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Businesses used to be concerned only about the aftermath of wild office parties. Now there's more drunken-driving liability to worry about. This past August a jury assessed $885,000 in punitive damages -- not against the drunkard, but against his employer. The verdict establishes a corporation's responsibility for the off-premises acts of employees. If the decision holds, it may broaden the definition of "scope of employment" and allow third parties to rummage through employers' pockets for damages caused by drunken employees, even if there's no direct drink link.
In the precedent-setting case, a salesman for little (19 employees) Carroll Air Systems, of Tampa, Fla., partook of a few too many at a trade-convention dinner -- enough to classify him as legally drunk -- and afterwards killed two people in an accident while driving back to his hotel. The jury agreed that although the convention wasn't a selling event, the salesman attended in a professional capacity.
"If a company accepts the benefit on its tax returns, then it accepts the burden of the risk," reasons West Palm Beach lawyer Jeffrey D. Fisher, the plaintiff's attorney. "Entertaining over alcohol is a business activity, and as such the corporation can be held liable wherever it occurs." Fisher argued in court that two drinks should be anyone's limit, even for a salesman "buddying up with clients." As explicit as such a dictum might be in an employee handbook, it wouldn't necessarily exculpate the employer. Fisher's improved text for a drinking policy: "We don't allow any drinking."
Massachusetts lawyer Ronald Beitman, a specialist in liquor-liability law, agrees that "a drink limit in a company's expense-account policy isn't enough." Salespeople closing deals can't be expected to stop after two; they'll keep it flowing but won't submit the expense. Beitman's recommendations: specify that travel-and-entertainment expenses do not include alcohol, and that if a salesperson does buy a prospective customer an extra drink and the company finds out, he or she will be subject to disciplinary action.
Other off-premises drinking precautions:
* At any company-sponsored event, limit employees and guests to two drinks; stress the availability of nonalcoholic alternatives.
* Book rooms within walking distance of conventions.
* Review your comprehensive insurance. Unless you've taken out explicit liquor coverage, it may not extend to company drinking situations, even on premises.