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.

    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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    Cultivating a team culture in your business helps keep your employees focused on the mission of the organization instead of worrying about group dynamics. A positive team culture can also do wonders for employee morale and productivity. We spoke to Tameka L. Taylor, Ph.D, CDE, president of Compass Consulting Services, LLC, who shared her tips on how to keep your team happy:

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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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    Last month, we discussed 36 possible warning signs of workplace violence. While none of the behaviors I wrote about are absolutes or mean the person exhibiting them will become violent, you should be aware of the signs. While every person and every situation is different, you need to be able to effectively and safely handle any people or situations that may need attention.

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    All threats or changes in personality or behavior must be taken seriously. If you notice any threatening behaviors, you should alert appropriate personnel and human resources, if your business has an HR department. Always treat the person with respect when talking with them. The goal is to avoid any escalation.

    Employers have a responsibility to protect employees from outside threats as well as inside ones. No matter the size of your business, you should always:

    • Have a clear, written policy that communicates zero tolerance toward workplace violence in any form;
    • determine in advance what discipline will be taken against employees who threaten or take violent action in the workplace, and follow through if such threats arise;
    • create a management team trained to recognize the warning signs of potential violence;
    • alert your employees about what constitutes workplace violence, including destruction of property and implied threats of violence, and encourage them to report these incidents immediately;
    • have a reporting system (e.g., an anonymous hotline) to let management know about suspicious or threatening behaviors; and
    • learn to recognize employee behaviors that contribute to workplace violence, such as emotional disturbance and substance abuse.

    How to address a potential threat

    Workplace violence training can be helpful. There are firms, such as mine, that offer workplace violence training for managers and employees. Learning the warning signs and how to properly and effectively deal with them can mean the difference between a violent and a non-violent outcome.

    Here are four tips for dealing with threatening or violent behavior.

    Tip No. 1: Assess the threat. If you find yourself in a threatening situation, try to remain calm. Do not confront the person or try to be a hero. Does the employee have a history of erratic behavior? What was the tone of the threat? How specific was it? An employer should weigh all facts in order to assess the seriousness of the threat. If time permits, consider involving a forensic psychologist or an outside investigator.

    Tip No. 2: Implement security measures. If a credible threat is identified, take steps to promptly implement security measures. These may vary depending on the circumstances, including preexisting security in the workplace, the nature and seriousness of the threat, and the employee's behavioral history.

    Some immediate steps you can take include changing access codes, changing or adding locks, hiring outside security, contacting law enforcement, altering other employees, lockdowns, etc.

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    Tip No. 4: Help protect confidentiality. Provide a confidential way for employees to complain or to report any unusual or threatening behaviors.

    If you do find yourself in a violent or threatening situation, try to signal to someone to call the authorities. Keep talking to the person and try to keep them calm. Look them in the eye and treat them with respect.

    If you are the employee's supervisor, consider various levels of discipline depending on the severity of the threat. If the threat involved a weapon, the employee needs to be immediately removed, and perhaps fired and prosecuted. However, a less severe threat may warrant different action. For example, a trivial or minor statement not intended as a threat by one employee, but perceived as one by another employee, might be resolved by separating the two employees involved for a period of time. If you decide to terminate the employee but feel threatened, you can hire an outside firm to conduct an “armed firing” where they will come in and make sure the employee does not cause any problems while they are removed from the premises.

    Following up

    Following a threatening or violent incident, you should offer counseling services to anyone involved. People may be traumatized and they will experience a range of emotions, so mental health resources are important. Your insurance company may be able to recommend psychiatric resources to help cope with trauma. Depending on your policy, they may pay for treatment.

    There are organizations that may be able to help, such as:

    Being prepared and informed can go a very long way in preventing a workplace violent situation or lessening the impact of an actual threat.

    President, SACS Consulting & Investigative Services, Speaker, Trainer, Corporate Security Expert Timothy A. Dimoff, CPP, president of SACS Consulting & Investigative Services, Inc., is a speaker, trainer and author and a leading authority in high-risk workplace and human resource security and crime issues. He is a Certified Protection Professional; a certified legal expert in corporate security procedures and training; a member of the Ohio and International Narcotic Associations; the Ohio and National Societies for Human Resource Managers; and the American Society for Industrial Security. He holds a B.S. in Sociology, with an emphasis in criminology, from Dennison University. Contact him at mailto:info@sacsconsulting.com.


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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

    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?”
    • Lengthen the in-person interview. The longer it goes, the better the chance is you’ll see the candidate’s true personality come out and you’ll be able to ascertain how good an internal fit they will be to your team.
    • 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.

    Obviously, over the course of the 2-hour session there was a lot more ground that was covered than this. If you’re interested in learning more, consider looking into the COSE Strategic Planning Course, in which issues such as workforce development and acquisition are explored in depth. For more information, contact Adina Magda at amagda@gcpartnership.com or at 216-592-2379.

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