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. Last Updated: 07/27/2016

Company Parties Backfire Into Lawsuits

LOS ANGELES -- The atmosphere was thick with naughty sexual innuendo at the company Christmas bash thrown at Techni-Craft Plating, a small jewelry-manufacturing company in Cranston, Rhode Island.

Employees swapped "gag gifts,'' including a pack of condoms, black panties and T-shirts with suggestive slogans. Later on, employees said they played a game of strip poker.

But after the laughter subsided, the gathering was transformed into a corporate nightmare: it emerged as important evidence in a tangled sexual harassment lawsuit brought against, and eventually lost, by Techni-Craft's owner.

The traditional company party -- usually intended to boost morale and pull the staff together -- occasionally backfires. The worst tragedies involve workers who drive home drunk and wind up in deadly traffic accidents. But perhaps the most common hangover is the sexual harassment complaint that is triggered, or aggravated, by festivities that get out of hand.

Joel Kelly, a Los Angeles attorney who defends companies against sexual harassment and other employment-related lawsuits, put it wryly: "When I say Christmas is good for our business, this is what I mean.''

There are no official figures indicating how often party misbehavior figures in a sexual harassment or racial discrimination suit, but employment lawyers say it is commonplace.

Rarely does the outrageous gesture or remark at a company social event provide the grounds in itself for a successful suit against an employer. What's more, the massive rise in sexual harassment cases following the Anita Hill-Clarence Thomas showdown has hit a plateau, as employers have become increasingly sensitive to the problem. Still, sexual harassment remains one of the biggest employment law issues in the United States. And the people who spur the suits often are bosses or co-workers whose actions were ignored -- until, in the alleged victims' minds, they crossed the line at the staff party.

It was essentially that way for Susan Siragusa. In June, she won a consent decree providing back pay and interest totaling $22,000 from a sexual harassment suit brought for her by the EEOC against a chain of auto tire shops in the Chicago area.

In Siragusa's case, though, the offensive office Christmas celebration that contributed to her complaint was held just days after she joined the company as a clerk-secretary in December 1988.

Only 19 years old at the time, Siragusa said she went to the party after being encouraged to attend by her new, mostly male co-workers.

But she stormed out after learning, much to her surprise, that three female strippers had shown up. Even worse, Siragusa said, her store's manager approached her the following Monday morning to tell her that one of the strippers performed sex acts after she left.

When things like that happen, she said, "You feel violated. I didn't know if something went on by my desk. You have no idea.''

A volatile mix of factors are involved at work-related parties. The influence of alcohol leads the way, even though many employers are doing such things as limiting free drinks, serving only beer and wine rather than hard liquor and shutting down the bars early to give party-goers time to sober up before leaving.

Gag gift giveaways, a staple at many holiday season get-togethers, can also mean trouble. Kelly said he had a client who thought he would get a laugh from a female colleague by presenting her with a dildo at a company party. Instead, the woman retaliated with a sexual harassment complaint, a case that quickly was settled after the company agreed to provide sensitivity training to the staff.