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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    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.
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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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    We (digitally) sat down with four HR experts from our COSE Expert Network to find out what it takes to recruit this generation, how to make your business millennial employee friendly, and how to retain these employees once you have them on board. 

    Taking part in this digital roundtable are:

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    • Julie Sumner, Monarch Endeavors LLC
    • Tameka L. Taylor, Compass Consulting Services LLC

    Q: For a business that wants to find millennial staff, does it make sense to turn to social channels?

    Dimoff: Yes, social channels to recruit millennials is very effective. They believe if you are utilizing “Their forms of communication” that it also exists in your company culture and work processes. Secondly, you also have a much greater number of millennials that you will make contact with and therefore have a bigger pool to choose from.

    Sumner: Yes, it makes sense to turn to social media channels because that is where millennials seem to spend most of their time. However, most employers stick to the more professional social media websites, such as LinkedIn. This is recommended as there is a great deal of information that can be garnered from a typical personal social media profile that could put an employer at risk for claims of discrimination. For example, a quick look at a Facebook profile will potentially reveal a candidate's gender, race, age, marital status, whether the candidate has any children, whether the candidate has a disability, veteran status, religion, etc.  These are all protected characteristics that employers cannot use to make hiring decisions, so just by uncovering that information, they may be putting themselves at risk for claims of discrimination or unfair hiring practices.

    Taylor: First, let me just preface this by saying this is not stereotyping millennials, but rather, just thinking about potential patterns. Yes, businesses looking for millennials have to go to where millennials are and not wait for them to come to you. You need to be on the latest social channels because once millennials see other generations on social channels they often turn to other channels.

    Q: How do you make your business “millennial friendly?”

    Taylor: Millennials like other generations want opportunities to grow. It's important to provide them with opportunities for growth and learning.

    They want to be taught new skills so they continue to grow professionally.

     If it's classes or workshops it doesn't have to happen in person for them.  Provide them with opportunities for them to try new things and be in charge of projects.

    They want to make a difference in the business and the world.  Millennials want opportunities to be socially conscious and active.

    It's important for there to be conversations about the communication norms and guidelines within the company.  For example, when is it appropriate to email, text, use social media, etc.

    Also, flexibility is helpful for millennials. That flexibility includes when, where and how they perform their jobs. Sometimes those of us who are not millennials decide that the things need to be done a specific way or our way and that's not necessarily true. As long as the task or job get done timely, effectively and efficiently then it doesn't matter if it's done our way or not.

    Sumner: There are several things a business can do to become more "millennial friendly,” such as using Twitter and other social media accounts to reach the millennial audience. The types of posts do not always have to be related to open positions. Many millennials care if their employer is environmentally conscious, involved in the community, is trying to reduce its carbon footprint, etc. Employers can use social media to show millennials that they do these things. Employers can also post jobs on social media sites; however, given the caveats above, the candidate should then be directed to an application site or process that does not permit the employer to obtain information about protected characteristics.

    Dimoff: You need to have a more in-depth understanding of what attracts, motivates and keeps millennials at your company. They are highly motivated and expect certain criteria in their work environment. If these aspects are truly understood, you can create one very powerful millennial workforce and the opposite also can happen, which is negative. Next, sit down with your current millennials at your worksite and ask them to help create a stronger and more attractive millennial work environment. This rarely takes place in many worksites who need to make these specific transitions. Lastly, there are outside consulting services now that can help you put this total millennial package together.

    Q: When it comes to the retention of millennial staff, what should small businesses keep in mind?

    Dimoff: Once again, you need to have a more in-depth understanding of what motivates and keeps millennials engaged at your company. They are highly motivated and expect certain criteria in their work environment. If these aspects are truly understood and provided you can create a millennial workforce that wants to remain and help themselves and the company both grow and prosper. Millennials feed off having “ownership and input” in each and every aspect of their workplace involvement.

    Taylor: They need to be provided with opportunities to grow and develop. Also, they should be provided with recognition and feedback. They need to understand the value that the small business sees that they bring to the table while contributing to the organization. So, they like all other employees need to be and feel included, valued and respected within the organization.

    Sumner: More than ever, millennials seem to be more concerned about work-life balance than the salary they are making. This can be advantageous to small businesses because, although they may not be in a position to pay the most (or even a competitive rate), they may be able to offer other incentives that will be attractive to millennials, such as telecommuting; flexible work schedules; volunteer opportunities; environmental initiatives; opportunities for leadership, collaboration, and advancement; and one-of-a-kind experiences (such as sky-diving, rope courses, scavenger hunts, etc. and other company-sponsored activities where employees can bound over trying something new and unique). One of the biggest things to remember is that millennials do not just want to punch a timecard and go home at the end of the day. Most want to be passionate and inspired about what they do and feel as though they are making a difference. Fuel that fire and you'll have a better chance of retaining the heat for years to come.

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