The company party: cheer or hangover?

The holiday season is a time to spread cheer and a festive spirit. But holiday celebrations can also mean increased liability for workers’ compensation, discrimination, harassment, and third party injuries.

While each state has its own laws, the key question to trigger workers’ compensation coverage is whether the injury was “within the course and scope of employment.” Opinions have differed on the parameters of course and scope of employment, but some common factors that apply include, but are not limited to, mandatory attendance (expressed or implied), celebrations during working hours, events held on employer’s premises, events where employees are recognized or given bonuses, and events that include vendors or customers.

Here are a few examples. In Minnesota, an employee was out on medical leave for a non-work-related injury, but received an invitation to the annual dinner and to receive her turkey. When receiving her turkey she slipped and fell in the parking lot, and the Minnesota Supreme Court found that the employer directed the employee to come to the premises to obtain the turkey, which was a form of bonus compensation.

In California, all company sponsored events fall within course and scope, because they benefit the employer by improving employee morale and furthering employer-employee relations. Furthermore, a 2013 case, Purton v. Marriott, Int’l, Inc., found the employer liable for an employee who took his own liquor to a company party, which had restricted serving to beer and wine and two drinks. He became intoxicated, went home, and later drove an intoxicated coworker home and struck a vehicle, killing its driver. The court found as long as the proximate cause (intoxication) was within the course and scope of employment, the employer could be liable.

Here are eleven tips to help ensure that cheer does not turn into a legal nightmare:

  1. Be sure workers understand that attendance is voluntary. This should be clearly stated in the invitation, whether it is an email or a flyer posted in the workplace.
  2. Hold after work hours and off site, reducing the likelihood the party will be perceived as work related.
  3. Don’t encourage attendance by either implying attendance will help the employee advance or that failure to attend sends the message the worker isn’t a team player.
  4. Avoid presentation of awards, bonuses or other recognition that suggest employees are there for business reasons.
  5. Be cautious about inviting vendors, clients or others with whom you have a business relationship.
  6. Invite spouses and significant others.
  7. Remind employees that normal workplace standards of conduct are to be respected. Parties, particularly when alcohol is served, can lead to sexual harassment or discrimination claims. Treat any discrimination or harassment claims seriously and conduct appropriate investigations
  8. Limit or do not serve alcohol. Do not have an open bar. Close the bar at least one hour before the end of the party. Be sure that alcohol is served by a professional bartender or at a licensed establishment that knows when to stop serving an individual. Serve plenty of food. Arrange for no-cost transportation for any employee who should not drive home.
  9. Don’t allow employees to post company party images/comments on social media outlets without having a policy in place.
  10. Be careful of language and decorations – don’t call it a Christmas party or invite “husbands and wives.”
  11. Discuss your exposure with your insurance agent.

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