Posted by: Professionals In Human Resources Association (PIHRA) | October 23, 2009

Companies Considering Cutbacks on Holiday Parties Get the Gift of Advice


Employment Law Specialist Warns Employers Making Alternative Holiday Celebrations to Be Aware of Liability Issues
By Christopher J. Boman, Fisher & Phillips LLP

The holiday season is an ideal time to thank employees for the year’s hard work and celebrate the successes of the company. But with the relaxed attitude of holiday parties, employers often overlook the legal risks involved in throwing a company bash, especially when alcohol is being served. In addition, it’s no surprise that in today’s economy many employers may be looking for opportunities to reduce costs for their end-of-year celebrations. And while business owners may have good intentions, they often disregard the liabilities involved in hosting a holiday party―liabilities that could get them sued.

Although the economy’s outlook may be more positive, many companies have still had a tough year of layoffs and cutbacks, creating a natural concern for executives wanting to forego an extravagant holiday party. While that in itself doesn’t pose an issue, it’s how employers handle the “alternative” celebration that becomes important. Employers need to be cognizant of the legal liabilities they could face if precautions are not taken before the festivities begin.

Employers should be aware of possible legal issues that could make for an unpleasant event, or even become the target of a lawsuit. Although companies may want to reduce costs, they should take preventative action to avoid legal trouble. Company leaders are encouraged to consider some of the tips below when planning their end-of-year celebrations.

Mixing Layoffs with a Lavish Party – a Holiday Recipe for Disaster?
– If a company has experienced recent layoffs, or one is looming in the near future, consider the message sent by throwing an extravagant party shortly after or preceding an impending layoff. Can you justify the celebration costs when foregoing it could have kept a few staff members employed for a few months? Morale of current staff concerned about additional layoffs could also be an issue, as well as the potential for lawsuits from disgruntled former staff that hear about the party expenses.

Beware if Boss is Supplying the Booze – If business owners host a party at their home to save cash and are serving alcohol, they should be aware of the personal liability they may face if someone drives off from the party drunk. Arrange for a no-cost transportation service for any employee who feels that he or she should not drive home.

Be Cautious if Cutting Out the Professional Bartender – Employers are encouraged to find money in the budget to hire a professional bartender, but if it’s simply not an option employers should ensure all staff enjoying alcohol are 21 and monitor everyone’s alcohol consumption.

Clarify Guidelines if Hosting the Party at Work – It’s recommended that employers avoid hosting a party on company property. If they do opt for this, however, avoid any confusion about compensation by ensuring that employees know the party is voluntary and that people aren’t working. Also make certain everyone knows workplace behavior rules still apply.

Consider Alternative Celebrations – Companies can take a portion or all of the money traditionally spent on the holiday party and donate it to a charity in need. The economy has had a dramatic impact on nonprofits, and the generosity could promote the company’s reputation within the community. Another option is to consider a company potluck or other event that’s still social and fun.

Don’t Assume Signed Releases Mean You’re Off the Hook – Some companies may have considered having employees sign releases for employer liability where alcohol will be served. Such waivers can be challenged in a court of law.

Avoid Offensive White Elephant Gifts – In an attempt to keep a gift-giving tradition inexpensive, companies may encourage staff members to exchange “white elephant” gifts. Remind them to avoid gifts that could be offensive and spark harassment lawsuits or other issues.

 Christopher J. Boman is a partner with the management-side labor and employment law firm of Fisher & Phillips LLP  in its Irvine, Calif. office. With a focus on both preventive counseling and defense of claims, Mr. Boman emphasizes the business and legal objectives of his clients to optimize their compliance in today’s challenging marketplace. He can be reached at 949-851-2424 or



  1. Sound great.
    I am planning on taking a trip this december, but im not sure where yet.
    Anny suggestions?

    Vacation All Inclusive Resorts

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