Steps to Limiting Alcohol Liability

Posted By: Michele Stumpe Legal + Regulatory, Alcohol,
By Michele Stumpe, Partner at Taylor English Duma

Losing the ability to sell alcohol or becoming the subject of an alcohol sales based lawsuit can be devastating for any restaurant. Implementing an effective alcohol service program is the best way to protect your business.  Every good program starts with an easy to understand written policy, incorporates high-quality comprehensive training, and ties it all together with proactive monitoring and enforcement.  Here are some tips for implementation in your restaurant:

Written Policies
  • CLEAR and COMPREHENSIVE.  Don’t limit yourself to a few generalized paragraphs in your employee handbook with vague prohibitions to “ID everyone who appears to be under” a certain age and “refuse alcohol sales to intoxicated patrons.”  These types of ambiguities can do more harm than good.  For example, the “appears to be” language gives employees an automatic excuse that the patron “appeared” to them to be of proper age.   A better policy would be “ID any patron who is under” a certain age – preferably at least 40 which is the industry standard.
  • RED or VERTICAL means stop.  The best policy is to refuse to sell alcohol to any patron attempting to use a “minor’s” ID.  Most failed compliance checks occur after the employee requests, and is shown, a minor’s ID.  Employees need to be trained to recognize the distinguishing factors of a minor’s ID and to refuse to sell.   
  • Incorporate STATE and LOCAL LAWS.  Alcohol license suspensions and revocations frequently occur because management isn’t familiar with the legal restrictions (such as hours of sale, employee training or permit requirements and promotional prohibitions).  Knowledge of the laws by all staff and managers is an important linchpin of avoiding liability.
  • Put your POLICY in WRITING and have employees SIGN it.  This avoids confusion and provides an objective basis for disciplining employees.  It also shows that the restaurant exercised reasonable care to implement rules regarding alcohol sales and to notify its employees of such.
  • TRAIN employees on responsible alcohol sales and service before allowing them to engage in alcohol sales.
  • Engage MANAGERS in the alcohol training.  Management involvement from the outset increases monitoring and enforcement.
  • Choose the RIGHT TRAINING program, one that includes comprehensive coverage of:
  • State and local laws (such as merlot to go and permit requirements, happy hour restrictions, BYOB regulations, etc.);
  • ID checking procedures including recognition of fake IDs, common strategies by minors attempting to obtain alcohol, recognition of minor’s IDs and proper protocol for refusing sales;
  • Recognizing signs of intoxication, methodology for preventing intoxication and proper procedures for dealing with intoxicated customers; and
  • Handling difficult customers and difficult situations.
  • TEST employee knowledge of training and policies.   Include multiple forms of questioning and a sufficient number of questions to insure complete understanding.  Review and address any erroneous answers before the employee is permitted to serve or sell alcoholic beverages.
  • Utilize REINFORCEMENT TOOLS such as signage, pad holder reminders, and menu notices to customers.
Monitoring & Compliance
  • MONITOR employee compliance with the company’s policies to expose risks and provide an opportunity to correct problems before they become a liability.
  • Some effective means of monitoring and compliance include:
    • Regular reminders and refresher training;
    • Mystery Shopping (insure compliance with Georgia law by only using shoppers who are 21 and older);
    • Manager review programs;
    • Incentives to reward responsible employees; and
    • Disciplinary measures for employees who do not follow company policy.
By taking a comprehensive approach to all aspects of alcohol compliance (policy, training and monitoring) restaurants can significantly reduce the risks and expense of liability.