When is an Employer Liable for the Acts of an Employee?

employer liability for employees

When an employee causes harm or damage to a third party, sometimes the employer can be held liable for that harm or damage, regardless of whether the employer intended to cause harm, was directly involved in the action of the employee, or even was aware of it.

Acts Done in the Scope or Course of Employment

An employer is liable for the acts of their employees as long as the employee’s act is done in the “scope or course of employment.” In legal circles, this concept is referred to the “doctrine of respondeat superior.” 

But what does it mean to be within the scope or course of employment? Generally, the employee’s act has to have been authorized by the employer, or the act has to have been so closely related to an authorized act that the law would find that the employer should be responsible for the employee’s act and any harm or damage that results from it. 

Many cases of employer liability will be decided based upon whether the employee is found to be acting within the scope of their employment or whether they were engaged in an act was so far outside of what the employer had authorized the employee to do that the employer will not be held liable. Questions to ask when making this determination typically include: “Was the employee doing their job or conducting business on behalf of the company when the harm occurred or were they acting on their own?” and “Did the harm occur during the employee’s regular work day or the company’s regular business hours?”.

Minor deviations, known legally as “detours,” may still be the responsibility of the employer, but a more significant deviation, known as a “frolic,” often release the employer from liability. However, even if the harm did not occur during the course of employment, another legal theory might still make the employer responsible for harm caused by the employee.

Negligent Hiring or Retention

An employer can be sued for the acts of an employee under the negligent hiring or negligent retention doctrine if the employer “knew or should have known” that an employee was dangerous or otherwise should not have been hired or kept on as an employee. 

For example, if an employee engages in a criminal act, such as assaulting someone, this would normally be considered to be outside of the scope of employment; however, if the employer knew or should have known that the employee was prone to assault, the employer can even be held liable for those acts. In that regard, an employer is always required to use reasonable care—especially when hiring employees. So if an employer is found not to have used reasonable care in hiring someone and a third party is injured, the employer can be held legally responsible.

Steps to Protect Employers from Liability

Employers can protect themselves from liability for the acts of their employees, or at least reduce the risk that they will be held responsible, by taking some simple steps. These include clearly articulating the employee’s responsibilities, working hours, and limitations, performing due diligence in the hiring process, and acting quickly upon any information that indicates that a current employee might pose a danger to others.

As part of its responsibilities, employers should verify information contained in resumes and employment applications, perform routine background checks (particularly when hiring employees for sensitive positions, with a lot of contact with the public, or for work with potentially vulnerable populations), and check driving records for employees whose responsibilities include operating a motor vehicle. These steps can help establish to the court that the employer took reasonable steps in the hiring process to reduce the risk of harm to others. 

Employers should also remember that their responsibilities do not end once an employee is hired. Action should be taken if an employee’s driving record deteriorates, if the employee makes threats to others, of displays other questionable behavior.

A qualified employment lawyer can help you to develop effective hiring procedures, determine what action to take if an employee becomes a problem, and advise on liability issues. To connect with an employment attorney near you, use our site by posting your employment law issue.

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Posted - 11/19/2018