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'Tis the Season-for Celebration or Litigation?

by The Human Equation, Inc. on 10/18/2010
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The halls have been decked, and employees have donned their gay apparel; everyone appears to be in good cheer at the office holiday party, held on a Saturday night at an off-site location. But there's a problem: some employees are passing around "gag" gifts, items overtly sexual in nature. Making matters worse, these employees are telling lewd jokes and sharing lurid stories about the sex lives of celebrities. One employee, Susan, is clearly distressed by the goings-on. When Susan conveys her disapproval to the group, everyone laughs and continues the racy conversation and joke-telling. Even her immediate supervisor Nancy shrugs and tells Susan, "It's a party. Ignore it if it bothers you." Susan then leaves abruptly.

On Monday, Susan informs the Human Resources department that she's thinking about filing a hostile work environment harassment complaint as a result of her co-workers' crude and offensive behavior at the party. The HR director tells Susan that because the event occurred off-site and on the weekend, her claim has no merit. Is the director correct?

In fact, no. Susan's complaint may support a hostile work environment claim because employers can be held liable for inappropriate conduct at a company-sponsored event, including one that is held off-site and "off the clock." Wisconsin attorney Randall Gold points out that "it is critical that both employees and employers realize that the same rules governing harassment during normal business hours apply at the holiday party." Furthermore, Gold notes that "the corporate holiday party is a classic breeding ground for bad behavior that may cost a company time, money, and valuable employees."

Statistics seem to bear out Gold's observation. The Insurance Journal has reported that sexual harassment claims spike in January. A 2004 survey conducted by Harris Interactive® revealed that 29 percent of adults have experienced or witnessed sexual conduct between co-workers at office holiday parties. Of course, such sexual contact does not necessarily constitute harassment, but the potential for trouble is there. Recently, a court in Illinois stated, "…at the risk of playing the Grinch…office Christmas parties also seem to be fertile ground for unwanted sexual overtures that lead to Title VII complaints." Atlanta psychologist Dr. Linda Tillman speculates that because office parties "blur the boundaries between one's professional and social lives," both employers and employees may be in more jeopardy than they realize. In fact, concludes Alan Kopit, legal editor of lawyers.com, "an office party can be the site of a sexual harassment situation just as much as the office."

So what can employers do to avoid being haunted by the Ghost of Christmas Party Litigation? Consider taking the following preventive steps:

Publish or Perish: Before the party, employers should redistribute the company's sexual harassment policy, making sure that all employees read it and submit notification of having done so. Employees should also be reminded that while it may be "the season to be jolly," a holiday party is no excuse for inappropriate behavior, which will not be tolerated. The company's general code of conduct should also be redistributed in advance so that employees are fully aware of the company's expectations for behavior.

Do as I Do: Managers and supervisors should be trained on proper conduct for the holiday party and should be a visible, positive presence there; as company representatives, they should set a professional example for all employees. Also, managers and supervisors should be instructed not to invite employees to get-togethers at their houses or at local pubs; such "after-parties" are frequently occasions for harassment incidents.

Dress for Success: The dress code for the party should be clearly established in advance. While provocative dress is never justification for sexual harassment, employees should be mindful that though the occasion is a social activity and not a business function per se, it is still a gathering of professionals, and appropriate dress for the occasion is expected.

Take My Wife-Please: Employees should be encouraged to bring spouses or significant others to the party; their presence can discourage intra-office romances that might pose problems later. Also consider inviting important clients-employees are much less likely to engage in inappropriate behavior if they know that the company's business associates are at the party.

Sign on the Bottom Line: Employees should be asked to sign a release that limits the company's liability for employees' participation in company-sponsored extracurricular activities. While such a release does not confer absolute legal protection to employers, it may limit their liability and can serve as a reminder to employees that they are responsible for their conduct.

To Drink or Not to Drink?

Perhaps an even more dangerous aspect of the office holiday party is the serving of alcohol, which not only exposes a company to litigation but also endangers lives. The data compiled by the National Highway Traffic Safety Administration (NHTSA) are, quite frankly, sobering:

  • In 2005, 16,885 people died due to alcohol-related traffic accidents, a figure essentially unchanged from 2004; an estimated 254,000 persons were injured in such crashes.
  • The rate of alcohol involvement in fatal crashes is more than 3 times higher at night than during the day; 52 percent of fatal crashes on weekends involved alcohol, an increase of 22 percent in the rate of weekday accidents involving alcohol.
  • The holiday season between Thanksgiving and New Year's Day is one of the deadliest and most dangerous times of the year due to an increase in drunken driving crashes.

The U.S. Department of Labor (DOL) states, "Improper use of alcohol may expose employers to liability under tort, workers' compensation or other laws…an employer may be held liable if a person consumes beverages at a company-sponsored party and subsequently causes a crash." The DOL also advises employers to consult and address state and local laws regarding employers' legal responsibilities when serving alcohol at office events.

Of course, the only foolproof method for employers to avoid any litigation arising from alcohol consumption at holiday parties is not to serve alcohol. But since liquor is served at 86 percent of office holiday parties, according to Workforce Management, the DOL offers employers some tips:

  • Make sure employees are versed in the workplace substance abuse policy, which should address the consumption of alcoholic beverages at office social functions. This policy should be posted, distributed, and explained in advance; employees should be asked to acknowledge in writing that they understand and accept the company's policy.
  • Offer plenty of non-alcoholic beverages at the party as well as liquor.
  • Avoid serving too many greasy, salty, or sweet foods that tend to make people thirsty. Instead, serve foods rich in starch and protein that stay in the stomach longer and slow the absorption of alcohol in the bloodstream.
  • Designate party managers. Assign at least two non-drinking employees the responsibility of monitoring the serving of liquor and implementing the company's alcohol and substance abuse policy.
  • Arrange for alternative transportation. Make special arrangements in advance with taxi cab companies to take home alcohol-impaired drivers.
  • Stop serving alcohol before the party officially ends. Mothers Against Drunk Driving (MADD) suggests cutting off drink service no later than 90 minutes before the party ends. The organization also stresses that coffee cannot sober up drunken guests-only time can.

Other suggestions include promoting and coordinating a designated driver program in advance of the party; issuing each employee at the party a limited number of drink tickets to prevent excess consumption; hiring professional bartenders who have been trained not to over-pour drinks and to recognize (and stop serving) intoxicated guests; and scheduling party activities that shift the focus away from drinking.

Also, employers should consult their insurance providers to make certain that they are adequately covered for risks associated with company-sponsored events.

While there is no formula that guarantees zero liability, attorney Alan Kopit maintains that "keeping employees from driving after drinking at the party reduces potential liability of the business."

It is possible to have a fun and safe holiday party. With careful planning, businesses need not be forced to "pout" and "cry" over costly litigation but instead can welcome the New Year with comfort and joy.

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