How to Balance Recreation and Liability When Planning a Company Social Event

Putting on social events for employees is a great way to boost morale and increase staff retention. But there could be legal ramifications to these events. Here are some points to consider.

Good work culture tops most employees’ wish lists (and most employers’, too), especially in a time when employers must compete by offering remote jobs, freelancing, and other worker-centric setups. Company social events such as holiday parties can promote a winning work culture. But mixing business with pleasure comes with risks: successful company events invite an element of social life, as well as the risk of social pitfalls that may be inappropriate, dangerous, or even illegal.

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    Forewarned is forearmed

    Employers and their HR teams must be aware of the risks and potential liabilities associated with company events to protect themselves and their employees.

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    The most prevalent risk comes from inappropriate social interactions, namely, sexual advances among co-workers. Title VII of the Civil Rights Act of 1964 prohibits sexual harassment by an employer, including conduct that is unwelcome and sufficiently severe or pervasive. Though the Act offers no protection as between workers, an employer who fails to provide a safe work environment can run afoul of this federal law.

    Dangerous conduct by employees creates the risk of physical damage to person or property. When an employee is injured at a company event, he or she may have recourse against the employer for unsafe work conditions. An injured third party may also be able to sue an employer for an employee’s actions under Ohio’s social host or dram shop laws or other legal theories, such as the doctrine of respondeat superior (let the master answer).

    Often overlooked, loss of good will is a serious matter and is more likely to happen to employers with undeveloped social media policies. Social media gives employees a platform to post company party interactions, both good and bad, and negative publicity can tarnish any company’s reputation.

    Neutralizing the alcohol factor

    Unsurprisingly, the greatest contributor to risky behavior is alcohol. If you decide to permit alcohol at your company’s social event, consider taking the following steps to mitigate risks associated with alcohol:

    • Distribute drink tickets or set a drink limit for attendees.
    • Skip the liquor—limit drink selection to “softer” alcohols like wine or beer.
    • Make it a cash bar.
    • Close the bar early to limit access to alcohol.
    • Ask bartenders and/or supervisors to be on the lookout for intoxicated attendees.
    • Arrange for transportation to and from an event.
    • Incentivize employees to be designated drivers.
    • Provide hors d’oeuvres to curb alcohol consumption.
    • Limit attendance to 21 and over.

    Accounting for venue

    Incidents are more likely when company events are held off-site. This is due in part to preconceived standards of behavior in a familiar work setting, given that employees are used to behaving professionally in the office. However, keeping things in-house does place a bigger burden on the employer to monitor alcohol consumption and other activities.

    For company socials held on-site, consider hiring a professional bartender or food vendor, and assign supervisors to monitor the festivities. For outside venues, be sure to choose one that sends the right message about the type of event it will be. Consider choosing a restaurant instead of a karaoke bar, for example. Always be sure to confirm that all venues and service providers have the proper licenses.

    Another good way to set standards is with an appropriate dress code. A black-tie affair necessarily invokes a different atmosphere than a business casual event, and in most cases, a clear dress code can nip inappropriate or suggestive behavior in the bud. You should also have a keen eye for decorations, which should be neutral and considerate of the religious and cultural beliefs of your employees—especially during holiday parties.  

    Building the guest list

    First and foremost, employers can avoid the risk of workers’ compensation and/or wage and hour claims by drawing clear distinctions between social events and employment functions. Employers should make it clear to employees that there is no work purpose for the social event and that attendance is always optional. Toward that end, employers should try to schedule events outside of normal work hours and avoid talking business or handing out performance awards during the event.

    Employers should also consider whether to invite guests such as significant others, family members, or general plus-ones. A strictly in-house social lends itself to riskier behavior because of the obvious familiarity that already exists between attendees. A broader guest list, in contrast, can foster a more reserved, conservative dynamic which, in turn, may deter unwanted behavior.

    Employers should also strongly consider omitting their independent contractors from the guest list if the social event is “company only.” An employer’s everyday liability is generally higher for an employee than it is for a contractor, and the main distinction between the two boils down to how the employer interacts with its employees versus its independent contractors. In other words, inviting independent contractors to company events invites potential liability for misclassification of contractors as employees.

    Setting expectations

    Before company events, employees should be reminded that the setting will be social but still professional. Any well-written employee handbook will set this expectation as a matter of course.

    Event policies, for that matter, should be clear and consistent with all other policies. Social media policies, for example, should set consistent standards for posts related to or depicting alcohol and other potentially inappropriate media. To the extent that social media posts are fully public, employers may consider monitoring and requesting removal of posts that may suggest affiliation with the company but fail to adhere to its policies.

    More touch points can be an effective way for employers to reinforce expectations leading up to company events. For example, pertinent sections of the employee handbook can be recirculated to employees via email, or these policies can be discussed at regular meetings, or included on inserts that accompany paychecks.

    Investing in a failsafe: Insurance

    The best-laid preparations can still be undermined. Insurance should be a last line of defense against liability but it may be desirable, even if only for peace of mind. Employers might consider the following policies when budgeting for an event:

    • General event insurance—protects against losses due to injury or damage by insured’s employees or agents.
    • Liquor law liability insurance—covers insured against accidental furnishing of alcohol to underage or already intoxicated patrons.
    • Cancellation insurance—helps cover costs when an event must be cancelled for a variety of reasons.
    • Venue insurance—covers for damage to a location while it is under the insured’s control, effectively insuring against repair costs to the venue.
    • Hired/non-owned auto insurance—provides liability coverage for vehicles rented for the event, as well as auto-related injury or damage to third parties.
    • Employment practices liability insurance (“EPLI”)—covers businesses against claims by workers that their legal rights have been violated.

