This is a straw man argument, and the type that can only appeal to a company wanting to make poor, ill-informed risk management decisions.
No business can eliminate all risk, but some risks are unnecessary and easily eliminated. Serving alcohol to employees creates a significant amount of potential legal liability (it could literally bankrupt your company) but it is hard to reasonably and objectively argue that the potential liabilities are outweighed by any of the potential benefits.
Assuming you are not operating dangerous machinery are you likely to be sued for simply allowing alcohol to be consumed?
I can see that you might be held liable for some other problem of which alcohol might be a contributing factor but simply eliminating alcohol may well not solve that problem anyway.
The potential benefits of allowing responsible alcohol consumption might be more than you think, if it helps provide a relaxed atmosphere where people want to go to work and are less likely to jump ship to your competitor for a marginal pay increase.
> Assuming you are not operating dangerous machinery are you likely to be sued for simply allowing alcohol to be consumed?
Providing alcohol to your employees or permitting them to consume alcohol on the job or at a company-sponsored event creates a whole host of potential liabilities. Here are a couple of real-world examples:
If you believe that alcohol is a good way to create a "relaxed atmosphere" let me assure you: there's nothing relaxing about watching your insurance premiums skyrocket, spending hundreds of thousands of dollars on attorneys, paying millions of dollars in damages and/or living with the fact that you were involved in an incident during which someone was seriously hurt or lost his or her life.
Lawsuits are filed every day, has there been a ruling that just by serving alcohol they were liable? Or perhaps they are liable due to obvious negligence similar to how a bar can be found liable after a DUI if they over-served someone?
It is interesting that there doesn't seem to be the lawsuit worry or even the worry about "living with the fact that you were involved in an incident during which someone was seriously hurt or lost his or her life" at European companies.
There was an interesting ruling in California a few months ago[1] and you don't need to look too hard to find cases in which an employer was found liable or settled[2].
Keep in mind that when a lawsuit is filed, the strength of your defense doesn't matter if you don't have the funds to pay a quality attorney. In many kinds of cases, you can easily rack up tens of thousands of dollars in legal bills before you even begin to address substantive matters, and plaintiff's counsel has no incentive to approach the matter in a fashion that reduces your costs.
If "ask your attorney" is good policy, it's good policy regardless of whether the topic is one that you find intuitively naughty or one you find intuitively innocuous.
One potential benefit - you signal to employees that your workplace is fun. Many growing companies will die if they don't get the right talent. Compare the large risk of getting the wrong people to the tiny risk of an employee getting drunk and raping/murdering everyone, and the calculus is far from clear.
No business can eliminate all risk, but some risks are unnecessary and easily eliminated. Serving alcohol to employees creates a significant amount of potential legal liability (it could literally bankrupt your company) but it is hard to reasonably and objectively argue that the potential liabilities are outweighed by any of the potential benefits.