The Holiday Party: Limiting Potential Risks and Liabilities


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For decades, the annual holiday party was considered de rigueur for companies large and small. Especially in larger companies, the holiday party was a deck the halls splashy affair, with fine food, freely-flowing libations and high jinks that frequently went overboard. During the height of the Great Recession, many companies scaled back on these festive affairs or eliminated them completely, but during recent years, the holiday party has begun to come back into vogue.

In many respects, this is a welcome development. A good holiday party can raise employee morale and enhance a company’s image in the industry – and even with the general public. Nonetheless, there are hazards associated with the holiday party, some of which can pose serious risks to the long term well being of your company. Even so, taking common sense measures can maximize the fun while reducing the risks.

To Party? Or Not to Party?

Is the holiday party a worthwhile investment or a needless expense that exposes your company to unnecessary risk? That’s a call each individual company must make for itself, according to Scott K. Liner, an attorney specializing in labor and employment law and a partner at Liner LLP, a firm with offices in Los Angeles and New York City.

“Every year, many companies struggle with the decision on whether to spend money on a party. There is no right or wrong answer,” Liner stated.

For companies that opt for a holiday party, limiting the guest list to employees and spouses or significant others – whether or not to save money – is not a good strategy, according to Liner.

“The purpose of the event is to celebrate the holidays and companies use the party to show their appreciate everyone who works there. Therefore, employees should be invited to bring a guest and not simply a significant other,” he insisted.

Limiting Potential Liability

Quick action to obtain medical assistance can mitigate adverse legal consequences for unfortunate occurrences such as slip and fall accidents or food poisoning. Nonetheless, it is impossible to eliminate legal responsibility completely, according to Liner.

“Depending on the event and the state that the company is located, the injury may also be covered under applicable workers compensation laws.” Liner stated.

Cutting corners in the wrong areas can also lead to potential legal headaches. For instance, employers can be held vicariously liable for damages related to incidents involving employees who are inebriated from alcohol served at a holiday party, according to Liner.

“I am not in favor of having BYOB at the office or at offsite locations. It will only encourage the use of alcohol away from the festivities and encourage greater consumption,” he explained.

Larger companies often offer free or discounted overnight accommodations at or near the holiday party venue for partygoers who overindulge on libations. Smaller operations often cannot and should not be expected to lay out this kind of expense. However, offering free or discounted taxicab or shared ride services is a relatively inexpensive strategy for smaller companies to reduce the number of inebriated revelers getting behind the wheel of a car. Companies both large and small can also consider holding holiday festivities during the day, when alcohol is less likely to be served, according to Liner.
Employees who misbehave at a holiday party should be dealt with under the same set of policies that dictate conduct in the office, whether the party is held on company premises or not. That includes taking disciplinary action when warranted, according to Liner.

“Disciplinary action, including warnings demotions or even termination may be appropriate. Companies should consult with employment counsel before taking any adverse actions. The likelihood of the lawsuit will depend on the special circumstances underling the claims but in the absence of any unusual and unforeseen factors, the same considerations of any normal employee discipline considerations should be followed,” he explained.

Minimizing Hurt Feelings and Ostracism

It should go without saying that with very limited exceptions, the holiday party should be a strictly secular affair. Decorations with overtly religious overtones have no place in the common areas of your company or as part of the decoration for a holiday party, according to Miner. Mistletoe, while not considered religious, could convey the wrong impression and should also be avoided. This doesn’t mean your company’s holiday party must be void of adornment. Christmas trees, wreaths, garlands, and decorations of a similar nature are considered to be nonreligious by the Equal Employment Opportunity Commission and are perfectly fine.

Employees often organize “Secret Santa” gift exchanges during the holidays. For the most part, Liner advises a hands-off approach to private gift exchanges. However, company-sponsored exchanges should be conducted under specific guidelines that are clearly spelled out.

“Having the event on work premises is acceptable. We are not trying to sterilize the workplace, but do want to take smart steps to avoid hurt feelings and discomfort, as well as claims of harassment. If the company is going to participate or endorse a Secret Santa type of exchange, then it should set forth specific requirements, including amount to spend and prohibiting inappropriate gifts, “he stated.

Audrey Henderson
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Posted In: Management

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