Published in DRI's In-House Defense Quarterly Winter 2014 Edition
Ignoring cautionary tales from friends, family, television, blogs, and other assorted media, employees around the world inevitably overindulge in holiday spirits at the annual company holiday party. The fortunate among them limit their misbehavior to an Electric Slide or wearing a tie, not necessarily their own, as a bandana. The less fortunate hijack the band’s microphone to give the boss blunt management tips and transform “Frosty the Snowman” into a limerick.
Although potentially entertaining, these overly enthusiastic celebrations can cause human resources issues and put third parties at risk, particularly if the intoxicated employee lands behind the wheel. Employers have long addressed the latter concern by providing cabs or other transportation to get the employees, and anyone they may encounter on the road, home safely. However, is this enough?
Purton v. Marriott International, Inc. (2013) 218 Cal. App. 4th 499, is the most recent example of an appellate court examining potential limitations on an employer’s liability for the intoxicated acts of an employee following a company-sponsored party. This article analyzes that decision to evaluate the extent to which courts are encouraging employers to revive Prohibition for office holiday parties.
MARRIOTT CASE
In December 2009, the Marriott Del Mar Hotel held its annual holiday party to “thank” its employees and management for their loyalty and service. Dennis Fraher was the hotel’s general manager, Joseph Emma was the assistant general manager, and Sarah Hanson was the general manager of the hotel’s restaurant. Emma was also Hanson’s immediate supervisor. Prior to the party, Emma and Hanson decided each attendee would receive two drink tickets, and they planned to serve only beer and wine.
Michael Landri, a hotel bartender, was among the hotel employees at the party. Before leaving for the party, Landri drank a beer and a shot of whiskey at his home. He also brought a five-ounce flask filled to some degree with Jack Daniel’s Whiskey. Page Savicki drove Landri and three others to the party, and they arrived around 6:15 p.m.
Hanson was the only working bartender at the party. At some point in the evening, she had a bottle of Jack Daniel’s brought to the bar from the hotel’s liquor supply which Landri used to refill his flask at least once. At about 9:00 p.m., Landri, Savicki, and several others left the hotel. Landri did not consume any alcohol after leaving the party.
There was no consensus as to who drove. Although Landri, Savicki, and one other person recalled Savicki drove home, a fourth person indicated Landri drove. Nevertheless, the group arrived safely at Landri’s house.
Twenty minutes later, Landri decided to drive an intoxicated coworker home. Landri then rear-ended Dr. Jared Purton’s vehicle while driving over 100 miles per hour and killed Dr. Purton. Following the accident, Landri was determined to have a blood-alcohol level of 0.16, twice the legal limit in California. He pleaded guilty to gross vehicular manslaughter while under the influence of alcohol and received a six-year prison sentence.
Thereafter, Dr. Purton’s next-of-kin filed a wrongful death action against numerous defendants, including Landri and Marriott International, Inc. They alleged Marriott held the party to improve relations between its employees and as a fringe benefit to promote continuity of employment. As for Landri, Dr. Purton’s family claimed he possessed an above-average education regarding the effects of drinking alcohol considering his occupation as a bartender. Despite this specialized knowledge, Landri became extremely intoxicated at the party. He was then allowed to leave the hotel and drive thereby leading to the collision with Dr. Purton’s vehicle.
Marriott moved for summary judgment arguing any potential liability under the doctrine of respondeat superior ended when Landri arrived home because he was not acting within the scope of his employment. The trial court agreed with Marriott, and the plaintiffs appealed.
THEORIES OF LIABILITY AGAINST EMPLOYERS
At common law, employers generally are not directly liable to a third party for injuries an intoxicated employee causes when the employer furnished the alcohol. Some jurisdictions have on occasion found exceptions to this rule when the employer knew the employee would consume alcohol, either was or would become intoxicated, and would probably act in such a manner while intoxicated as to create an unreasonable risk of harm to third persons.
Several states have enacted legislation that gives victims of drunk driving accidents a right of action against the person who sold or furnished the alcohol to the intoxicated driver. However, the contention that an employer is more akin to a commercial vendor than a social host because the party resulted in business related benefits to the employer has been uniformly rejected on the grounds Dram Shop Acts are not intended to apply to the social furnishing of intoxicating liquors.
Many states have also considered whether an employer could be held vicariously liable for its complicity in the negligent acts of its employees. Under the doctrine of respondeat superior, an employer may be held vicariously liable for torts an employee commits within the scope of his employment. The modern justification for respondeat superior is a deliberate policy allocating risk. The analysis focuses completely on the actions of the employee, without any consideration of the acts of the employer. Thus, to recover under this theory, a plaintiff must establish the following two elements:
- a negligent act of the employee, or in other words, a breach of a duty that is the legal cause of plaintiff’s injury; and
- the negligent act was within the employee’s scope of employment.
