It is that literal. I am going to graduate school for higher education, and I am currently taking Law in Higher Education. So, I asked my professor to elaborate about whether alcohol present in front of pledges constitutes under the legal definition and he said yes, because the pledges could feel obligated due to their status within the situation, and therefor be 'discomforted.' He said hazing laws all are vague and usually whatever would cause discomfort, but certain state have specifics and degrees of hazing outline in their state laws.
I think hazing laws are ridiculous in regards to its broadness, but its there. It all depends on what a school wants to take action on. At my school, we were told that if a pledge is at a party, leave, because you can't drink with them or be around alcohol with them. Of course, we nor anybody followed this. It was one of those things you say when certain people are around.
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