11/ 27/ 2007
by by Pamela Mills-Senn
The holiday season is a great time to show employees appreciation for all their hard work, and to be honest, they expect this. But as you're planning this year’s bash, there are some things you need to keep in mind so your company doesn't end up getting more than expected—like sexual harassment lawsuits, discrimination claims, workplace violence and the legal liability associated with the alcohol-fueled misbehavior on the part of employees.
The truth is, while company-sponsored holiday parties have their benefits, they are, nonetheless, legal minefields that can leave a business reeling long after the mistletoe has wilted (and by the way, never hang mistletoe at a company party). Take the matter of drunk driving, for instance. It’s no secret that alcohol-related arrests increase during the holidays, but what small-business owners may not be aware of is how they could be left dangling on the legal hook.
“The question of liability is somewhat uncertain,” says Michael Goldfarb, an employment attorney and CEO of Protective HR Solutions, Inc., a nationwide full-service HR consulting firm based in Thousand Oaks, Calif.
“Generally, the law protects someone who is serving in a club environment, for example,” he explains. “But a company situation is different. There is a legal theory that there’s a special relationship between employer and employee, and if you, the employer, could have prevented it (the dunk driving accident or arrest, etc.) there could be liability, especially if a company car is involved.”
Sexual harassment complaints also arise as a result of company-sponsored holiday parties, something that completely blindsides most business owners, says Goldfarb, who explains that as the alcohol flows, inhibitions drop and people can end up getting a little too close for comfort.
“And then there’s violence in the workplace,” Goldfarb continues. “Alcohol could set off something that has been brewing and simmering in the workplace. In fact, workplace violence has become the No. 1 plague during holiday times because of alcohol, tensions in the workplace and loneliness.
“And should someone end up on life support, this could bankrupt a company,” Goldfarb continues. “Many companies think their insurance carrier will pick up the tab, but there are major exclusions, and many carriers will deny coverage if they feel the employer did not behave reasonably or responsibly, such as over-serving at a company-sponsored event.”
Holiday party misbehavior doesn't have to be egregious in order to negatively impact the workplace, says Christopher Boman, partner with Fisher and Phillips, LLC, a nationwide employment law firm headquartered in Atlanta.
Although sexual harassment and sexual assaults are the leading problems to come out of holiday parties, milder forms of misconduct, such as non-legally prosecutable but still inappropriate behavior, off-color comments, fistfights and the like, can, and do, create next-day headaches for companies, Boman says. In fact, according to him, 36 percent of employers reported such behavioral problems at their most recent holiday parties.
But don't despair. There’s no reason to turn into a Scrooge, especially when, with just a little bit of foresight, you can reduce your legal liability and still have a good time.
For example, at one time Bob Poole owned a small sales, marketing and customer service business based in Pittsburgh that had more than 25 employees. Poole, now president and CEO of The Poole Consulting Group LLC in Perkasie, Pa., says he regularly threw holiday parties and never encountered such difficulties. He attributes this to the following:
- He always had it catered, with lots of food. “Over the years, I've been to too many company-sponsored parties where there was plenty of alcohol but only finger foods, which led to people being over-served,” he says. “I like having lots of real food so that people have plenty to eat while they are drinking.”
- He hired a bartender. This person also monitored consumption, says Poole and would let him know if someone needed cutting off. Boman agrees with this approach.
“Hire professional bartenders; don't ever use supervisors, you don't want managers or supervisors serving subordinates. And instruct them to report anyone whom they feel has had too much [to drink],” he says. “Ensure that bartenders require positive identification from quests who do not appear to be substantially over 21.”
However, Goldfarb cautions against having a bartender.
“If the company hires or puts one in, they are adding a level of oversight that adds potential liability,” he explains. “Employees should monitor themselves. Being served distills personal responsibility.”
Other tips regarding alcohol include setting a cutoff time, typically the last hour of the party; sticking with beer and wine rather than hard liquor; opting for a cash bar or ticket system rather than an open bar; and bringing the alcohol out in intervals rather than putting it out all at once.
“Also arrange for taxis or designated drivers,” Goldfarb says. “This shows the employer is doing what is reasonably expected.”
- Parties were always held at the office. "We had our own building and it was set up with a full kitchen and was an old historical building that was perfectly suited for parties and mingling," recalls Poole.
But Goldfarb recommends using an off-site location. "You want to create a neutral environment," he says. "This also gives people a chance to go someplace special. Plus, people will tend to be a little more courteous and responsible and better behaved."
However, Poole says behavior was never an issue because his employees felt like owners of the company, since they all had stock, and therefore treated the business as if it was their own. Boman says that it is important employees know that while the party is a voluntary event, it is still a work function and work behavior applies.
"The supervisors and managers set the standard,' he says. "They're on-duty and are the eyes and ears. Remind employees that, while you encourage them to have a good time, your company's normal workplace standards of conduct will be in force at the party and misconduct at or after the party can result in disciplinary action. And instruct managers that they're not allowed to attend any post parties."
- Spouses/significant others were always invited. As were vendors, suppliers, and friends of the company. This made the party seem more like a special event and less like an office function, Poole says, while the presence of spouses, etc., warded off a lot of potential problems. Boman support this approach, although he adds that this can be a double-edged sword if the spouse/significant other notices their partner being a little too friendly with opposite-sex coworkers.
Some employers, seeking to avoid the problems associated with holiday parties, are exploring other options, such as volunteerism, says Jennifer Berman, managing director of the HR & Advisory Training Services group for CBIZ Human Capital Services Inc., a Chicago-based business solutions consulting company.
"There are so many great ways to give employees a sense of the season," says Berman. "I recommend to employers that they look for ways to get around this issue by considering group charity events. Volunteer at a soup kitchen, do something together. A lot of employers are looking at these options very successfully over concerns of liability but also to instill camaraderie and to provide a way to celebrate that doesn't involve alcohol and low-cut tops." (Visit www.volunteermatch.com to find out about volunteer opportunities for your company)
Employers need to use commonsense, says Goldfarb. "It's hard to believe, but I actually ran across an employer who threw a holiday party at a strip club," he recalls, his disbelief evident. "Talk about offending. This was a construction company and most of the employees were male, but there were female employees also, and the company got sued big time by one of them for sexual harassment and creating a hostile workplace environment."
Finally, business owners should listen to their employees, Goldfarb continues.
"For example, a Christmas tree is not considered a religious symbol, so it's not enough to claim religious discrimination, but what I advise is that if any employee does express a concern, don't disregard it; talk to the employee. You don't have to change plans, but give the employee a chance to voice concerns. Ninety-nine percent of the time, this is enough to avoid problems."
