Safe Harbor - Protection from TABC Administrative Action

If one of your employees sells alcohol to someone who is already showing signs of intoxication and that person causes personal injury or property damage to someone else, the parties who are harmed may have legal grounds to sue to collect damages from your business.

Over the past several years, alcohol liability lawsuits in Texas that have been settled both in and out of court have included attempts to collect damages from alcoholic beverage licensees for everything from auto accidents, teen pregnancy, sexually transmitted diseases, rape and fights.

If your business is sued in an alcohol related lawsuit, your business is afforded its greatest protection if all your employees are TABC Certified.

Here in Texas, juries have awarded judgments as high as $35 million because a bar or restaurant allowed an intoxicated guest to leave their premise without a cab or a sober friend to safely drive them home.

Here's a couple of examples of how these benefits can protect any bar, restaurant or non-profit organization that sells alcohol:

(1) Imagine that there's a bartender at a Restaurant that serves an alcoholic beverage to an 18-year-old woman who is working with the TABC on one of its ongoing stings. If everyone else who works in the restaurant sells, serves or directs the sale of alcohol is TABC seller-server certified at the time of the incident, then only that bartender would be accountable for a possible fine of up to $4000. However, if one other employee didn't have that training and had been with the company more than 30 days, the restaurant would face additional administrative penalties.

(2) Let's imagine again that this same bartender over-served a guest to the point of intoxication. That patron then leaves the bar or restaurant and kills two to three people. If everyone who works in the restaurant sells, serves or directs the sale of alcohol is TABC seller-server certified at the time of the incident, then only the bartender is liable for a possible lawsuit. However, if one other employee didn't have that training and had been with the company more than 30 days, the restaurant would face a possible lawsuit.

Safe Harbor - Certification Provides Business Protection

TABC Certification Protects Your Business From Fines
Section 106.14 of the Texas Alcoholic Beverage Code states that in the case of sale or service of an alcoholic beverage to a minor, intoxicated person or a person who is not a member of a private club on the club premises ...."the actions of an employee shall not be attributable to the employer"... IF:

(1) THE EMPLOYER REQUlRES ITS EMPLOYEES TO ATTEND A COMMISSION APPROVED SELLER TRAINING PROGRAM;
(2) THE EMPLOYEE HAS ACTUALLY ATTENDED A TRAINING PROGRAM;
(3) THE EMPLOYER HAS NOT DIRECTLY OR INDIRECTLY ENCOURAGED THE EMPLOYEE TO VIOLATE THE LAW.

This means if all employees of a licensee or permittee who sell, serve, prepare, and/or directly manage those who sell, serve, and prepare alcoholic beverages have been seller trained and certified as such by the Texas Alcoholic Beverage Commission, penalties relating to violations of these laws will be taken against the person selling or serving and not the business. This relief will be available if:

(1) these employees, including their immediate managers are currently seller/server certified,
(2) the person selling or serving has a current valid certification,
(3) the management has posted policies and procedures prohibiting sales to minors and intoxicated persons and the employees read and understand them,
(4) the person selling is not the owner or an officer of the licensee or permittee,
(5) management has not in any way encouraged these type sales, or
(6) there are not more than two of these type violations within a twelve month period?

If the violations result in injury or death then TABC will probably go for cancellation of your license even if you meet the above requirements. In addition, the employer must abide by the requirements set forth in Chapter 50 of the TABC Rules. This relief is commonly referred to as "safe harbor." If an illegal sale is made, the seller/server will most probably be arrested, but the retailer's permit/license will have protection from administrative action by the TABC.

In addition, the TABC now requires that each serving establishment have a policy book along with the placement of the commission's 10 Steps for Responsible Service on the company bulletin board.

Dram Shop Laws

The diminishing number of lawsuits can be attributed to the changes the 1995 Texas legislature passed regarding dram shop law. One of the most recent changes to dram shop law is the alteration of joint and several liability, which makes any party named in a lawsuit liable for the entire judgment. Under the new law, in order for the plaintiff to collect the entire amount from a bar or restaurant, a jury must find the bar or restaurant at least 51 percent responsible for the accident.

Many states, including Texas, have enacted or reenacted dram shop legislation in response to concerns about the consequences of excessive consumption. Today, only a handful of states do not rely on dram shop laws to hold liquor sellers responsible for their sales. Dram shop liability laws are a potentially powerful tool for changing the environment in which alcohol is sold. Dram shop liability laws hold alcohol servers responsible for harm that intoxicated or underage patrons cause to other people (or, in some cases, to themselves).

These laws are established at the state level through common law, legislation, or both. Dram shop liability laws are especially important in preventing alcohol problems because regulatory agencies - mainly state Alcohol Beverage Control departments - are so ineffective. In particular, these laws can provide an incentive for owners of alcohol establishments to train their employees in responsible beverage service.

Dram shop liability laws can help reduce alcohol-related injury. The initiation of a liability law suit in Texas in 1983 resulted in 6.5% fewer single vehicle nighttime injury crashes; an additional 5.3% decrease occurred after another suit was filed in 1984. In states in which servers have a relatively high level of exposure to liability:

• There is more publicity regarding liability;
• Alcohol servers and management are more aware of liability;
• More alcohol establishments obtain liability insurance;
• There are fewer low-price drink promotions; and,
• More servers check identification.

Sources: Texas Alcoholic Beverage Code: Online PDF Document 1333K; TABC Administrative Rules: Online PDF Document 489K