Generally, employers may be held liable for negligent hiring decisions.
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Employment Law Update
Plumbing Contractor
Not Liable For Former
Employee’s Criminal Act
By Christopher W. Olmsted
When a company negligently hires and retains a worker with dangerous propensities, it can be held liable for harm that the worker causes to customers, co-workers, or others. For example, if a company hires a recently convicted violent felon to work unsupervised in customer homes, the company may be held liable if the worker assaults the homeowner while working in the home.
How Far Does It Go?
How far does this legal doctrine go? What if the worker and the customer come into contact during the course of employment, but the violent act occurs after termination? An appellate court answered this question for the first time in California.
The case is titled Phillips v. TLC Plumbing, Inc., and it tells a tragic story. In 1999 TLC employed James Cain as a plumbing service repairman. The company was aware that Cain was on parole and apparently had been convicted of a domestic violence and/or arson offense involving his then wife.
A few years later, in April 2003, TLC dispatched Cain on two service calls to Judith Phillips’ residence. The next month, TLC terminated Cain's employment for misuse of a company vehicle, drug and alcohol use, and threatening a coworker.
Cain and Phillips began a social relationship in April 2003 after his first service call. Their relationship seemingly evolved over time into a romantic one. About two years later, after Ms. Phillips had ended their relationship and applied for a restraining order against Cain, he shot and killed her. Later he was convicted of murder.
The General Rule
Generally, employers may be held liable for negligent hiring decisions. The court in Phillips considered this general rule. Quoting case precedents, the court wrote: “An employer may be liable to a third person for the employer's negligence in hiring or retaining an employee who is incompetent or unfit.” This would include, of course, not only workers who cannot safely perform their work, and those who are known to be reckless, but also workers with violent propensities.
It is a matter of making the employer bear the loss it has caused for making negligent decisions. “Liability for negligent hiring,” wrote the court, “is based upon the reasoning that if an enterprise hires individuals with characteristics which might pose a danger to customers or other employees, the enterprise should bear the loss caused by the wrongdoing of its incompetent or unfit employees.”
According to the general rule, merely hiring a worker who turns out to be incompetent, careless or vicious is not enough to create liability. The company must have had reason to know of an unreasonable risk of harm. In other words, as the court wrote, “negligence liability will be imposed on an employer if it ‘knew or should have known that hiring the employee created a particular risk or hazard and that particular harm materializes.’” Thus, if an employer should have conducted a criminal background check on a worker, and doing so would have revealed a history of violent crimes, it could be said that the employer “should have known” of the risk of harm. (Note: this does mean that all employers must necessarily conduct criminal background checks for all positions.)
No Liability For Post-Termination Misconduct
The court analyzed the general rule and determined that the duty of care exists only during the employment relationship, not after termination.
The court wrote: “Because the employer-employee relationship ends on termination of an employee's employment, we conclude an employer does not owe a plaintiff a duty of care in a negligent hiring and retention action for an injury or other harm inflicted by a former employee on the plaintiff even though that former employee, as in this case, initially met the plaintiff while employed by the employer.”
The court found no precedent for this rule in California, but found analogous cases in Ohio, Hawaii, Alabama and New York.
Buttressing its decision, the court also reasoned that here the crime in question had no cause-and-effect relationship to Cain’s job duties.
Though this case eliminates or at least limits employer liability for acts taking place after termination, employers ought to take note of the potential for liability arising from employee criminal acts during the course of employment. For example, had the plumber committed the crime while still employed by TLC Plumbing, the outcome of the case may not have been as favorable (though the consensual romantic relationship may have foiled the lawsuit in any event). As suggested in the “Practical Tips” section below, employers should take appropriate steps to limit liability.
Practical Tips:
Require applicants to disclose criminal histories (note: California law imposes restrictions). Take steps to verify employment history.
In certain contexts, it is prudent to conduct background checks, including criminal histories prior to the start of employment.
Take appropriate screening precautions where employees will come into contact with customers, children, or other members of the public.
Verify that employees are properly trained and experienced to perform job duties, particularly particularly where there is a risk of injury to self or others.
Terminate employees who exhibit reckless, dangerous or vicious propensities.
More Legal Update articles.
Download entire May 2009 Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2009 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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