Avoiding Holiday Lawsuits

How to protect your company so the partying doesn't get out of hand

By Sarah Pierce • Dec 3, 2003

Opinions expressed by Entrepreneur contributors are their own.

Holiday parties are the perfect way to bring employees togetherin a relaxed atmosphere and reward them for working hard. But whathappens if the holiday cheer gets out of hand? You never know whenone person's trip to the mistletoe might mean anotherperson's trip to a lawyer. Special events such as holidayparties can become a breeding ground for sexual harassment andother forms of inappropriate behavior, especially if alcohol isinvolved. So what can you do to avoid the problems? Elizabeth D.Moore, a partner with the law firm Nixon Peabody who specializes inemployment counseling and preventing lawsuits, offers the followingtips to help you avoid holiday lawsuits.

Double-check the legalities of your company's sexualharassment policy. "Sometimes employees don't realizethat a company-sponsored event is covered by the company'sharassment policy," Moore says. Anytime a company pays for anevent, whether it's on site or off, it's considered acompany-sponsored event. This includes lunches, cocktail hours andother forms of entertainment that can be paid for with the companycredit card. But beware, Moore warns, because even if the companyisn't covering the expenses, the event can still fall under theumbrella of scrutiny if business is being discussed. Make sure yourpolicy clearly defines harassment behavior and covers any outsideevents.

Make sure the policy covers employee injuries. This isespecially true if employees are required to attend. Employers areresponsible for any injuries that occur at a company-sponsoredevent.

Assign someone to be responsible for monitoring inappropriatebehavior. A manager or other responsible employee can watch forsigns of inappropriate behavior and prevent uncomfortablesituations before they happen or before they get out of control.Having an appointed person can also take the pressure away fromother employees who may not want to get involved in a stickysituation.

Extend the employee party to include spouses andchildren. "It's the easiest way to avoid issues,"says Moore. "Employees will generally behave in front of theirchildren." Changing an event from a drinking and partyingatmosphere to a family-oriented one creates an environment whereinappropriate behavior rarely occurs.

Limit alcohol consumption. Alcohol consumption clearlygives rise to all kinds of incidences, says Moore. Here are severalways to prevent over-intoxication:

  • Serve beer over hard alcohol whenever possible.
  • Provide drink tickets to limit employees to a maximum number ofthree alcoholic beverages.
  • Have professionals serve the alcohol. Companies often make themistake of offering self-service bars or allowing employees toserve drinks. Professional bartenders not only carry insurance, butthey're trained to know when to cut somebody off, isolatingyour company from any liability.

Provide a car service to ensure all employees get homesafely. Anything that happens to an employee between the timethey leave your event until they reach home can create liabilityfor you. Provide a car service regardless of what an employee hasconsumed so that everyone is comfortable using it.

If throwing a holiday party gives you visions of sugar plumfairies and lawsuits dancing in your head, there are other ways toreward your employees without looking like a Grinch. Moore suggestsgiving employees a half-day of shopping instead of a party,something that's becoming increasingly popular with companies.Whatever you decide to do, taking preventive measures will ensurethat your employees, and your company, will have a safe and happyholiday season.


Sarah Pierce is a freelance writer living in SouthernCalifornia.

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