Employers Planning Alternative Holiday Celebrations Should Realize Liability Issues

It’s no surprise that in today’s tough economic climate many employers are cutting back on holiday celebrations. And while business owners intend to thank employees for the year’s hard work, they often disregard the liabilities involved in throwing a company bash for their staff. But employment law specialists warn that if cost-cutting on celebrations is in the works, employers should be aware of the potential pitfalls.

As one of the employment law experts at the Irvine, Calif. office of Fisher & Phillips, Christopher J. Boman warns employers to prepare for possible legal issues that could make for an unpleasant event, or even get them sued. While companies may want to cut costs, they must take preventative action before the party starts to avoid legal trouble. Bowan encourages employers to consider the following:

1. If a company has experienced recent layoffs, consider the message of then throwing an extravagant party. Can you justify the celebration costs when foregoing it could have kept a few staff members employed for a few months? Morale of current staff concerned about additional layoffs could also be an issue, as well as the potential for lawsuits from disgruntled former staff that hear about the party expenses.
2. Beware if boss is supplying the booze. If business owners host a party at their home to save cash and are serving alcohol, they should be aware of the personal liability they may face if someone drives off from the party drunk. Arrange for a no-cost taxi service for any employee who feels that he or she should not drive home.
3. Be cautious if cutting out the professional bartender. While Boman counsels employers to find money in the budget to hire a professional bartender, if it’s simply not an option employers should ensure all staff enjoying alcohol are 21 and monitor everyone’s alcohol consumption.
4. Clarify guidelines if hosting the party at work. While Boman recommends employers avoid hosting a party on company property, if they do opt for this, they should ensure that employees know the party is voluntary and that people aren’t working to avoid any confusion about compensation. Also ensure everyone knows workplace behavior rules still apply. Finally, transportation should be offered to anyone who may have overindulged.
5. Consider alternative celebrations. Companies can take a portion or all of the money traditionally spent on the holiday party and donate it to a charity in need. The economy has had a dramatic impact on nonprofits, and the generosity could promote the company’s reputation within the community. Another option is to consider a company potluck or other event that’s still social and fun.
6. Avoid offensive white elephant gifts. In an attempt to keep a gift-giving tradition inexpensive, companies may encourage staff members to exchange white elephant gifts. Remind them to avoid gifts that could be offensive and spark harassment lawsuits or other issues.

Source: Fisher & Phillips LLP; www.laborlawyers.com.

Reprinted with permission. © CCH
(Submitted Sept. 15, 2009)