“O God, that men should put an enemy in their mouths to steal away their brains!"
- Cassio (Act II, Scene iii), William Shakespeare, Othello
Summer is now in full swing. For many business owners and employers, this means company picnics, golf outings, “happy hours,” softball leagues, and other well-intentioned team-building activities for employers and employees are the norm. If your organization is among the companies that provide or allow for the consumption of alcohol at these events, you have probably considered whether this is a good practice.
You want your employees to enjoy their time together away from the grind of work, but, like Cassio, you are concerned about the consequences of over-indulging. Your goal should be to minimize the legal liability of your organization without letting legal worries dictate your relationship with your employees.
The good news is that courts in New York have generally held that New York’s Alcoholic Beverage Control Law section 65 and General Obligation Law section 11-100 impose liability only on businesses whose primary purpose is to sell alcohol. The New York Court of Appeals has determined that a company will not be held liable under New York’s “Dram Shop Act” even where an employee who was served alcohol at a company picnic was involved in a drunk driving accident afterwards, sustaining injuries in the process.
The Court ruled that because the company did not sell the alcohol it served at the picnic, it was not liable under state statute. See D'Amico v. Christie, 518 N.E.2d at 889. However, companies must be aware that it remains possible for business owners and employers to be held civilly liable if visibly intoxicated people at a company event subsequently injure themselves or others where a court determines that the company was a negligent “social host.” What, then, can you do to reduce your potential liability? You can and should take steps to be proactive and put yourself and your organization in the best possible position.
1. Review your insurance policies. If a visibly intoxicated employee continues to drink at your company-sponsored or hosted event and assaults another employee the resulting lawsuit will most likely be excluded by your General Liability insurance policy (workplace violence liability insurance may be appropriate). Another possible exclusion includes employees injured in a car accident in which a fellow employee was driving (hired and non-owned auto insurance may be appropriate).
The good news is that following D’Amico, in most instances in New York State, injuries to a third-party (non-employee) by one of your intoxicated employees or guests of a work function will not be excluded as long as serving alcohol is not your business’s primary function.
The bad news is that if your carrier disclaims coverage and says it is not responsible for defending your business against the lawsuit, the defense cost alone could bankrupt your business. Read your policies carefully and make sure that you are aware of any exclusion applicable to your event before you host or sponsor the event.
2. Communicate with your employees before the event. Talk about your organization’s culture with your employees and emphasize that drinking to excess at these summer events will not be tolerated. Consider adding this reminder to your employees’ code of conduct. Consumption of alcohol lowers inhibitions, and impairs judgment. This can result in employees saying and doing things that they would not ordinarily do. Remind employees that, while you encourage everyone 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.
3. Provide food. You do not have to serve a five-course meal to keep your employees safe, but always serve some appetizers or heavy hors d’oeuvres from the start of the event so employees are not drinking on an empty stomach. Provide a late night snack buffet before employees drive following a company event.
4. Vary the drinks offered. Offer a variety of interesting, non-alcoholic beverages, to remove the emphasis from alcohol. Never make drinking alcohol the main focus of your team-building event. Rather, offer a wide variety of sodas, juices, non-alcoholic punch and festive cocktails.
5. Avoid the hard stuff. Consider serving just beer and wine, no liquor. While any form of alcohol consumed in excess can be dangerous, serving mixed drinks and “spiked” punch can limit an employee’s ability to assess how much alcohol they are drinking.
6. Use SLA licensed professionals. Consider using trained bartenders with credentials from the State Liquor Authority to serve alcohol. Instruct your bartenders to refrain from serving visibly intoxicated persons. Whenever possible, avoid allowing employees to serve coworkers. Allow your bartenders to accept tips, but do not charge your employees for drinks. Any fees paid for the purchase and consumption of alcohol should go the SLA approved entity selling the drinks; your company should not derive a profit from the sale of alcohol.
7. Offer transportation. Offer to pay for cabs or a shuttle to sit outside your event in case an employee is advised or decides that he or she cannot drive safely.
Although it is beyond dispute that alcohol “can steal away the brains” of even the most otherwise reliable employee in an organization, if carefully served and moderately consumed, it can serve as an important part of any organization’s team-building efforts. Following these Seven Suggestions will go a long way toward keeping your employees safe and your organization out of court.
Kevin Burke is a partner in the Civil Litigation and Labor and Employment Practice Groups at Lippes Mathias Wexler Friedman LLP in Buffalo. He can be reached at firstname.lastname@example.org