In the latest Weekly Wright Report:

• • Holiday Party Liability: Maryland & Virginia – read now

Holiday Party Liability: Maryland & Virginia

‘Tis the season for holiday cheer and for companies and businesses to celebrate the year’s end with their employees. People across the nation will celebrate with their co-workers in parties held at their offices or at off-site locations. These will range from pot luck lunches to black-tie catered affairs. As many well know, times of celebration involve certain risks, especially those related to alcohol. States across the country have different laws that govern social host liability as well as dram shop laws. With holiday party season heating up, it’s important to know the scope of potential liability for a business hosting its holiday party in Maryland and Virginia.

Let’s suppose the following: a small business is simply going to have its employees gather after work to celebrate the holidays at a local bar. The party will last from 5:30 PM to 7:30 PM, and the company set aside money to pay for food and drinks during that time. Promptly at 7:30 PM, the owner of the small business pays the bill, wishes his employees well, and heads home. A group of employees is having a great time and stays at the bar for three more hours. After “enjoying the festivities” for those three hours, one employee then gets in his car to drive home. About a mile after leaving the bar, he rear-ends and injures the other driver.

If you are that business owner, should you be worried about your company getting sued? In answering that question, let’s look at some of the possible theories and how they are treated by the law of Maryland and Virginia.

Dram Shop Laws

Generally, these laws make businesses or persons liable for serving alcohol to an individual who is clearly intoxicated. While the vast majority of states have enacted some kind of dram shop law, Maryland and Virginia are two of the minority states that have not. When these laws are in effect, they tend to regulate the entity actually serving the alcohol, i.e., the bar, so the company hosting the party would have a defense on those grounds. Thus, neither the company nor the rbar, will be liable under a statutory dram shop law for providing alcohol to an intoxicated person in Maryland and Virginia.

Social Host Liability

Another theory of potential liability is “social host” liability. Broadly speaking, under this theory, the host of a party could be held responsible for the acts of party guests when the host supplies alcohol. This type of liability is broadly in place to make hosts liable when alcohol is served to minors. Virginia imposes criminal penalties on hosts who serve alcohol to minors, but it does not hold those hosts liable for civil damages. Maryland has a similar law, but the state’s highest court has ruled that a violation of Maryland’s statute can give rise to civil liability in negligence.
In Virginia, the Supreme Court has repeatedly refused to adopt “social host” liability. Virginia law requires guests and attendees to be responsible for their own actions stating “drinking the intoxicant, not furnishing it, is the proximate cause of the injury.” Maryland law with respect to provision of alcohol to adults is similar. For similar reasons as stated by the Virginia courts, Maryland finds there to be an “obstacle” in holding a host responsible in the assumption that “any entity or person who serves alcohol to another, has control over the actions of that party.” Like Virginia, Maryland “adhere[s] to the principle that “[h]uman beings, drunk or sober, are responsible for their own torts.”
Therefore, given the facts in our hypothetical, the business would have strong defenses against a claim based on social host liability.

Respondeat Superior Liability

There is one other potential theory of liability against the company in our scenario. That is respondeat superior – the legal doctrine that holds employers responsible for acts of their employees. There are cases from both Virginia and Maryland that discuss this issue.

In Kuykendall v. Top Notch Laminates, Inc., a woman was killed by an individual who “drank constantly” at his employer’s holiday party. The Maryland Court of Special Appeals stated that for an employer to be held liable for the act of an employee, the employee must have been acting in the scope of his employment. Because the accident took place after business hours, off the business premises, with the driver using his own vehicle, and attendance at the party was not mandatory, the Court found that the employee was not acting within the scope of employment. Therefore, the employer was not liable for the accident.
Sayles v. Piccadilly Cafeterias, Inc. is a similar case from Virginia. Here, the plaintiff was injured in a car accident after an employee had left his employer’s holiday party where he became intoxicated. The plaintiff argued that the employee was within the scope of his employment because he became intoxicated at a party on the employer’s premises and continued to act within the scope of his employment when the accident happened five minutes after leaving the party. The Court rejected this argument and found that the employee was not acting within the scope of his employment by focusing the analysis on when the accident actually occurred, not what happened prior. At the time of the accident, the employee was not acting in furtherance of the employer’s business.

While a company still has a defense under this theory, and courts appear hesitant to hold these post-party actions to be outside the scope of employment, it does not shut off all potential liability as these tend to be fact-intensive cases. On a related note, because of the factually-specific nature, it is more difficult to get these cases dismissed at the pleadings stage which means a company may need to spend more time and money defending the lawsuit through the discovery process before being able to get the case thrown out.

Conclusion

Have fun and celebrate the holiday season! But always be mindful of the actions of your employees and potential liability when hosting any celebration that includes alcohol. Factors like the location of the party, whether attendance is required, etc. are important considerations. As always, if you have questions or concerns, feel free to reach out and ask us! Happy Holidays!

Want more? Visit the Weekly Wright Report page to browse past issues.