With the holiday season upon us, many employers will begin making plans for holiday office parties. Often, alcohol will be served. If there is an alcohol-related accident following the party, is the employer at risk? The short answer is "yes."
Social Host Liability. The courts have increasingly held social hosts responsible for alcohol-related problems, such as auto accidents or property damage, which take place as a result of excessive alcohol being served. Employers are not immune from this responsibility. The "Exclusive Remedy" provision of the Workers' Disability Compensation Act usually shields employers from tort liability when an employee is injured in a work-related incident. This protection is not available, however, in most company party situations. An injury incurred in the pursuit of an activity, the major purpose of which is social or recreational, does not fall under workers' compensation coverage and its liability limitations. Accordingly, employers should take steps to minimize their risks in this area.
Are You Serving? Some employers avoid potential liability by making their holiday parties alcohol free. For example, a number of companies have moved to family-oriented affairs in which employees' children are invited, Santa Claus appears, and no alcohol is served.
Other employers minimize the liquor liability risk by holding the functions at a facility where the alcohol is served by a licensed third party. For example, some employers rent rooms at a restaurant or club where the alcohol is served by the restaurant or club.
Another effective approach used by some employers is to provide everything except the alcohol and utilize a cash bar. This further removes the employer from the act of providing the alcohol.
Whom Are You Serving? One step employers should always take is to ensure that minors are not being served alcohol. Courts are very likely to impose liability on the social host when the case involves the furnishing of alcoholic beverages to a minor. Michigan law specifically prohibits the serving of alcohol to minors, and social host liability has been imposed on private individuals who served alcohol to minors.
For example, in one case the social host at a wedding reception served alcohol to the plaintiffs' 19-year-old child. The child later became involved in a fatal automobile accident. The Michigan Supreme Court held that the social host was liable for serving the minor alcoholic beverages. In addition, the courts have said that the social host is not only liable where the injured party is the imbiber but also where the injured party is a third party injured by the imbiber.
If you have employees or guests under 21 who will be at holiday functions where alcohol will be served, it is very important to take some steps to ensure they will not be served alcohol.
Protective Steps. What if you have decided to hold a social function where you will serve alcohol? Are there protective steps you can take?
First, the employer would be wise to consider distributing free taxi passes permitting an employee to ride home that evening and back to work the next day in a cab. Second, the employer may reward employees driving with a sober designated driver through prizes or rewards. Third, an employer may limit the number of alcoholic beverages an employee consumes by providing each employee with a set number of tickets which are the only means of obtaining alcoholic beverages. Finally, a designated member of management may be called upon to "monitor" employee drinking and assist anyone who has a need for special transportation that evening.
Summary. The holidays should be a time of happiness. A tragic accident following a work/social function can cause great difficulties, not only from the legal liability standpoint, but also from its negative impact on morale. With some forethought, employers should be able to provide an enjoyable and safe evening for everyone, while at the same time effectively minimizing the risk of liquor liability.
If you have any questions regarding employer liability, or any other labor and employment matter, please feel free to contact any member of our Labor and Employment Practice Group.