Liquor liability laws vary from state to state, but there are ways hoteliers can limit their liability to avoid dram shop lawsuits.
When has a guest had too much to drink? How can you avoid having his or her alcohol problem become your hotel company’s problem? How do you convince your hourly employee, who has been catering to a table of eight and expects a large tip, to refuse further alcohol service?
For starters, you must know the law and learn from experience.
Liquor liability laws, often known as “dram shop acts,” vary from state to state. Most states do impose liability on those who serve intoxicating liquors to others under certain circumstances and the hotels companies that employ them. State laws vary on whether this means liability for sale, service or other means of providing alcohol and whether it includes minors, intoxicated persons, the mentally incompetent and so forth.
Some states distinguish between negligent and reckless service. Other states still base liability on what the licensee knew or should have known. State laws also differ on whether the furnishing of alcohol is the proximate cause of any injury, death or damages caused by an intoxicated person. Differences also exist as to what evidence is necessary to establish knowledge of intoxication and if it is an objective or subjective standard.
Unfortunately, the only people standing between significant potential liability and your hotel are often the lowest paid employee(s) who work almost solely for tips.
A bartender or server’s incentive to serve is often directly adverse to the financial interest of your hotel in avoiding liability. Customers like stronger drinks delivered at a faster pace. They appreciate the last drink just before or just after last call, and often the gratuity received by the bartender will reflect that appreciation. Unfortunately, that may be the last drink before the customer gets behind the wheel or starts a brawl.
Surveying the crowd
As part of an analysis of this particular issue, we set out to interview a number of bartenders to see what they viewed as indicators to refuse service and the reactions they received—both financially and physically—when attempting to refuse service. The results revealed the threshold at which individuals are refused service often greatly exceeds the legal standards for intoxication, which may expose your hotel company to liability on a state-by-state basis.
The bartenders interviewed were experienced with taverns, hotels and restaurants with bars. Generally speaking, the bartenders had a tendency to refuse service to less than two customers per year.
Bartenders identified the signs of potential intoxication equated with the need to refuse service as ranging from belligerence and knocking over glasses to vomiting, falling face down on the table and passing out. The disincentives to cutting off a patron were clearly exhibited, with stories of tips of 10 cents or less and notes filled with expletives directed at the server, the establishment or the manager. Several bartenders also revealed they had repeatedly been challenged to physical altercations as a result of cutting off a customer.
Perhaps the most meaningful information obtained during this survey was that, while some employees clearly understood the dangers of allowing intoxicated customers to drive, few employees had any idea how to stop customers or any plan to effectively slow their drinking. Many of the people surveyed pointed to issues such as individuals ordering at the bar on behalf of their friends and only having brief time for face-to-face interaction with potential intoxicants.
However, perhaps the most telling comment demonstrating the existing problem was made by one server with years of experience who stated, “If they have been over-served, they don’t need to be here anymore; there is no point.” This statement clearly exemplified that tipping concerns and increased alcohol sales completely overshadowed any consideration of the dangers of allowing an intoxicated customer to drive home—or other potential risks.
The problem is clear, but the answer is not. Suggestions during group discussions included providing additional training, financial incentives or reimbursements for servers who do not receive gratuities after cutting off service.
Some establishments had a small cash fund for providing taxi services. Others placed limits on the amount of time a table could be occupied by the same group of customers. However, this again presented issues related to reduced sales and a possible disincentive for an establishment to be frequented during sporting events.
The first step to limiting liability is to know the law of your respective state and to train your employees in accordance with it. The key to avoiding costly and disruptive dram shop suits against your hotel is external vigilance. This vigilance should be in obtaining training and certification of your staff and keeping it current. Also, you can monitor your employees to see that they are complying with your policies and procedures, once established.
Shawn Rogers has been a member of ALFA International member firm Baker Sterchi Cowden & Rice LLC since 2005. Experienced in all phases of litigation, his practice is dedicated to the defense of trucking, premises liability, hospitality, product liability and employment cases. Shawn has taken and defended hundreds of depositions, including expert engineers, reconstructionists, economists, physicians and geologists. He can be reached at email@example.com.
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