The Holiday Party Is Over But Is an Employer’s Potential Liability?

As the holidays roll around, so too do company parties designed to celebrate the season and thank employees for their work during the past year. Oftentimes these festivities include alcohol. However, a recent Appellate Court decision may have California employers rethinking their holiday plans, or else risk potential liability for any harm caused by an employees' intoxication – even after the party is over. (Purton v. Marriott International, Inc. (2013) 218 Cal. App. 4th 499.)

In December 2009 a Southern California Marriott hotel held its annual holiday party. Like many other companies and organizations, Marriott provided alcohol to its employees at the party. Although each of the employees was only provided with two drink tickets exchangeable for beer or wine, the hotel's management was lax in enforcing any alcohol limits. One employee in particular had a beer and a shot of whiskey prior to the party and then drank from a flask at the party. He was even provided refills of his flask by the hotel's manager from the hotel's liquor supply.

Despite his inebriation the employee managed to return safely home. However, about 20 minutes later and without consuming any additional alcohol, the employee left home to drive another intoxicated co-worker home. While traveling in excess of 100 miles per hour and with a blood alcohol level at twice the legal limit, the employee collided with another vehicle, killing the driver. He pleaded guilty to gross vehicular manslaughter, and was sentenced to six years in prison. The family of the decedent brought a civil action against the employee and Marriott.

Generally, an employer can only be held liable for harm caused by an employee's wrongful act if that act occurs within the course and scope of the person's employment duties. Based on this recognized principal of vicarious liability, Marriott argued that the employee was not acting within the course and scope of his employment when driving his vehicle; furthermore, once the employee had returned safely to his home and Marriott no longer had any right or ability to control the employee's conduct, any subsequent acts were purely personal and outside the scope of liability. The trial court agreed, granting summary judgment for Marriott. The Court of Appeal, however, reversed, and in so doing extended the previously understood limits of employer vicarious liability.

Rather than constraining an employer's potential liability to harm that occurs while an employee is acting within the course and scope of their employment, the Purton court held that an employer can be found liable if the proximate cause of the accident, i.e. the employee's intoxication, occurs within the scope of employment. That is, an employer's liability is not determined by when the accident occurred, but why it occurred. Accordingly, the court stated, "[i]t is irrelevant that foreseeable effects of the employee's negligent conduct (here, the car accident) occurred at a time the employee was no longer acting within the scope of his or her employment."

Furthermore, the court found no legal justification for terminating an employer's liability as a matter of law "simply because the employee arrived home safely from the employer hosted party."

Ultimately, the Purton court concluded that an employer's potential liability would continue until the risk that was created within the employment context was fully extinguished – that is, until the employee is completely sober.

So what is an employer to do? The Purton court enunciated a few measures that can be taken to reduce exposure, including establishing and enforcing a strict limitation on the number of drinks, prohibiting employees from sneaking in alcohol, serving drinks for only a limited time period of time, and serving food at the party. Clearly, however, the only way to truly eliminate any risk of liability is to ban alcohol at company functions. Otherwise, California employers may find themselves exposed to liability for their employees' actions long after the party is over and the employees are home; indeed, until all employees have settled their brains for a long winter's nap.