Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—Don't let your holiday party become a lawsuit wonderland, (Dec 19, 2025)

By Heather Horn and Jonathan Brophy of Seyfarth Shaw LLP

Seyfarth Synopsis: It's the most wonderful time of the year—until someone spikes the punch and your company lands on a naughty list. Holiday parties are great for spreading cheer, but they can lead to liability faster than the bartender can pour eggnog at an open bar. Here's how to keep your celebration festive and compliant with California law.

Festive Celebrations for Everyone!

All employees should feel included in celebrations during the most festive time of the year. California's Fair Employment and Housing Act and federal laws such as Title VII of the Civil Rights Act of 1964 prohibit religious discrimination. Avoid skating on thin ice with these laws, and plan a neutral party that does not favor one holiday or religion over another. For example:

• Use neutral themes like "Winter Celebration" or "Year-End Appreciation."

• Avoid religious décor and music.

• Offer diverse food options to respect various dietary restrictions and preferences.

Sleigh the Alcohol Risks

Alcohol is the ultimate Grinch when it comes to holiday party liability. Under California law, employers can be held responsible if an intoxicated employee causes harm even after leaving the party. In Purton v. Marriott International, Inc., 218 Cal.App.4th 499 (2013), the Court of Appeal found that an employer could be liable for an employee's DUI accident after a company party because the employee consumed alcoholic beverages at the party, which the court held was within the scope of employment.

Here are a few tips to keep employees' spirits bright (but not too bright):

• Communicate expectations for responsible drinking before the event.

• Limit drinks with tickets or cap open bar hours.

• Hire licensed bartenders trained to cut off service.

• Serve plenty of food and non-alcoholic options.

• Put a "last call" time on alcoholic drinks towards the end of the event and switch to nonalcoholic beverages.

• Provide rideshare vouchers or shuttles.

• Consider hosting the event during the day (or as a lunch).

Employment Policies Don't Take a Holiday

Even if your party is off-site and after work hours, FEHA and Title VII's harassment and discrimination laws still apply. Employers can be liable for misconduct at work-related social events because these events are considered extensions of the workplace.

One area where issues can arise is employees' disregard for a company dress code. Employers may decide to relax dress code policies (if one exists) during holiday parties to allow employees to don festive attire. However, even if a policy is temporarily revised or relaxed, employees still need to dress appropriately and avoid offensive clothing.

To ensure your entire workforce can enjoy the holiday season:

• Before the event remind employees that anti-harassment policies apply at company parties.

• Avoid mistletoe, risqué games, inappropriate photo booth accessories, or any party activities that might create discomfort.

• Ensure party entertainment (comedians, musicians, magicians) is workplace appropriate.

• Ensure company leaders model appropriate conduct.

• Investigate any complaints arising from a company event promptly and thoroughly.

Remember to Pay Your Employees all the Gelt They Earned at the Party

If attendance is mandatory, non-exempt employees must be paid for their time even if the party is after hours.

If the party occurs during work hours, don't forget California's meal and rest break rules. A mandatory party during the workday does not count as an off-duty meal period for non-exempt or hourly employees. Employers may owe an extra hour of pay to these employees as a meal period premium.

• Make attendance voluntary and clearly state this in the event invitations.

• Plan off-duty breaks for non-exempt employees if the party overlaps with work hours.

• Remind non-exempt employees not to clock-out for a holiday party that occurs during work hours.

Workplace Solutions

Make your list and check it twice! With a little planning, employers can create parties that are winter wonderlands rather than litigation snowstorms. Employers should set employee expectations before the festivities begin—including alcohol limits and transportation options, reinforce company policies, be aware of wage and hour implications, and plan an inclusive celebration. The authors or your favorite Seyfarth attorney are here to help you navigate holiday party pitfalls.

Edited by: Catherine Feldman

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Heather Horn and Jonathan Brophy

Seyfarth Shaw LLP

233 S. Wacker Drive, Suite 8000

Chicago

Illinois 60606-6448

United States

Tel.: +1 312 4605000

E-mail: CBowles@seyfarth.com

URL: www.seyfarth.com//

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