Employer Liability for the Acts of its Employees

Under a variety of legal theories, state courts have held employers liable for the acts of their employees.  Employers have been found liable for injuries caused by their employees to coworkers, customers and the general public.  Whether an employer’s risk of being liable for an injurious action by an employee is mitigated or increased depends upon the actions an employer takes well beforehand. 

Under the legal doctrine known as “respondeat superior,” an employer is legally responsible for the acts of its employee when the employee is acting within the course and scope of employment.  In other words, an employer is generally liable if at the time of the act the employee was doing his job or otherwise acting on behalf of the employer.  The legal doctrine treats the liability as a cost of doing business for the employer, but the employer might not be liable if the employee acted independently or out of personal motives.  For instance, an employer may be liable if an employee causes an auto accident while driving and he was using his cell phone at the time to conduct business.

Careless hiring and retention of employees is another potential legal theory for employer liability.  An employer may be liable for the acts of its employee, even if outside the scope of their employment, if the employer did not take reasonable care in hiring and retaining the employee.  For instance, an employee’s criminal history of violence may result in employer liability if the employee assaults a customer.  However, the employer is liable only if it acted negligently in its hiring or retention (i.e. the employer knew or should have known that the employee was unfit for the job).

Although an employer cannot completely eliminate the risk of being liable for the acts of its employees, it can take steps to minimize the risk.

● During the hiring process carefully review the applicant’s answers relating to reasons for leaving past employment and any listed criminal convictions.  Additionally, verify information listed on the application and resume, and consider conducting a background check – keeping in mind that there are state and federal laws limiting the type of information you can seek without an applicant’s written approval.

● Establish and enforce written policies that forbid employee activities that may cause liability.  However, failure to enforce policies may be worse than having no policies at all.  Failure to enforce a policy arguably shows that the employer knew what was unreasonable behavior, but failed to prevent it.

● Train supervisors about laws regarding employer liability and company policies to minimize such liability.