When Holiday “Cheer” Turns Into More Legal Trouble at Work – Mary T. O’Sullivan

By Mary T. O’Sullivan, contributing writer on business and leadership

“An employer may be required to excuse an employee from participation in an initiative or celebration where it conflicts with the employee’s sincerely held religious beliefs, observances, or practices.”—  EEOC

In many workplaces, the first sign of the holidays isn’t a bonus or a party invitation, but a subtle nudge to “get festive”,  whether employees want to or not. The office may be strung with lights, or the tinny sound of carols seeps through the cubicle walls and expressing “holiday spirit” becomes an unofficial part of the job. For many workers, the season generates a mix of fun, ritual, and tradition. For others, it brings something else: pressure, exclusion and the sense that their belief system or lack of it, isn’t as important than their willingness to just go along.

More than a decade ago, a department store employee in North Carolina found herself in exactly that position. She worked in gift wrap and objected, on religious grounds, to wearing a Santa hat and apron. When she refused, she was fired. Federal officials stepped in, and the case ended in a settlement that required the employer to pay $55,000 and provide training on religious accommodation. What may have started as a “fun” seasonal dress code became, in legal terms, religious discrimination.

That story is not an outlier. It is a reminder that holiday traditions at work—decorations, themed attire, parties, gift exchanges, operate inside the same legal framework as everything else an employer does. Yet every year, organizations behave as if the normal rules quietly loosen when the eggnog comes out .But as many unfortunate employers have learned,  they do not.

Take something as simple as decorations. A tree in the reception area or a neutral “winter” display rarely raises legal alarms. The problems start when employees feel that participation is mandatory or when they subtly pressured into adopting religiously or holiday themed décor. Employers should know better. It’s no secret that religious themes or objects displayed openly in the workplace, rather than a private, personal office area is discriminatory.

In Weltman v. Gates, an employee alleged that he was expected to put Christmas garland in his workspace and then disciplined after he declined. Although the court ultimately decided in the employer’s favor, this claim itself points to a recurring workplace issue: when an employer’s culture is expressed in a specific religious tradition, opting out can feel like career risk. It’s just not worth the exposure and expense to disrespect employee’s reluctance to participate, whether or not everyone else thinks that employee is being a Grinch.

Scheduling days off has become another point of contention. Year‑end is a busy time in many organizations. It is also when religious observances such as Hanukkah and Christmas intersect with workplace deadlines, especially when work involves year end accounting. For years, employers denied many requests for says off by claiming that any accommodation imposed more than a “de minimis” cost, a notoriously employer‑friendly standard. (“De minimis” is a Latin phrase meaning “about minimal things” or “too trivial to matter.” In U.S. employment law, it became famous in the old Title VII religious‑accommodation standard, where employers could deny an accommodation if it imposed more than a de minimis cost, essentially, anything beyond a very small or minor burden. In Groff v. DeJoy (2023), the Supreme Court rejected that extremely low bar and held that employers must now show a substantial increased cost or comparable hardship to refuse a religious accommodation, the wording being “undue hardship” on the business.)

Translated to the holiday workplace, that means an employer cannot casually dismiss a request for time off for religious observances, or a request to be excused from certain personal seasonal activities, simply because it complicates the employer’s schedule. Employees cannot be forced to choose between their religious convictions and their jobs.

What about forced joviality with certain “Holiday” attire. It seems  harmless on the surface. Ugly sweater contests are now commonplace. Many organizations encourage employees to wear red and green, or to participate in Christmas theme days. The trouble starts when “encourage” slides into “require,” and the required outfit carries holiday symbolism.

The case over the Santa hat and apron proves what is at stake. For the employer, the outfit was branding and festivity. For the employee, it was religious symbolism she could not in good conscience adopt. Title VII of the Civil Rights Act protects employees with sincerely held religious beliefs and requires employers to offer reasonable accommodation unless doing so would cause undue hardship. In practice, that often means something simple: allow the employee to wear standard dress or a non‑religious alternative.

As discussed in our last column, if there is one place where employers most often forget the law, it is the holiday party. It bears repeating because these gatherings occur after hours, at a restaurant or event space, and too many employers treat them as off‑duty fun. Legally, that is a miscalculation.

Courts and enforcement agencies widely treat employer‑sponsored parties as extensions of the workplace. Misconduct at these events—especially by supervisors—can expose the organization to liability just as surely as if it happened at noon in the conference room. In one enforcement action, authorities sued after a supervisor allegedly sexually assaulted an employee following a company holiday party. The fact that alcohol was involved did not erase the employer’s obligations.

The Supreme Court has made clear that employers can be held vicariously liable for harassment by supervisors unless they can show that they exercised reasonable care to prevent and correct it and that the employee unreasonably failed to use those safeguards. That standard does not pause for punch bowls and photo booths.

Regulators now explicitly recognize that harassment can occur in “a work‑related context outside of the regular workplace,” including employer‑hosted social events. In other words, an inappropriate comment on the dance floor, or a proposition over a cocktail, does not become harmless simply because the venue has a DJ.

The greatest caution is for the “after party” consequences. In the smartphone era, what happens at the office party rarely stays there. Photos and videos are instantly shared, tagged and archived. A crude joke captured on someone’s Instagram story, a picture of a manager groping a subordinate, or a clip of employees ridiculing a colleague’s religious observance can all make their way back into the office, sometimes in the form of a formal complaint, a headache that could last well into the New Year.

A common thread emerges when considering all these examples. For such bad behavior to proliferate, apparently nobody is quite sure what the rules are. Is participation in the gift exchange truly voluntary, or will non‑participants be seen as “not a team player” or be called a Grinch? Is the ugly sweater contest just for fun, or will managers quietly note who joins in? Is the party a professional space with expectations, or something closer to a no‑rules night out? Ambiguity is a breeding ground for both legal risk and interpersonal conflict. It is also, crucially, something organizations need to control.

Clearly define what the organization’s code of conduct for holiday related office procedures and behavior. Refer people to your employee handbook for specifics. Over and above the written word, employees will pay closer attention to what the boss’s model than to what they write. When a senior manager declines an ugly sweater day without blowback, it signals that opting out is okay. And, when executives step up and monitor alcohol consumption, shut down inappropriate jokes and respond promptly toinappropriate behavior, it signals that safety and respect are non‑negotiable.

Employers need to focus on what really matters to most employees: feeling appreciated, feeling safe and feeling free to be themselves without fear of reprisal. It means shifting from a default of “everyone does Christmas” to a broader, more flexible approach to recognizing the holidays at the end of the year. It means remembering that a hat, a party or a social media post is never “just fun” when someone’s job is at stake.

The department store worker who lost hers over a Santa costume forced an issue that should not ever repeat itself. And employers do not need to cancel the season to avoid legal trouble. They need to treat December professionally, like every other month of the year: one where respect, boundaries and the law still apply.

 “Holiday celebrations in the workplace should foster connection, not contention,” which is exactly the balance many organizations miss when “cheer” turns into pressure or exclusion.” – TREW HR

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Connect with Mary:

Mary T. O’Sullivan, Master of Science, Organizational Leadership, International Coaching Federation Professional Certified Coach, Society of Human Resource Management, “Senior Certified Professional. Graduate Certificate in Executive and Professional Career Coaching, University of Texas at Dallas.

Member, Beta Gamma Sigma, the International Honor Society. Advanced Studies in Education from Montclair University, SUNY Oswego and Syracuse University. Mary is also a certified Six Sigma Specialist, Contract Specialist, IPT Leader and holds a Certificate in Essentials of Human Resource Management from SHRM.contributing writer, business leadership.