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From company party to trial



Holiday EPLI Exposures

Company parties and events can boost morale and support team building, but sometimes things go wrong. Here are some employment practices liability insurance (EPLI) exposures to avoid during work-sponsored parties, events and trips:

Alcohol-fueled errors in judgment

Alcohol lowers inhibitions, which can make people say and do things they shouldn’t in a workplace. Social behaviors that may have been ignored in the past may receive more scrutiny now because of the Me Too movement.

Imagine these scenarios:

  • An employee gets drunk and makes aggressive and inappropriate comments to a colleague. The coworker later sues the company for failing to prevent sexual harassment.
  • Under the influence, a manager begins a romantic relationship with an employee and is rejected. When the company later terminates the employee for cause, the employee sues for wrongful termination and retaliation.

Other places

In addition to alcohol increasing the risk of inappropriate behavior, serious incidents can occur if one worker drives another home or if two or more workers decide to move to another location. According to Orrick, the EEOC filed suit against an employer over allegations that a manager invited several workers to a second location and then sexually assaulted one of them.

Drink and drive

NHTSA says 11,654 people were killed in drunk driving crashes in 2020, many of which occurred around weekends. If an employee leaves your party drunk and causes a motor vehicle accident, the injured parties can sue the company for over-serving alcohol at the party.

Religious discrimination

Holiday celebrations can lead to claims of religious discrimination. For example, let’s say your business is hosting a holiday party. You never call it a Christmas party, but your decorations include a Christmas tree and you plan a secret Santa gift exchange. One of the employees does not want to go because going to a Christmas party goes against his personal religious beliefs. He also objects to alcohol being served on religious grounds. After he decided not to attend, he has been promoted. He is suing for religious discrimination.

Tips for your company party

After lockdowns and cancellations, you may feel like celebrating in person. Here are some best practices to keep in mind when planning your next event:

  • Limit alcohol and serve food. A sober celebration is probably the safest option, but if it’s a no-go at your event, be sure to limit the amount of alcohol. If you serve alcohol, also serve food. According to the California Department of Alcoholic Beverage Control, food can slow the rate of intoxication. High protein, fatty foods are particularly effective.
  • Plan activities. Give participants something to do other than binge drinking.
  • Remind your team of company policies in advance. You should already have clear, written policies regarding sexual harassment, discrimination, and other employment liability issues. Before a party or event, make sure your employees know these policies still apply. Proactive training and reminders are important, especially for managers and traveling employees.
  • Be ready to deal with problems. Hopefully you won’t have any problems, but you have to be ready for anything. Before parties and events, ask a few key leaders to watch for signs of trouble—such as excessive drinking, rude behavior, or fights—and train them on how to respond.
  • Welcome everyone. Create parties that include everyone, regardless of faith, and treat all objections seriously.

Of course you want your employees to have fun at your parties and events. With a few extra steps, you can take control of potential EPLI exposures. BNC offers insurance products and risk management services to protect your business. Read more.




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