‘Tis the season to be jolly. While you are enjoying a cup of hot chocolate and planning this year’s office party, don’t forget to take a moment to assess the potential legal liability of company-sponsored holiday festivities. As the Seventh Circuit Court of Appeals aptly put it, “[a]t the risk of playing the Grinch . . . we note that office Christmas parties also seem to be fertile ground for unwanted sexual overtures that lead to Title VII complaints.”^[1] Here are some tips to avoid finding a proverbial lump of coal in your stocking in the form of a new lawsuit.

Holiday Parties

Holiday parties should be unforgettable because of the festivities and fun, not because of the legal consequences that follow. Employers should consider the following holiday party best practices to protect themselves and their employees:

• Avoid using religious terms when describing office celebrations. Rather than referring to a party as a “Christmas party,” it should be referred to as a “holiday party” or “annual celebration.”
• If you choose to play holiday music, select non-religious songs (think “Winter Wonderland,” not “Away in a Manger”).
• Make clear that attendance at the holiday party is voluntary and that employees are not required to attend. To that end, do not distribute bonuses at the holiday party. If a holiday party is mandatory or if you hold it during regular work hours, then you will need to pay your non-exempt employees for the time they spend at the party.
• Employers have a legal duty to prevent harassment at holiday parties, just like they have a legal duty to prevent harassment in the office. Therefore, publish or re-publish the company’s sexual harassment policy before holiday parties take place. Remind employees that holiday festivities do not offer an excuse for violating a sexual harassment policy. If a company does not have a written policy or if you have not yet required your employees to attend harassment training this year, this would be a good time to take action.
• If alcohol is served, keep consumption in check. Limiting access to alcohol by placing restrictions on the type served, the time available (such as by closing the bar well before the party ends) or the number of drinks served (such as through drink tickets) may reduce the possibility that employees will drink to excess. Providing food is also a good idea, as it typically slows the absorption of alcohol into the bloodstream. Providing plenty of non-alcoholic beverages is also a wise choice.
• Hire professional bartenders and require identification from guests who do not appear to be 21 years of age or older. Ask the bartenders to keep their eyes open for obviously intoxicated employees. In addition, assigning designated managers to remain sober and monitor the intoxication of employees can serve as both a deterrent to excessive drinking and a safeguard against liability in the event that someone overindulges.
• Arrange designated drivers or cabs to ensure that all persons have a safe way to get home. Consider offering incentives to employees who offer to be designated drivers and/or reimburse employees for cabs or other types of paid rides home.
• Consider inviting spouses, significant others, families and important clients. Inviting employees’ families and the company’s important clients and others with whom the company conducts business can change the atmosphere of a company party and discourage inappropriate behavior. If you invite clients to the party, however, remember that employers can be liable for harassment perpetrated by third parties.
• The time and place of the party will go a long way toward setting the tone, and picking the right one can help eliminate problematic behaviors. A daytime event is far less likely to result in excessive drinking, or otherwise result in employees behaving inappropriately. Additionally, an event on a weekday, when employees know they have to work the next day, is likely to be more tame than one on a weekend. As far as location goes, if alcohol is being served at the party, the employer may be better off hosting an event offsite.
• Check with your insurance carrier to make sure that your general liability policy will cover your holiday party. Some general liability policies have an alcohol exclusion, so be sure to determine whether your policy includes such as exclusion before you decide to provide alcohol.
• Most importantly, if there is a problem deal with it promptly! Every act of sexual harassment, whether by a co-worker, supervisor, client or other third party, should be taken seriously. Prompt action designed to stop any further harassment not only demonstrates that the employer does not condone such behavior, but may prevent certain behavior from being imputed to the employer. Also, a record of consistent and effective response to incidents is important because the employer’s entire record of dealing with such matters is considered when evaluating liability.

Holiday Decorations

The key to navigating holiday observance in the workplace is that an employer cannot treat persons of different religions differently. This basic premise also applies when dealing with holiday decorations. For example, employers may choose to limit the extent that holiday decorations are permitted in the workplace; however, this limitation must be uniformly applied to all individuals and their respective religions.

Many employers prefer to decorate the office with non-religious decorations, such as winter/snow scenes, candy canes and strings of lights. The U.S. Equal Employment Opportunity Commission has acknowledged the U.S. Supreme Court’s determination that wreaths and Christmas trees are considered “secular” symbols in the context of the First Amendment. Therefore, employers may hang otherwise non-religious wreaths around the office or have a tree in the building lobby, even if an employee objects to such decorations.^[2]

The best practice for employers is to be sensitive to the diversity of the workplace and to not support or appear to support one religion over another.

Holiday Gift Exchanges

If employees participate in holiday gift exchanges, employers should make clear that gifts should be respectful and appropriate for the workplace. For example, employees should not be permitted to exchange materials containing graphic lyrics or content, or holiday cards of a sexual or otherwise lewd nature. While one employee may find such “gag” gifts humorous, another employee may take offense, especially if the gift is presented in a room full of co-workers and strangers.

Conclusion

When getting ready for the holidays, don’t forget the potential for liability, as compliance with the law takes no holiday. Have a safe and enjoyable holiday season and perhaps think twice before you hang mistletoe in the office.

Notes:

^[1] Place v. Abbott Laboratories, 215 F.3d 803, 805 n.1 (7th Cir. 2000) (collecting cases).

^[2] See EEOC Compliance Manual, Section 12: Religious Discrimination, at Example 52 (Employer Holiday Decorations), available at http://www.eeoc.gov/policy/docs/religion.html.