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Publication

November 20, 2001Client Alert

Alcohol and Employment – A Bad Mix

There has been plenty of adverse publicity about the "Frostbite" Case (Heritage Mutual Insurance Company and Larsen Laboratories, Inc. vs. William E. Larsen, 2001 Wis. 30 (2001)). The underlying background was as follows:

William Larsen, a travelling salesman and employee of Larsen Laboratories, was driving to his mobile home in Northern Wisconsin which doubled as a sales office. On the way, he stopped at a local tavern the night before his meeting and had five mixed drinks, in addition to two diet pills he had consumed earlier. Larsen then finished the drive to his mobile home but had difficulty entering the premises. He passed out inside the open door and was exposed to severe weather conditions. The exposure caused frostbite which resulted in the amputation of Larsen's fingers and thumbs.

The Supreme Court held that the Labor and Industry Review Commission was reasonable in its decision to allow recovery of worker's compensation benefits because Larsen was a travelling employee whose trip was for business purposes. Stopping at the tavern was probably a deviation (though no tribunal at any point in the history of this case decided that it was). When Larsen left the bar to continue to the mobile home he had returned to continuing his employment. The stop was also not sufficient to break the "employment nexus." The Court held that Larsen's intoxication was irrelevant because he was not injured at the bar or while on the road to or from the bar. Instead, he was engaged in an activity that was "reasonably necessary to living or incidental thereto." The Court distinguished this case from Goranson (where the Commission denied recovery to a travelling salesman employee who jumped from the hotel ledge while on a business trip), because here the exposure to cold weather arose out of a "zone of special danger" created by the fact that Larsen's employment required him to travel in the cold.

Larsen's intoxication did, however, reduce the amount of recovery by 15%, pursuant to Wis. Stat. 102.58. The Supreme Court reversed that part of the Court of Appeals decision and reinstated the reduction imposed by the Commission.

There was a partial dissent by Justice Crooks. The dissent agreed, at a minimum, the award be reduced by 15%. The dissent, however, would have found that Larsen's trip to the bar was purely personal and broke the "employment nexus," barring any recovery. Justices Wilcox and Sykes joined in the dissent.

The second case involved Holiday Parties and the new adage "Let the Designated Driver Beware." The underlying holding was that a Menomonee Falls company cannot be sued for a fatal car crashed caused by an employee who got drunk at the company's Christmas party at Silver Spring Country Club according to the Court of Appeals. The company, Universal Metrics, Inc. ("UMI") said that this party was a meeting to "further the business interests of UMI by way of creating goodwill between it and its employees, and for purposes of increasing employee moral."

The employee of UMI, Michael Devine drank the equivalent of 13 to 18 beers at the December, 1998 company party. The employee had a prior known drinking problem and the bartender at the country club asked who would be responsible for driving Mr. Devine home. Fellow employee and department head, John Kreuser agreed to take the employee home. The spouse of Kreuser said it was someone else's turn to give Mr. Devine a ride home and Mr. Kreuser left the party.

Unfortunately, Mr. Devine tried to drive himself home drunk at an alcohol limit of 0.338 and crashed his car into one driven by Kathy Stephenson, a Milwaukee mother with three young children. The claim set forth arguments that both the company and Mr. Kreuser were negligent in not giving Mr. Devine a ride home. Employees testified at an inquest in 1999 that Mr. Devine reeked of liquor at work, drank beer at lunch and bummed rides from friends after losing his license following drunken driving arrests.

The inquest jury recommended that the District Attorney charge the company with being party to a homicide by intoxicated use of a vehicle. The District Attorney ruled that he could not prove the employees were acting in the scope of their employment during the weekend party.

The First District Court of Appeals in Milwaukee ruled that the state law Wisconsin Statutes 125.035(s) grants broad immunity from civil lawsuits to companies, taverns and social hosts who provide and sell alcohol. Accordingly, the company cannot be held liable for providing alcohol to an employee who then caused a fatal crash. However, the Court ruled that the company department head who offered the drunken coworker a ride home and left without him can be sued for reneging on his offer. Therefore, UMI and its insurer still can be held liable for the conduct of that department head. (Stephenson v. Universal Metrics, Inc. and John H. Kreuser, 2001 Wis. App. 128; 2001 Wis. App. Lexus 503 decided May 15, 2001).

The obvious concern about this case is that this type of litigation

"may utterly destroy buddying designated driver programs in this state, because designated drivers may fear liability for inadequately performing or failing to perform their voluntary duty ?absent a legislative pronouncement requiring us to do so, we certainly will not relieve designated drivers, and others who volunteer to drive intoxicated individuals home, of liability for their failure to fulfill responsibilities they have assumed voluntarily."

For more information, please contact Robert W. Mulcahy at rwmulcahy@michaelbest.com or 414.225.2761.

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