Don't let bad decisions turn your holiday party sour

The holiday season, it's a time for celebrating and sharing good times with others, which often includes the annual office holiday gathering. It's an event many look forward to and it can offer benefits of boosting employee morale. But as an employer, do you know the risks involved in hosting office parties? Here's what you should consider for throwing a smart shindig.

You don't want an office Christmas party

The chances are great that a large number of your employees don't celebrate Christmas. Employees may observe other holidays such as Kwanzaa or Hanukkah, or they may not celebrate any holidays at all. In order to respect the religious freedoms of your employees and their guests, it's best to refer to such celebrations as "holiday" or "winter" parties.

On serving alcohol

Deciding what to call your party is a relatively small concern compared to liabilities associated with serving alcohol. Eighty-three percent of businesses host a holiday party for their employees and 53 percent of these businesses serve alcoholic beverages.

Under liquor laws, in many states, if a person is served alcoholic drinks at a company party on the premises and then injures himself or herself, or someone else, in an accident, the company could be held liable if the drinks contributed to their intoxication. Tips to avoid legal trouble include:

* Provide transportation or designated drivers.

* Limit the number of drinks or the length of time when alcohol is served.

* Ensure that alcohol is not served at any time to anyone under the legal drinking age, 21 years.

* Provide alternative, non-alcoholic beverages.

* Investigate obtaining insurance coverage such as liquor law liability insurance to cover the event or hold the party in a licensed establishment such as a restaurant, bar, or other venue whose liquor law liability insurance may cover the event. Check with the establishment about their insurance coverage, and get their response in writing.

* Remind employees in the invitation and post a sign at the event that drinking and driving don't mix.

Handling potential harassment issues

Drinking and driving is not the only issue associated with alcohol consumption that can get you into hot water. Harassment can also become a problem when you add a few drinks to the mix. Approximately one-third of employers report some form of employee misconduct at holiday parties, including excessive drinking, fighting and sexual advances. This misconduct may lead to employer liability in the form of harassment or other common law tort liabilities.

The U.S. Supreme Court and the Equal Employment Opportunity Commission have recognized that sexual harassment occurs in two ways: "harassment that involves the conditioning of concrete employment benefits on sexual favors, and harassment that, while not affecting economic benefits, creates a hostile or offensive working environment."

Examples of conduct that a reasonable person might find hostile or abusive include:

* Repeated offensive sexual flirtations, advances, or propositions

* Continued or repeated verbal abuse or innuendo of a sexual nature

* Uninvited physical contact such as touching, hugging, patting or pinching

* Display of sexually suggestive objects or pictures

* Jokes or remarks of a sexual nature in front of people who find them offensive

* Prolonged staring or leering at a person

* Making obscene gestures or suggestive or insulting sounds

Supervisors should be alert and ready to intervene if any such activities occur at the holiday gathering, and they should report any incident in accordance with your normal harassment policy and procedures.

How to limit holiday party liability

Before your holiday party, you may also want to:

* Review your insurance policies for alcohol-related exclusions.

* Emphasize to employees your policies prohibiting drug and alcohol abuse, harassment, fighting, weapons, and other misconduct.

* Educate supervisors and employees regarding the procedures for reporting and responding to this misconduct.

* Check the insurance coverage of anyone hired for the party. If you hire caterers, servers, bartenders or anyone else to provide and serve drinks, check to see if they carry liability insurance that would cover any potential liability exposure for your business from the event.

* Consult with an attorney.

If your company plans to host a holiday party, it may not be possible to eliminate the risk of employer liability. However, employers who plan appropriately can minimize risk and allow everyone to enjoy the celebration.

David McElhinney is a partner at Lewis and Roca LLP, formerly Beckley Singleton, in Reno. Contact him at DMcElhinney@LRLaw.com.