Some states have sought to impose liability based upon the doctrine of respondeat superior under facts like the Marriott case, while others have found the doctrine simply does not apply because the negligent “act” as defined is not considered within the “scope of employment.”
THE MARRIOTT HOLDING
In Marriott, the California Court of Appeal did not address the viability of a cause of action based on the direct negligence of the employer because the plaintiffs abandoned this theory on summary judgment. However, the court reversed the granting of summary judgment, finding the trier of fact should determine whether Marriott was liable based upon respondeat superior.
The court held it was reasonable a trier of fact could find Landri acted negligently by becoming intoxicated at the party, and this act was within the scope of his employment and proximately caused the car accident. Assuming the trier of fact found Landri acted negligently, it could also conclude his negligent act occurred within the scope of employment “because the party and drinking of alcoholic beverages were a conceivable benefit to the employer or were a customary incident to the employment relationship so as to render the employee’s act off drinking to be within the scope of employment.”
The court reviewed case law which clearly establishes an employer may be found liable for its employee’s torts if the proximate cause of the injury occurred within the scope of employment. The court felt it was irrelevant that the foreseeable effects of Landri’s negligent conduct occurred when he was no longer acting within the scope of his employment. Thus, unlike Arizona and Illinois, California does not believe the accident itself must occur at the time the employee is acting within the scope of his employment.
Under California law, respondeat superior liability attaches if the “act” that caused the employee to become a danger was undertaken with the employer’s permission and provides some benefit to the employer or constitutes a customary incident of employment. Because there was evidence the party was a “thank you” for Marriott employees for “employee appreciation” and “team building,” the court reasoned a trier of fact could reasonably conclude the party and drinking “benefitted Marriott by improving employee morale and furthering employer-employee relations.”
Although the court acknowledged the “coming and going rule” would generally deem an employee to not be acting within the scope of employment while traveling to and from work, the rule did not apply in this case because the court focused on the act on which vicarious liability is based (the intoxication), rather than when the act resulted in injury. Perhaps more surprising though, the court did not halt potential liability when the employee arrived home safely from the Christmas party. The court stated there was no reason to cut off the employer’s liability as a matter of law simply because the employee made it home since the employer created the risk of harm at its party by allowing the employee to consume alcohol to the point of intoxication.
The court’s ruling raises interesting questions about the concept of personal responsibility and reflects a growing intolerance of drunk drivers and those perceived to enable drinking and driving. Marriott logically questioned how the company was supposed to control an employee’s actions when the employee was in his own home. The court, however, was not convinced and instead focused on Marriott’s missed opportunities to control Landri’s consumption of alcohol, thus leaving Marriott potentially exposed to liability for as long as Landri remained intoxicated.
RECOMMENDATIONS TO MINIMIZE EXPOSURE
For employers who cherish certainty, banning alcohol from the holiday party is the best way to eliminate potential liability in this area. People can certainly have fun without drinking alcohol, particularly if the party is held at a unique venue or includes interactive entertainment such as mock awards, creative gift exchanges, or satirical videos.
If alcohol is incorporated in the celebration, several steps can be taken to minimize risk. Every employer should have a clear and coherent policy on conduct in the workplace which includes examples of unacceptable behavior, such as getting smashed at a work event. Before the party, staff should be reminded of these standards of behavior and told intoxication will not be condoned and could be grounds for discipline.
The party should never include activities that encourage the excessive consumption of alcohol. Drinking games should be absolutely prohibited. Use a professional bartender/server who is trained to serve alcohol responsibly and is directed not to serve anyone who appears intoxicated. Ban BYOB and other outside alcohol, avoid open bars, and limit the availability of stronger mixed drinks and shots. Stick to beer, wine, and other drinks with lower alcohol content and make sure water and non-alcoholic beverages are easily available. Including a substantive meal also helps mitigate the effects of alcohol.
Limiting the number of alcoholic drinks per person is a difficult system to enforce. As an alternative, designate staff with some measure of authority to monitor the consumption of alcohol to ensure people are not served to or beyond the point of intoxication. Including families in the party can also be beneficial as most people tend to consume less alcohol at family-oriented events.
CONCLUSION
The Marriott decision puts employers who serve alcohol at company functions on notice that it may not be sufficient to simply send intoxicated employees’ home with a designated driver or in a cab. These traditional precautions against drunk driving although well-intended, still may not limit the employer’s liability which can continue for the duration of the employee’s intoxication. As such, employers must proactively moderate the consumption of alcohol at holiday parties and other employer-sponsored functions to limit their potential exposure to litigation.
David Burke is a shareholder in our San Diego office. His areas of practice include appellate law, the defense of healthcare professionals and general civil litigation. Mr. Burke may be reached at (619) 238-1712.
