of business and hold the event outside of business hours.
- Consider allowing family and significant others to attend. Inviting guests implies the event is social rather than business-related. In addition, employees are likely to be more reserved and less inclined to participate in offensive behavior. However, if customers or business partners are invited, the function is apt to be viewed as a business event.
- If inviting minor guests, do not serve alcohol.
- Do not allow employees to bring alcohol to an agency event.
- Provide alternative transportation (such as rideshare services) for employees leaving workplace parties where alcohol is served. Encourage employees to have a designated driver.
- Consider scheduling the party earlier in the day so employees are less inclined to drink excessively.
- Do not require non-exempt employees to perform functions at agency social events. This can help to avoid wage and hour claims.
Opinions vary about the wisdom of serving alcohol at workplace parties. Consult legal counsel for advice on your specific situation.
If you have questions, please contact your regional risk manager.< Back to Full Issue Print Article