No Dram Shop Liability for Pennsylvania Employers Serving Alcohol to Intoxicated Employees (PA)
Work-sponsored outings and events are normally seen as a much-welcomed reprieve from the old “9-5”. However, when alcohol is involved, Pennsylvania employers have potential liability to third parties who are injured by suffer at the hands of an intoxicated employee. In Klar v. Dairy Farmers of America Inc., the Superior Court of Pennsylvania addressed the standard which applied to an employer in such a situation. In that case, the Dairy Farmers of America (DFA) held a golf outing for its employees who had to pay a monetary contribution to participate in the outing. An employee became intoxicated and the DFA continued to serve him even though they knew he was an alcoholic and visibly intoxicated. The employee drove home and hit plaintiff who was riding on his motorcycle, causing serious injuries. Plaintiff sued the driver and the DFA, alleging that it was liable for serving the employee when they knew he was an alcoholic and intoxicated. The DFA moved for judgment on the pleadings, arguing that it was a “social host” and not subject to Dram Shop liability because they did not qualify as a “licensee” under PA’s Liquor Code and did not obtain “licensee status.” DFA further argued that there is no liability on the part of a social host who serves alcoholic beverages to their adult guests. The trial court granted DFA’s motion for judgment and Klar appealed, arguing that an unlicensed company-employer who provides an uncontrolled amount of alcohol to a visibly intoxicated employee in exchange for remuneration is liable to injured third parties. The Superior Court disagreed and affirmed, observing that “only licensed persons engaged in the Sale of intoxicants have been held to be civilly liable to injured parties.” The Court further noted that a social host is not liable for serving alcoholic beverages to a guest as “it is the consumption of the alcohol, rather than the furnishing of the alcohol, which is the proximate cause of any subsequent occurrence.” The Court ruled that an employer is a non-licensee under the liquor code and is not subject to standard civil liability because it acted as a social host and was not in the business of furnishing and selling alcohol. The Klar decision makes it clear that Pennsylvania employers cannot be subject to Dram Shop liability for serving alcohol to intoxicated employees. However, the Supreme Court of Pennsylvania has agreed to hear the appeal of the Superior Court’s ruling and a decision is expected this year. WCM will monitor the appeal and provide an update once a decision is announced. Thank you to Haley Matthes for her contribution to this post. Should you have any questions, please contact Andrew Gibbs.
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