A Legal Guide to Holiday Parties

Alas, the holiday season is upon us!  It’s time to celebrate the successes of the prior year with a festive holiday party, where employees can let off steam, socialize and spread cheer.  So, who should you contact first? A caterer… or a DJ… or your friendly Chicago business lawyer?  Although it may not sound like the most fun way to kick off celebrations, calling your company’s lawyer to discuss legal guidelines and potential liability pitfalls may be a good idea.  We don’t mean to be scrooge and kill the fun, but times have changed.

To ensure that your holiday party is memorable for the right reasons, this guide may help understand some concerns are and how to avoid potentially troublesome situations.


Serving alcohol during holiday parties is always a contentious subject. On one hand, the safest choice is not to provide alcohol to your employers at all.  On the other hand, you don’t want to be known as the Grinch who stole the holiday spirits. There are two legal theories that govern an employer’s liability during social events. The first is the doctrine of “Respondeat Superior”, which states that an employer is responsible for the action of employees performed within the course of their employment.  The second doctrine is the “Social Host Liability Laws.”  In the state of Illinois, this law places the responsibility on any adult who provides minors with access to alcohol for the injuries sustained by the minors or others as a result of his or her intoxication. Both of these doctrines may mean that you are accountable for your employees’ behavior even after they leave the party. So, how do you avoid liability and still have fun at a holiday party?  Separate, Prevent, Supervise!

Separate the event from your business as much as possible  to make it clear that this is a social, not a business event.

  • Ensure that your employees understand that the party is voluntary. The courts are more likely to find that the event constituted a work activity if the attendance is mandatory.
  • Hold your party offsite and during non-business hours. Not only does holding the party offsite further remove it from the purview of employment duties (and therefore from your liability), but a separate venue will provide professional bartenders, who will help control the consumption of alcohol by the guests. In addition, this move may shift potential liability to the venue.

Prevent excessive drinking:

  • Hire professional bartenders. If the party must be held at the office, do not let employees pour their own drinks. It is also a good idea to stop servicing alcohol an hour before the end of the party.
  • Ensure that bartenders check IDs before serving alcohol. No minor should be allowed to consume alcohol at the party.
  • Limit alcohol consumption. Institute a two-drink maximum policy or restrict the liquor options to wine, beer or cocktails. As soon as you hear the crowd chanting, “Shots! Shots!” divert attention to your company’s amazing performance in Q3.
  • Food! Cater snacks or provide a full sit-down meal to ensure that the attendees are not drinking on empty stomachs.

Supervise your employees:

  • Designate “spotters. Ask members of the management to be on the lookout for people who have had too much to drink and require assistance getting home.
  • Block a number of rooms at a nearby hotel. This will limit how far your employers have to travel after the party.
  • Provide a transportation option to and from the venue. Encourage employers to use company-sponsored transportation to prevent the instances of DUI. Alternatively, provide phone numbers for local taxis or remind your guests to download ride-sharing applications on their phones (who doesn’t have Uber or Lyft nowadays)?.

Sexual Harassment:

Although we all like to think of holiday parties as innocent, festive fun, they can be perfect grounds fora potential sexual harassment suit. What may seem innocent to one, might constitute a criminal act to a jury of twelve. Recently, sexual harassment claims have arisen out of office party incidents that included graphic flirting, an extended embrace, or comments about a worker’s attire. Several courts have ruled that allegations of offensive comments and unwelcome touching at office parties are only sufficient to state a claim of a hostile work environment under “Title VII of the Civil Rights Act” if they are coupled with evidence of continuous harassment at the office. However, even an isolated episode occurring at a holiday party may be severe enough to establish a claim of an offensive work environment. So, how do you avoid a potential sexual harassment allegation? Educate, Include, Supervise, Investigate!

  • Educate about sexual harassment. Remind employees of the company’s sexual harassment policy. Inform them in advance that this policy extends to all work-sponsored events, such as the holiday party. Managers should understand that they are expected to not only behave professionally but serve as models for other employees.  Avoid potentially offensive entertainment and suggestive gifts.  Use common sense!  A night of karaoke is a great way to entertain a crowd. A burlesque dancer is not.
  • Include spouses in the festivities.  Extend the invitation to spouses and children (if appropriate). This will diminish the likelihood of inappropriate behavior and probably even alcohol consumption.
  • Supervise: Designate “spotters.” In addition to checking for intoxication, require that the designated managers supervise the guests to prevent a friendly encounter from escalating into inappropriate behavior.
  • Investigate:  Conduct a thorough internal investigation as soon as the allegations are made. A thorough investigation on the part of the employer goes a long way in decreasing or eliminating the employer’s liability when the allegations arise.

Liability Insurance:   Now is a good time to contact your friendly insurance agent and discuss your company’s general liability insurance coverage. It is important to understand whether your coverage extends to the “off the clock” social events, or occasions where alcohol is served. Does your insurance protect you from third-party liability claims? What are any exclusions or limitations?  Consider purchasing an Employment Practices Liability Insurance (“EPLI”).  An EPLI policy protects business from claims arising out of discrimination, emotional distress, sexual harassment, and other work-related issues. Some EPLI policies cover third-party claims made by non-employees, such as vendors or clients, arising out of incidents that occurred during a company’s event. This policy may also protect in cases where something like an adorable video of a client doing the Macarena goes viral and damages his reputation.

Follow these helpful tips from experienced Chicago business lawyers for a fun and safe holiday party.