When planning parties, business owners should be mindful of state laws that hold employers who host a party where alcohol is served liable for injuries caused by the negligent or reckless acts of employees who may leave the party intoxicated.

In the midst of the summer season, many business owners may be planning to host work-related parties where it is common practice to serve alcoholic beverages. When planning parties, business owners should be mindful of state laws that hold employers who host a party where alcohol is served liable for injuries caused by the negligent or reckless acts of employees who may leave the party intoxicated. Laws governing liability for these events are commonly known as "Social Host Liability."

Social Host Liability

Social Host Liability is determined by common law or statutes and varies from state to state. While you should consult with your local attorneys as to what your liability may be for hosting a party where alcohol consumption is involved, below is a general overview of the potential for liability and recommendations to help you reduce or eliminate claims arising from Social Host Liability.

In some states, liability is placed on an employer hosting a social event for injuries caused to a third person by an intoxicated guest or employee based on two theories: 1) a social host has a duty to refrain from serving intoxicating liquors to an invitee/employee who is visibly intoxicated and to prevent an intoxicated employee from driving himself or herself home; and 2) an employer is liable for actions of its employee occurring "in the course of employment."

Many state laws hold that a social host is not responsible under any circumstance for furnishing alcohol to a person who is over the legal drinking age. The theory behind this rule is that the conduct of the guest (the drinking), rather than the host furnishing the alcohol is the cause of the injury to any third party. Almost every state will hold an employer responsible for serving alcohol to a minor.

Some states make a distinction between an employee attending an employer's party voluntarily or as a mandatory event. Those states hold that if the social event is voluntary, an employer will not be responsible for injuries caused by intoxicated guests. On the other hand, if employees are required to attend the event, injuries caused by an intoxicated employee are the responsibility of the employer because the employee was acting in the "course of his employment."

Some states also draw a distinction between a company-sponsored party where the alcohol is served by a facility licensed to serve alcoholic beverages (a bar or restaurant, golf course, etc.) vs. the employer directly providing alcoholic beverages to its employees.

General Rules to Keep in Mind

If your company plans on sponsoring a social event, the following rules should be carefully observed:

Your company should not require that its employees attend the social event. You should make it very clear that your employees have no obligation whatsoever to attend the party and do so on a voluntary basis only.

Under no circumstances should alcohol be served to minors. We urge you to supervise the party to make sure that all persons consuming alcohol are of legal age.

In the event that an employee is operating an employer-owned or employer-leased vehicle, you may be exposed to liability for injury or damage caused by an intoxicated employee operating the vehicle, irrespective of your state's social host liability laws.

It is always a smart practice to "cut off" an employee who appears intoxicated at a social event and make a reasonable attempt to provide safe transportation to the employee's home.

Conclusion

Carefully planned voluntary social events are great morale boosters and an appreciated reward to your hardworking employees. While we certainly do not suggest that such events be discontinued, we do suggest that you make yourself aware of your state's law in terms of potential liability and follow the general recommendations stated above. Even if your state does not currently impose liability as a social host, given the growing societal pressures and conservative political climates, it is almost certain the trend will continue to expand liability on those knowingly serving alcohol to intoxicated persons or minors.

When you host your parties, it is important that you carefully supervise the voluntarily attended party to make sure that no minor employee is served alcohol and no adult employee is becoming visibly intoxicated. You should also strongly consider providing alternate means of transportation for any employee who appears to be intoxicated.

Finally, you should review your company's liability insurance coverage to determine if you have coverage in the event an intoxicated guest at a social function is involved in an accident/incident causing personal injury or property damage.

Have fun and be careful!!