Naughty or Nice? Planning a Successful Holiday Party

It's holiday time, when companies throw parties to thank their employees for their hard work during the year, and employees are more than ready to relax from all that work and celebrate the season. So what are the key ingredients for a successful corporate holiday bash? "A great DJ," says an event planner at a major media company in New York City. "A coat-check routine where nobody has to wait. But more importantly, a ton of food and plenty of bars, so nobody complains about the lines."

Unfortunately, experts say, this planner has unknowingly exposed herself to potentially serious risk. For starters, she's left emergency planning off her checklist: Does she know where the closest hospital is, or the last time the venue was inspected by the fire marshal? Has she asked if anyone on the facility's staff is trained in CPR, or knows how to use a defibrillator? "A lot of times planners assume that the venue staff will know what to do in an emergency," says Pamela Fromhertz, president of Continuity of Operations Planning Experts (C.O.P.E.), a Denver-based risk management firm specializing in the events industry. "But sometimes they don't."

For example, Fromhertz relates the story of a colleague who was working a holiday party in a large hotel in Manhattan and panicked when she happened upon a guest lying on the floor alone in a back hall, having a heart attack. "She had a difficult time finding staff, and finding staff that was trained and knew what to do," says Fromhertz. "Eventually they called 911 and got an ambulance there, and [the attendee] was okay. But it created unnecessary chaos. As part of the event staff, she should have known the emergency procedures—where to go, what to do. She should have had a radio and known who to call."

"Plenty of Bars"

It may sound Scrooge-like to advise planners to incorporate contingency planning into their holiday soirée preparations, but there are two sound reasons: Corporate holiday parties are often handled by someone who is not from the meetings department—the CEO's assistant, or a staffer in human resources—and is therefore less savvy about best practices for events. More importantly, alcohol, the biggest bugaboo of all, is involved.

Even in New York City, where driving is less common, drinking is the greatest potential risk at a corporate holiday party, says Arthur F. Backal, founder and CEO of State of the Art Enterprises, a high-end event production firm whose clients have included film mogul Harvey Weinstein's brother Bob Weinstein and real-estate developer Larry Silverstein. "We always make sure we manage that situation so there are no problems when guests leave the venue," he says, "because that would reflect badly on the company."

Yet, while some companies go so far as to reserve a block of hotel rooms so their employees can crash for the night, other firms aren't so cautious. "It's a very fine line," says the media company planner about her propensity to control attendees' drinking. "You keep an eye out, but we're hosting a party and we're not their parent. If someone drank too much, I would feel awkward, [as a colleague] in a corporate position, saying something to them."

Awkward as it may be to tell a fellow employee that she's had a few too many, it's easier than dealing with what would arise if that employee injured herself—or someone else—because of excessive drinking. "It doesn't matter how good the band is or what the food's like," says Kevin White, director of production at Empire Force Events, a New York City event-management firm. "If anyone gets hurt, the whole event is a failure." And anyone planning an employee event where alcohol is served, he adds, needs to be aware of the potential for sexual harassment: "We've seen holiday events where the band will never play a slow song," he notes. "Even if employees can invite their spouses, [the band will] play maybe one or two cutesy romantic songs, but that's it. Barry White's not coming over the sound system."

Fromhertz goes even further. "I hate to say it, but there's a potential risk of rape. You need to make sure the facility doesn't allow for the kind of environment where somebody could be caught in a corner." It might sound sensationalist, but Fromhertz knows of at least one holiday party where a guest was raped by another guest. "It's ultimately your responsibility to make sure your attendees are protected," she notes.

An Attendee Named "Sue"

Very few planners are aware of how vulnerable they are to liability issues, says James Decoulos, an attorney in Peabody, MA, who specializes in insurance and risk management for the special-events industry. Although an attendee is more likely to be harmed by the actions of a vendor than a planner, liability is determined on a percentage basis, meaning that the planner could still be found partially liable.

Decoulos cites the example of a recent incident in Boston where a guest at an event was injured by a falling sound speaker. "If there's a lawsuit, the event planner will probably be named because the plaintiff doesn't know whose responsibility it was to set up that speaker," he says. "But even if they determine that it was the sound technician's responsibility, there's still a potential for the event organizer to be liable if the jury finds that they were negligent by, say, hiring a sound company that was unlicensed, or didn't have much experience doing those types of events."

More alarmingly, if a planner is found to be liable at all, he could wind up responsible for paying the entire judgment award. "Let's say the jury finds the sound technician 80 percent liable and the planner 20 percent," continues Decoulos. "Certain states—including Massachusetts—mandate that the plaintiff cannot go without payment, so if the sound company couldn't pay because he went bankrupt or didn't have adequate insurance coverage, the planner would have to cover the whole thing, then issue a claim against the supplier to recover his percentage."

Pleasing the Bean-Counters

Corporate governance is another possible vulnerability when planning a holiday party. If the company in question is publicly traded, the planner needs to take Sarbanes-Oxley regulations into consideration, warns Joshua Grimes, a Philadelphia attorney who speaks frequently on Sarbanes-Oxley's implications for the meetings industry.

Several planners interviewed for this article claimed that Sarbanes-Oxley did not govern their holiday parties because non-employees—such as spouses or clients—were not invited. Grimes disagrees. "If you're paying for the party with public money, there needs to be a demonstrated company purpose for the expenditure," he says. That purpose can be to reward the firm's employees, "but it has to be reasonable. If you're flying all the employees and their spouses to Paris to drink Dom Perignon in the Eiffel Tower, then it's an abuse of company funds."

Grimes adds that even nonprofits or other organizations that are not governed by Sarbanes-Oxley should be wary of the ethical implications of throwing over-the-top, barely-under-control parties. "There was a convention and visitors bureau that was once investigated for sending the staff to Europe and claiming it was business-related," he recalls. "They weren't breaking any laws, but it didn't look good."

Perhaps this sort of scrutiny explains why some firms contacted for this article were reluctant to discuss their holiday parties on the record. "The word 'Sarbanes-Oxley' in a story about holiday parties concerns me," says a spokesperson for an investment banking firm that declined to participate. Similarly, an independent planner on the West Coast who organizes the holiday party for a major automaker admitted that the company has "thousands" of internal regulations it must adhere to. "They are so conservative," this planner says. "We did a party last year with major talent, and they were complaining the jokes were too risque. The humor wasn't even blue—it was more like aqua."

Ever sensitive to their public image, very few organizations these days, whether they're publicly traded or not, are celebrating the holidays Enron-style. Even Houston-based ConocoPhillips, the fourth-largest oil refiner in the world, has been hosting the same modest event year after year: It rents out the local symphony hall for the afternoon and invites employees and their spouses to a special concert of Christmas music. "We've done this for years, whether it's good times or bad times for oil," says Lisa Stanford, ConocoPhillips' meetings manager. "We're all cognizant of not being extravagant with shareholders' money."

Five Tips for Successful Holiday Parties

Have an emergency plan. Think: What would you do if something happened to a guest? Find out where the nearest hospital is, when the event venue was last inspected by the fire marshal, and whether anyone is trained in emergency procedures (CPR, defibrillator use, etc.).

Manage alcohol consumption. Otherwise, if a guest injures himself or someone else, as the event planner you could be named in a liability suit.

Don't play Barry White. Slow, sexy songs encourage an atmosphere of sexual harassment, say veteran event planners.

Don't let guests wander off unattended. Again, if someone got hurt or attacked, you could be found liable.

Have a nice party—but not one that's over the top. Public perception is important. Keep in mind what impression you' d convey if people read about your party in the media.