Holiday Cheer?

A Case In Point

Businesses are wising up. "[They've] gotten very skittish in recent years," Madden says. "Some don't serve alcohol, and some don't have parties at all." After all, drunken employees are also more inclined to engage in sexual harassment or say things they shouldn't. Employers who decide to serve alcohol at parties are being far more careful about how they serve it.

Consider a case decided last year, also in North Carolina, where the employer won. A newspaper publisher invited 300 guests to a retirement party for the editor. The catered party was held in the publisher's backyard, with hired bartenders and a parking company to shuttle guests from remote parking spots. One reporter, who drank three or four gin and tonics at the party, later crashed his Toyota into another car. The other car's driver was in a coma for nine months before his death.

The driver's family sued the employee who caused the accident, as well as the publisher who hosted the party and the publishing company. The family claimed the publisher and the company had negligently served unlimited amounts of intoxicating beverages when they knew or should have known employees would get drunk. They also claimed attending the party was within the "course and scope" of the reporter's employment, so the company should be liable no matter how careful the hosts were.

The district court dismissed the lawsuit against the host and the company. When the family appealed, the Court of Appeals affirmed that decision. Eventually, the North Carolina Supreme Court reviewed the case and agreed with the lower courts.

Why did the employer win? The publishing company was off the hook because the party was clearly not part of the reporter's job. It wasn't at the place of business, was held during off-hours, and employees were not required to attend. Employees were not paid for attending or required to work if they didn't go, and the reporter did no reporting while there.

The host was off the hook because the plaintiffs couldn't show that those responsible for the party knew or should have known the reporter was getting drunk. Numerous witnesses said they talked to him, and he appeared sober. "The court ruled that all you can go on is how the person appears and whether the host had safeguards in place," says Madden, who represented the publishing company. It's unreasonable to expect the host to have a Breathalyzer at the door, Madden notes. In this case, there were trained bartenders serving and observing guests, plus shuttle drivers who had another chance to observe them before they hit the road.

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This article was originally published in the December 1996 print edition of Entrepreneur with the headline: Holiday Cheer?.

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