When will my business be liable for the actions of my employees?

Liability in business is based on respondeat superior, which is the sentiment that a business cannot justly disclaim responsibility for accidents that may fairly be said to be characteristic of its activities.  But the limits on a business’s liability are based on foreseeability combined with their scope of employment.  The Restatement (Second) of Agency §228 states that an employee’s conduct is not “within the scope of employment if it is…too little actuated by a purpose to serve the master.”  This means that an employee must be working for the benefit of the employer and or doing something for the employer, and the purpose of their actions must be benefitting or serving their employer also.  Coupled with scope of employment requirement is foreseeability.  The actions that produce the liability must be reasonably anticipated the employer.  Just because an action is related to or within the scope of employment does not mean that the employee’s action is foreseeable.  Some of the following examples of outcomes from different states illustrate how different states have ruled in different situations:

 

In New York a dry dock owner was successful for damages to his dry-dock when a Coast Guard seaman was returning to his vessel and accidentally flooded the dock where the sailor’s vessel was located.  The accident happened after hours, and not while the seaman was on duty, but because the seaman was under order to sleep in the vessel the accident was reasonably foreseeable for the Coast Guard to take precautions against.

 

In Utah, a restaurant supervisor for a ski resort was required to ski between different restaurants within the resort and severely injured another skier after launching himself off of a blind jump at a high rate of speed.  Even though the employee didn’t go directly from one restaurant to the other, the Supreme Court found that the deviation was not substantial enough to constitute total abandonment of his employment, and thus the resort was held liable for supervisor’s actions.

 

In Massachusetts, the Baltimore Orioles were held liable for injuries to a fan cause by a pitcher who was warming up in the bullpen.  The fan was heckling the pitcher as he was warming up and the pitcher responded by throwing a ball directly at the fan, which passed through the chain-link fence and hit the fan in the face.  The court found that the pitcher’s actions could reasonably be a response to continuing conduct which was presently interfering with his ability to pitch in the game if called upon to play, and not just a mere retaliation for past annoyance.

 

In sum these examples will help you realize the risks to which your employees might expose your business.  Each jurisdiction has its own rules, so make sure that you are aware of those specific statutes before making any business decisions that will affect your business’s liability and risk.

 

Photo By: Moyan Brenn