It’s Beginning to Look a Lot Like... Liability for a Company Holiday Party

December 2013

... liability for a company holiday party. Everywhere you go. Especially in California.

Employers have repeatedly been warned about the risks attendant with throwing holiday parties for their employees. In spite of the lawsuits that often follow, employers have continued to host holiday parties as a thank you for the work done throughout the year. The party may finally be over after the recent case of Purton v. Marriott International, Inc. (Super. Ct. No. 37-2010-00099161-CU-PA-CTL).

In December 2009, the Marriott Hotel held its annual holiday party as a “thank you” for its employees and management. Employees were not required to attend the party. Only beer and wine were served at the party and each guest was given two drink coupons. Michael Landri was employed as a bartender at the Marriott Del Mar Hotel. He didn’t work the day of the party, but decided to attend and warmed up with a beer and a shot of whiskey before arriving at the party at 6:15 pm. He also brought a flask with him that contained more whiskey.

There was only one bartender at the party and he left a bottle of whiskey on the bar which Landri used to refill his flask. Landri and several others left the party around 9:00 pm. About 20 minutes after he arrived home, Landri decided to drive a co-worker home who had become drunk at the party.

Landri was driving 100 mph with a blood alcohol level of .16 when he struck a vehicle driven by Dr. Jared Purton, killing him. He pleaded guilty to gross vehicular manslaughter while under the influence of alcohol and received a six-year prison sentence.

Dr. Purton’s parents filed a wrongful-death action against Landri, Marriott and others. Plaintiffs alleged that Marriott held the party as a fringe benefit, to improve relations between employees and increase the continuity of employment. Plaintiffs alleged that Landri became extremely intoxicated at the party and was allowed to leave the Hotel and drive.

Marriott moved for summary judgment on the ground it was not liable because the accident did not occur within the scope of Landri’s employment. The trial court granted the motion, finding that at the time of the accident, Landri was not acting within the scope of his employment. Plaintiffs appealed, asserting that the trial court improperly granted the motion because Landri’s intoxication arose within the scope of employment and Marriott’s respondeat superior liability followed the risk created by the intoxication wherever it proximately caused harm.

The appellate court reversed, finding that a reasonable trier of fact could find that Landri acted negligently by becoming intoxicated at the party and that this act was within the scope of his employment and proximately caused the car accident which resulted in Dr. Purton’s death.

The court noted that an employer may be vicariously liable for an employee’s tort if the employee’s act was an “ ‘outgrowth’ ” of his employment, “inherent in the working environment,” “typical of or broadly incidental to” “the employer’s business, or, in a general way, foreseeable from the Employee’s duties.” (Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291, 298–299.)

Under the respondeat superior doctrine, the term “scope of employment” has been interpreted broadly. (Farmers Ins. Group v. County of Santa Clara (1995) 11 Cal.4th 992, 1004 (Farmers).) “ ‘[T]he employer’s liability extends beyond his actual or possible control of the employee to include risks inherent in or created by the enterprise.’ ” “ ‘[T]he fact that an employee is not engaged in the ultimate object of his employment at the time of his wrongful act does not preclude attribution of liability to an employer.’ ’ (Id. at p. 1004.) Thus, an employer’s vicarious liability may extend to the employee’s negligence, willful and malicious torts, or acts that contravene an express company rule and confer no benefit to the employer.

The court also cited McCarty v. Workmen’s Comp. Appeals Bd. (1974) 12 Cal.3d 677 (McCarty), where the California Supreme Court considered whether an employee’s intoxication at an office party “arose in the course of his employment” within the meaning of workers’ compensation law. (Id. at pp. 681–682.) The McCarty court found that the employer’s purchase of intoxicants for recurrent gatherings on the premises demonstrated that it considered the gatherings to be company activities that benefited the company by fostering company camaraderie and the discussion of company business. (McCarty, supra, 12 Cal.3d at p. 682.)

The McCarty decision concluded that the employee’s attendance at the party came within the scope of his employment because it conceivably benefited the company (ibid.) and the record demonstrated that these parties had become “a recognized, established, and encouraged custom.” (Id. at p. 683.) Although McCarty is a worker’s compensation case, the high court considered worker’s compensation cases to be helpful in determining an employer’s vicarious liability for its employee’s torts because both fields of law allow recovery for an injured party irrespective of proof of the employer’s fault. (Perez, supra, 41 Cal.3d at pp. 967–968, fn 2.)

The court found that existing California case law clearly established that an employer may be found liable for its employee’s torts as long as the proximate cause of the injury occurred within the scope of employment. It is irrelevant that foreseeable effects of the employee’s negligent conduct occurred at a time the employee was no longer acting within the scope of his or her employment.

The appellate court in Purton v Marriott noted that “as a consequence of the negligence of those who have consumed alcohol at events that otherwise benefit a commercial enterprise. . . .if a commercial enterprise chooses to allow its employees to consume alcoholic beverages for the benefit of the enterprise, fairness requires that the enterprise should bear the burden of injuries proximately caused by the employees’ consumption.” (Childers, supra, 190 Cal.App.3d at p. 810.)

The appellate court pointed out that the Marriott created the risk of harm and that it could have lessened its risk in the following ways: (1) prohibiting employees from smuggling alcohol into the party; (2) strictly enforcing its two drink ticket policy (redeemable only for wine or beer); and/or (3) cutting off the drink service at a specified time and serving food (the party appears to have started around 6:00 p.m., with Landri leaving the party around 9:00 p.m., and there was no indication in the opinion whether food or hors d’oeuvres were served). The appellate court added that the Marriott could have eliminated its risk entirely by forbidding all alcohol. Landri came to the party having already consumed alcohol at home, but the Court made no mention of acting to prevent employees from imbibing before arriving.

The appellate court also held that there was no legal justification for cutting off the employer’s liability simply because the employee arrived home safely. The employer’s liability appears to continue until such time as the employee sobers up, whenever that may be.

Employers are urged to be particularly careful when Rockin’ Around the Christmas Tree.