In case any employer that is sponsoring a holiday party for its employees needs a reminder of the potential liability that may arise from such an event, earlier this month, a decision from the U.S. District Court for the Western District of New York provided a sobering reminder of just some of the employment litigation risks attendant with such an event.

The court’s decision denied a motion to dismiss filed by an employer in an employment discrimination action filed by an employee who alleges that she was subjected to sexual harassment from two superiors at a work-sponsored Christmas party. The plaintiff was employed as a clerk. The allegations of the plaintiff’s complaint resemble those of numerous Title VII sexual harassment cases arising out of company holiday parties.

Like many organizations, the employer held an annual Christmas party (nominated as such, as opposed to the more secular and advisable term “holiday party”). Following allegedly inappropriate sexual comments made by both individuals at the 2008 and 2009 department Christmas parties, the plaintiff informed her immediate supervisor that she did not want to attend the 2010 Christmas party. The plaintiff’s supervisor took no action based on those comments. The plaintiff, however, ultimately attended the 2010 party, which was held at a local bar. According to the plaintiff’s allegations, the evening was one in which she was subject to numerous instances of “inappropriate and sexually explicit remarks, comments, and gestures” by both men, as well as “unwelcome sexual advances” and “sexual assault” by one of them, who was a high-ranking superior. The alleged actions by the superior involved numerous instances of physical contact as well as innuendo involving another female employee. The majority of this conduct occurred in front of the plaintiff’s direct supervisor and other department employees.

The plaintiff sued, alleging that her employer had subjected her to a hostile work environment under Title VII of the Civil Rights Act of 1964. The defendant moved to dismiss the case, arguing that the alleged harassment by the superior could not be imputed to the organization. The district court, relying upon the Supreme Court decisions of Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries v. Ellerth, 524 U.S. 742 (1998), rejected this argument. The court opined that when an alleged harasser holds a supervisory position over a plaintiff, his or her conduct is automatically imputed to the employer unless the employer is able to successfully prove the following two elements: (1) “the employer exercised reasonable care to prevent and correct any harassing behavior,” and (2) “the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer to avoid harm otherwise.”

The court did not reach the plaintiff’s argument that the Faragher/Ellerth defense did not apply since the superior was sufficiently high-ranking in the organization to be considered the institution’s proxy or alter ego. Rather, the court held that the employer had not, at this stage of the proceedings, proved that it had exercised reasonable care in order to be entitled to the Faragher/Ellerth defense as a matter of law. This matter will now proceed to the expensive phase of discovery, significantly increasing the cost of the 2010 Christmas party.

While certainly the type of despicable treatment alleged by the plaintiff is not limited only to party or social event settings, the opinion is another reminder of the dangerous cocktail of employees, liquor, and a festive setting. Studies have shown that employees and supervisory personnel are more likely to engage in behaviors that could subject the company to liability in situations in a party setting, and relationship psychologists have reasoned that employees often view office parties as an occasional break from the normal social rules and constraints that the workplace can impose — notwithstanding the fact that laws governing harassment in the workplace don’t have a “holiday party” exception. The omnipresence of social media adds additional risks for employers, as Facebook, Twitter, and other social media outlets can further allow harassing and discriminatory behavior to be perpetrated and broadcast in a wider and more pervasive manner than ever imagined at the time Title VII was enacted.

If you have questions about Title VII or how to help ensure your holiday party is a bash that does not leave your company on the wrong end of a Title VII lawsuit, please contact:

• Sean P. Beiter (716.566.5409; sbeiter@goldbergsegalla.com)
• Or another member of Goldberg Segalla’s Labor and Employment Practice Group