Morally, I have no problems with a firm’s having a keg of beer or two at its summer outing. But as a lawyer, the idea of serving alcohol at a company picnic chills my spine.

It’s what happens after the party ends that would worry me if I were an employer. In Canada, there’s a rule called “host liability.” Long story short: Those who serve alcohol to guests who get drunk, drive and wrecked are on the hook for negligence. Host liability extends not just to employers who serve alcohol at company events.

Why Employers Are Liable for Drunk Driving of Workers

You can trace the rule back to 1974 when the Supreme Court of Canada decided a case called Jordan House Ltd. v. Menow, (1974) D.L.R. (3d) 105 (S.C.C.). A customer walked into a bar, drank too much and got run over by a car after stumbling into the street while walking home. The customer sued the bar for serving him to the point of intoxication and then letting him leave knowing that he couldn’t properly care for himself.

The Court found the bar negligent. Commercial establishments that serve alcohol have a duty to protect their patrons, it said. Essentially, the Court was saying that a bar can’t just serve customers until they get drunk and turn them loose on the streets.

In 1996, the BC Supreme Court applied host liability to an employer. A supervisor brought a cooler of beer to a crew erecting a trade show display on a hot day. A crew member got noticeably drunk and drove into a ditch on the way home. As a result, he became a quadriplegic. The Court found the company 75% responsible and ordered it to pay the victim $2.7 million in damages. The company supplied the beer; the supervisor knew the victim was drunk but didn’t try to stop him from driving home. Employers have an obligation to guard workers against unreasonable risks, the Court said, just as bars have a duty to protect their customers [Jacobsen v. Nike Canada Ltd., [1996] B.C.J. No. 363 (B.C.S.C.)].

In 2001, an Ontario company was held 25% responsible for injuries caused by a worker who got into an accident after drinking wine at the company Christmas party. Keeping a worker from driving home drunk after a party it hosts is part and parcel of the duty to ensure workers a safe workplace, according to the court [Hunt v. Sutton Group Incentive Realty Inc., (2001) 52 O.R. (3d) 425].

4 Ways to Avoid Liability

The best way to avoid liability is not to serve alcohol at your firm outings. If you decide to take the risk, you need to do 4 things:

1. Keep Track of How Much Guests Drink

One of the reasons the employer was found negligent in Hunt was that the bar at its party was open and unsupervised. So, before the party, designate somebody to monitor the consumption of others or hire professional bartenders who are trained to keep an eye on how much their customers drink. Another control measure is to issue drink tickets to each guest.

2. Determine If Guests Are Intoxicated

You don’t have to administer blood tests and breathalyzers to your guests. But, according to the Canadian Supreme Court, you need to make “reasonable assumptions” about whether a guest is impaired based on how many drinks she’s had. Monitors should probably make the call on intoxication.

3. Don’t Let Guests Drive If They’re Intoxicated

If you know or have reasonable grounds to suspect that guests are impaired, don’t let them get behind the wheel. How far must you go to keep drunk guests from driving? In the Hunt case, offered to call the drunk guest’s husband; and it arranged for another worker to drive her home. But the court said this wasn’t enough. The employer should have taken her keys and car, brought her to a hotel and, if none of that worked, call the police.

4. Warn Workers In Advance

Another thing you can do is warn workers in advance about the dangers of drinking and driving and indicate that anybody who gets tanked up at the party won’t be allowed to drive home. There’s a good Model Notice on the Insider website you can use, http://www.ohsinsider.com/toolbox/model-notice-3.