Ask the Experts: Holiday Party Liability
Question: We just held our annual, after-hours holiday party at a restaurant. One employee was a bit tipsy when she arrived, drank more alcohol, and during the course of the party fell and injured her head. Is our company, or the venue where we held the party, liable for her injury?
Answer: Both the venue and the employer may be held liable. The company may hold liability if the party was sponsored and paid for by the company, and the company permitted an individual to consume alcohol at its expense. Additionally, the venue may hold liability if it continued to serve alcohol to an individual who may have been impaired. Thus both parties may be found negligent and liable should any claim be filed by the individual.
When a company announces, promotes, and covers the expense of an event, it is the sponsor of the event and can be liable for injuries incurred at the event. The company must review its service agreement with the venue to determine if there was any disclosure as to liability. If there was no agreement or liability statement, the employer should consult with its workers’ compensation and general liability carrier. Often in this type of scenario the workers’ compensation carrier may deny the claim because the event did not occur on company property or during the normal course of work or working hours. However, as the sponsoring company of the event, and in the event of any claim by the injured individual, the company could be liable and should report the incident as quickly as possible with its general liability carrier.
Many event venues will require an employer or large party to provide some level of insurance releasing liability of the venue in the circumstance of injury, illness, or otherwise. It is always a good practice to review such agreements with general counsel and set expectations with employees in advance of an event to have fun and consume responsibly (if alcohol is involved). Further, as a best practice, management should be briefed ahead of time to address any inappropriateness or excessive consumption discreetly and swiftly, extending transportation to the individual’s home at the company’s expense.