    EPLI can be a good catchall insurance that might protect employers from losses occasioned by activities that compromise a safe work environment, including sexual harassment, discrimination, wrongful discipline, and wrongful infliction of emotional distress, among others.

    This article is meant to be utilized as a general guideline for company social events. Nothing in this blog is intended to create an attorney-client relationship or to provide legal advice on which you should rely without talking to your own retained attorney first.  If you have questions about your particular legal situation, you should contact a legal professional. Max Julian is an attorney at The Gertsburg Law Firm. Julian’s practice is focused on commercial litigation. He can be reached at mj@gertsburglaw.com or by phone at (440) 571-7541. The Gertsburg Law Firm blog has more than 80 articles on topics covering Employment Law, Consumer Law, and ways to protect your business.


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    • Show Appreciation – Recognize your employees and enhance group dynamics through regularly scheduled appreciation activities like lunches, company cookouts and other activities outside of the office. Learning more about each other on a personal level outside of the work environment can build relationships and respect and, ultimately, teamwork. (Tip: Schedule activities during business hours so employees can’t opt out.)
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    It was a lively discussion and as it unfolded, I was able to pick out three key takeaways from the session that might be of some help in guiding your own workforce strategy.

    1. Recruiting

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    How do you find those A-plus candidates for your business? Think about where your ideal candidate spends her or his time. For instance, it might make sense to browse LinkedIn groups for your particular industry to find potential candidates. Another option? Reach out to local universities or trade associations and put the word out that you’re looking for talent. Lastly, recruiting firms could be an option, but before you engage with one of these firms, think about what you need. Do you want the recruiting firm to handle everything from A to Z, or do you need the firm to simply provide you with a pipeline of candidates, and then let you filter out the prospects yourself?

    2. Interviewing

    OK, so you’ve got a solid list of prospects and now it’s time to start the interview process. Here are a few tips to help improve the interview process that were mentioned:

    • Check the applicant’s ability to follow directions by asking them to phone in the day before the interview to confirm.
    • Potential questions to ask during the interview include: “What did you like/dislike about your last position” and “How would you describe your ideal job?”
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    • Consider putting the candidate through a program to judge their personality profile.

    3. Retaining

    Retaining solid employees is just as important as plugging gaps with new hires. Communication and transparency were two common threads that wove their way through this part of the discussion. For example, spark discussions with current employees by asking things like: Where do you want your career to go? How can we help you get there? What things do you want to be working on? And along those same lines, ensure you’re providing the right amount of feedback and keep a continual focus on coaching employees to be the best they can be.

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    In advance of his workshop focusing on employee retention, development and branding at this year’s BizConCLE, Mind Your Business had an opportunity to sit down with Nate Stansberry of University Tees to find out about the roadmap the company followed to grow from two to 200 employees. Read on below for the X lessons the company learned along the way.

    Lesson 1: Recruit your customers

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    The company learned early on that establishing natural recruiting pipelines is one easy way to find employees. One of these naturally occurring, organic pathways exists with the customers who already are fans of your product and understand what you’re all about. Not only are they already familiar with your product, if they’re customers that means they’re probably fans of yours as well. And if they are fans of the company, that means they’re also likely to bring a positive attitude to their work and help you build a positive culture at your business as well as helping you stay authentic to other customers.

    Lesson 2: You can’t force culture

    Speaking of culture, Stansberry cautioned that this is something that can’t be forced. The people you bring on board must live and breathe your company’s mission. Again, having a native pipeline as described above will help the culture at your business create itself. “Having customers within your organization is vital to growth,” he says.

    Lesson 3: Engage employees for referrals

    You can continue to try to enhance your candidate pipeline by surveying existing employees for referrals (if you decide not to promote from within) when a position becomes available. “Your best people are going to bring in their best people,” Stansberry says.

    Lesson 4: Internships are important

    Internships are another good pipeline companies should consider for growth, he says. It’s also a great way of elevating people to other positions throughout the organization. This demonstrates that there are growth opportunities at your business, which is both a great employee recruitment and retention tool.

    Lesson 5: Find the right fit

    When thinking about advancing the company’s campus managers, it seemed like a natural fit for University Tees to integrate these workers into its B-to-B sales division. Turns out, though, that wasn’t the case because the jobs were too different. Take time to think about the unique talents the members of your staff have and what positions you have available internally to help them build on these strengths.

    Lesson 6: Perfect the interview process

    It’s important to have a consistent process in place when bringing in job candidates. Here’s the template in place at University Tees:

    • First, look in house for potential candidates before opening the door to referrals and a general external search.
    • During the initial interview, dig deeper into the job seeker’s experience and give that person a sense of the company culture and what you’re all about.
    • Next, have the hiring manager perform a “technical” interview that focuses on the job itself.
    • If possible, conduct a “shadowing” session where the candidate meets the team and sees how their role would interact with other roles at the company.
    • Perform a personality assessment, if desired.

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    Learning about how you can perfect your hiring process and efficiently grow your company is just one of the topics that is going to be explored this year during BizConCLE. Click here to learn more and secure your spot today.


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