What are the liabilities of serving alcohol at a company event?

One of the most common concerns during an organization’s celebration event is serving alcohol. The legal issue is whether an employer is liable if its employee subsequently drives under the influence and causes an accident that injures the employee or others.

The law on this issue varies from state to state. However, some general guidelines can be gleaned from court cases. 

The greatest exposure to employers is if they serve alcohol to minors. If a minor is involved in an accident while driving under the influence of alcohol served to him or her by the employer, it is likely that the employer will be held liable as a “social host.” 

The result is less clear when the employee is an adult. In some states, “social host” liability is restricted to the service of alcohol to minors. However, even in such states, the case law often leaves open the possibility that employers may potentially be held liable. 

Moreover, even where there is no potential for legal liability, there are moral considerations. It would be hard to sleep at night if you knew that a serious or fatal accident involving one of your employees might have been avoided had reasonable steps been taken to limit the consumption of alcohol. 

Obviously, the safest approach, from a legal perspective, is to supply no alcohol. However, this may not be practical or desirable. 

Where alcohol is provided, the following guidelines may help minimize the employer’s risk:

• Make clear in pre-party communications that minors cannot drink and that if they do, they may be terminated. Ask those who dispense the alcohol to keep an eye out for those who look too young to drink and to card individuals if they have any doubt.

• Make clear in pre-party communications that employees must limit their consumption to avoid being under the influence.

• Have someone serve alcohol rather than permitting employees to serve themselves. Doing so not only gives the servers (the number of which should be limited) the opportunity to flag employees who drink too much, but it also may deter employees from pouring too many drinks in the first place.

• Consider establishing a maximum number of drinks that individuals can have. Tickets don’t always work because individuals can give away their tickets. Consider a stamp on an employee’s hand in exchange for a drink, limiting the number of stamps an employee can receive.

• Make cab vouchers available to employees and ensure they can obtain vouchers without going to a manager.

• Provide a variety of entertainment (e.g., dancing, games) so that drinking is not the focus of the party.

• Hold the party at a location that is easily accessible by public transportation.

• Ask certain managers to keep their eyes and ears open for individuals who are visibly intoxicated.

• Serve plenty of nonalcoholic beverages and lots of food.

• Consider using sober/safe ride programs.

• If the party is held at a hotel, arrange for a block of rooms that employees can reserve at a discount.