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Party + Alcohol = Harassment + Liability

by Steve Bruce

Sexual Harassment at Social Functions

Courts in many states have found that unwanted sexual advances, exhibitionism, improper sexual touching, and sexual innuendo – actions often reported at office parties – can constitute sexual harassment.

For example, in a case where a supervisor followed an employee into the ladies’ room and raped her at a company dinner, a court ruled that…

  • The dinner was business-related
  • The employee had felt compelled to attend
  • The employer had allowed the excessive consumption of alcohol
  • The employer was liable

The supervisor went to jail for rape – and the employer paid a great deal in damages (including punitive damages) to the injured worker.

Limiting or controlling alcohol consumption may aid in avoiding harassment episodes since overconsumption of alcohol is a factor in many harassment claims arising out of office parties.  In addition, employers may want to reiterate to employees that the company’s anti-harassment policy applies to company-sponsored social situations.

Liability for Injuries

If an employee is injured during an office social event, the injury may be covered by workers’ compensation.  However, many state workers’ compensation laws contain recreational activity exceptions, so that injuries incurred while participating in voluntary recreational programs, including athletic events, parties, and picnics, are excluded unless the event is sponsored by the employer and required for employees.

If an incident is not covered by workers’ compensation, the employee may be able to sue the employer for negligence.

For example, a young woman was rendered quadriplegic during an office party when two co-workers attempted to throw her into an indoor swimming pool.  The employer initially defended the case on the grounds that the incident was covered by the state’s workers’ compensation statute – but the court said the action was excluded from workers’ compensation by the “horseplay” exception.  The woman sued in court, and the employer eventually settled with her for more than $6 million.

Note: Depending on the circumstances, an employer may be better off if an injury is covered by workers’ compensation.  If the injured employee can prove that the employer’s negligence was the cause of the injury, the damage award provided by workers’ compensation will be much smaller than what the employee might be awarded in a lawsuit. If the employee, and not the employer, caused the injury, workers’ compensation, if applicable, would cover the employee’s medical costs and lost wages.  However, a lawsuit might provide no compensation to the employee for the injury.

How about your social activities policy?  Detailed?  Up to date?  Our editors estimate that for most companies, there are 50 or so policies that need regular updating (or may need to be written.)  It’s easy to let it slide, but you can’t afford to back-burner work on your policies – they’re your only hope for consistent and compliant management that avoid lawsuits.

– end of article

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