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Holiday Parties and an Employer’s Liability

September 12, 2003

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Janet E. Lanyon

During holiday seasons, employers often worry they may expose themselves to liability if employees become intoxicated at a company function and subsequently injure others. Under current Michigan law, an employer is not liable to a third party for injuries caused by an employee who became intoxicated during a company function unless the plaintiff proves the employer required the employee to attend the function, and that there was a foreseeable risk that the employee would consume alcoholic beverages to the point where he would become a risk to others.

In order to establish an employer’s liability for an employee’s actions, a plaintiff must first show that the employee was acting within the scope of his or her employment. In general, voluntary attendance at employer-sponsored social functions has been deemed insufficient to meet this requirement. For example, in Rowe v Colwell, a loan officer was invited to a party by a corporation doing business with his employer. He consumed alcohol during this party as well as during a dinner which the group had at a second location. After dinner, a bank vice president invited the employee to his home to play pool. The employee again consumed alcoholic beverages at the vice president’s home. While driving home, the employee struck and seriously injured a pedestrian. In holding that the bank was not liable for the employee’s actions, the court emphasized that the function was purely social and that the employee was not required to attend. The court also noted that the function was after working hours and that no business was transacted.

Even where an employee is required to attend a function as part of his job duties, an employer may not be liable for injuries to third parties sustained as the result of the employee’s intoxication where the risk of harm to others was not foreseeable. The controlling case on this issue in Michigan is Millross v Plum Hollow Golf Club. In that case, a “caddie master” at a golf club was required by his employer to attend a foundation dinner at the club. During the dinner, liquor was served and the employee became intoxicated. While driving home from work, the employee struck and killed a pedestrian. The court in Millross found that the golf club was not liable for the death, holding that “the special relationship between employer and employee does not of itself require the employer to protect third parties from off-premises injuries, either by supervising the consumption of alcohol or providing alternate transportation.” The decision specifically declined, however, to absolve an employer from liability where the facts establish that there was a foreseeable risk that employees would consume alcoholic beverages to the point where they become a risk to others.

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Article Originally Published: Fall 2003

The information contained in this article is not intended to be legal advice. Readers should not act or rely on this information without consulting an attorney.