The company holiday party is an opportunity for the company to recognise, celebrate and reward employees’ hard work over the past year. Employers, however, face challenges in planning and managing such events. Many of the problems arise from over-drinking. Over-drinking may lead to accidents from falling or driving home, inappropriate sexual conduct, and fights between colleagues. Not only are such incidents unpleasant but they may leave the employer with financial liability for the loss or damage caused by them: a nasty “hangover”.

A case from earlier this year in BC serves to remind us of the horrendous damage caused by over-drinking, both in terms of the legal and human resources costs. The case, van Woerkens v. Marriott Hotels of Canada Ltd., 2009 BCSC 73, involved sexual misconduct at a holiday party between a senior manager and subordinate employee, both of whom were intoxicated. The case illustrates that having policies in place is important but is only a start. It is also important that the leadership or management of the company are committed to ensuring the policies are followed.

In the case, the plaintiff was the Director of Sales and Marketing at a Vancouver hotel operated by the employer. He was the second most senior employee at the hotel and had 22 years of service with the employer. The employer had a sexual harassment policy but not a policy setting out expectations for conduct at workplace social events. The employer did, however, have some admirable practices: the holiday party was held at a different hotel than the regular work place of the employees; the bar was staffed by employees of the second hotel; the employer arranged for the senior managers to act as drinks monitors; the employer’s stated practice was to provide one ticket to each employee for a complimentary drink and otherwise provide a cash bar; and the employer offered taxi vouchers and discounted hotel rooms for those employees who had consumed alcohol.

At the holiday party, the plaintiff and the acting general manager acted as hosts and masters of ceremonies, and had the responsibility to supervise the party. The acting general manager and another manager were responsible for distributing tickets for the complimentary drink. Rather than dispense one ticket to each employee, however, they dispensed the tickets liberally, which led to a number of employees becoming intoxicated. At one point during the party, the plaintiff, the acting general manager and a third subordinate employee were observed dancing suggestively. Witnesses described all three as being drunk.

One employee hosted an “after-party” in her hotel room, which was stocked with alcohol. A number of employees attended, including the plaintiff and the subordinate employee. In the suite, a few guests saw the plaintiff touching the subordinate employee in a sexual manner. The latter was so drunk by this point, she could not later recall what had happened.

The employer maintained that the plaintiff had engaged in inappropriate sexual touching. In addition, the employer maintained that as one of the senior leaders at the party, the plaintiff had an obligation to monitor the atmosphere of the party to ensure that risk to the employer was minimized. Instead, he created liability for the employer by allowing excessive consumption of alcohol by others, engaging in inappropriate dancing during the party, and condoning an “after-party” where additional drinking occurred. Such behaviour, according to the employer, showed a serious lack of judgment, constituting serious misconduct and grounds for dismissal for cause.

The plaintiff sued for wrongful dismissal, denying completely that he had engaged in any sexual conduct. His evidence was that the subordinate employee had propositioned him, but that he had spurned her. After a nine day trial, the BC Supreme Court rejected the plaintiff’s version of events, and dismissed his wrongful dismissal action. In particular, the court found that the plaintiff had sexually harassed the subordinate employee by touching her in a sexual manner when he knew she was highly intoxicated, and in by his subsequent communications to her. Although the sexual misconduct occurred at an after-party, the court held that the event was still cloaked as a workplace activity for liability purposes because the after-party followed the holiday party, took place in a hotel operated by the employer, and was attended by employees. Finally, the court held that as a senior manager, the plaintiff had a positive duty to protect staff from offensive conduct and to protect the employer from exposure to liability.

Ultimately, the employer was successful, however, not before there had been a substantial “hangover”. The events caused embarrassment to all three employees involved, so much so that the subordinate employee’s name was not disclosed in the decision. The events ended the 22 year career of the plaintiff, and led to the most senior manager at the hotel being fired for cause. The employer had to engage in a lengthy and expensive lawsuit, and there was also a potential liability to the subordinate employee. While this employer had many good practices or precautions in place, ultimately problems still occurred because the senior managers did not enforce the policies, nor set a good example themselves; thus this case is a good reminder to other employers that policies alone will not prevent problems.

Here are some tips for employers to minimize the risk of misconduct arising from intoxication:

• Have policies in place setting out expectations of conduct at workplace social events, and consequences. In particular, have a harassment policy that clearly states that the policy extends to social events. Remind employees of the policies before the party; and that the party is a work-related activity.
• Remind supervisors and managers that they are expected to set the standard for professional behaviour at the party. Remind them also of their duty to the employer to avoid risk and liability. Encourage, and if necessary direct, supervisors and managers to set a good example by remaining sober.
• Hire professional bartending staff to handle distribution of alcohol, and provide the staff with the authority to refuse to serve drunk employees. Do not permit employees to distribute alcohol.
• Encourage responsible drinking, and offer food and non-alcoholic drinks.
• Limit the opportunity for over-drinking. Consider limiting alcohol to beer and wine, or at least prohibiting shots or doubles; and perhaps offer limited complimentary drinks and have a cash bar.
• Close the bar one hour before the event’s end-time.
• Designate one or more party monitors from the senior management team, perhaps one of each gender, who will agree to remain sober and take action if necessary. Provide the managers with authority to direct intoxicated employees to go home.
• Provide transportation or taxi vouchers to employees. Remove keys from any employee who is considering driving after drinking.
• Do not offer an “after-party” location. If the party is at a hotel and some employees are staying over, discourage them from using their rooms to continue the party. Supervisors and managers should not go to an employee’s room.