EPLI Exposures: From Company Party to Lawsuit

EPLI Exposures: From Company Party to Lawsuit

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

Alcohol-Fueled Errors in Judgement

Alcohol lowers inhibitions, which can cause people to say and do things they shouldn’t in a workplace setting. Social behaviors that might 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 coworker. The coworker later sues the company for failing to prevent sexual harassment.
While under the influence, a manager initiates a romantic relationship with an employee and is rejected. When the company later fires the employee for cause, the employee sues for wrongful termination and retaliation.

Second Locations

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

Drinking and Driving

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

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Religious Discrimination

Holiday celebrations can lead to claims of religious discrimination. For example, let’s say your company hosts a holiday party. You never call it a Christmas party, but your decorations include a Christmas tree and you’re planning a Secret Santa gift exchange. One of the employees doesn’t want to go because attending a Christmas party goes against his personal religious beliefs. He also objects to the fact that alcohol that will be served on religious grounds. After he decides not to attend, he’s passed up for a promotion. He sues for religious discrimination.

Tips for Your Company Party

After lockdowns and cancelations, you may be eager to celebrate in person. Here are some best practices to remember as you plan your next event:

Limit the alcohol and serve food. A sober celebration is probably the safest option, but if that’s a no-go at your event, make sure you limit the amount of alcohol. If you are serving alcohol, also serve food. According to the California Department of Alcoholic Beverage Control, food can slow down the rate of intoxication. High-protein, fatty foods are especially effective.
Plan activities. Give attendees something to do other than drinking to excess.
Remind your team of company policies ahead of time. You should already have clear, written policies regarding sexual harassment, discrimination, and other employment liability issues. Before a party or event, make sure your workers know that these policies still apply. Proactive training and reminders are important, especially for managers and travelling employees.
Be ready to manage issues. Hopefully, you won’t have any problems, but you need to be ready for anything. Prior to parties and events, ask some key leaders to stay alert for signs of trouble – such as excessive drinking, lewd behavior or fights – and train them on how to respond.
Welcome everyone. Create celebrations that are inclusive of everyone, regardless of faith, and treat any objections seriously.

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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 company. Learn more.