When is an Employer Liable for an Employee’s Bad Actions/Negligence?

It may seem unfair to be held liable for someone else’s unsavory or reckless behavior. But this is a situation that Texas businesses can face.  Employers can, in some cases, be held liable for an employee’s bad actions or negligence. Here is a look at what this entails and how you, as an employer, can take necessary precautions to reduce your risk.

Vicarious Liability

Employers can be vicariously liable for the actions of their employees due to a legal doctrine called respondeat superior, which is Latin for “let the superior answer.”  If the employee is doing their job (and essentially acting on the employer’s behalf) and an incident takes place, the employer will generally be held liable for the outcome and subsequent damages.

Common examples of vicarious liability include a server burning someone with scalding hot coffee or an employee hitting a pedestrian while driving a company vehicle.  Similarly, a hospital could be held liable for injuries caused by a nurse giving a patient the wrong medication. This doctrine applies only if the employee is acting within the course and scope of employment.

The purpose of respondeat superior is to ensure employers bear some responsibility for their employees’ actions, which is part of the cost of doing business.  Vicarious liability allows an injured party to sue the employer, who is more likely to have more substantial financial resources than the at-fault employee. The injured party would be able to turn to the business for restitution and have a greater likelihood of being compensated.

Negligent Hiring and Supervision

In Texas, it is possible for an employer to be sued for negligent hiring or supervision.  An employer is liable for negligent hiring when a plaintiff proves that an employer hired a worker known to be unfit or incompetent (or who they should have known was unfit or incompetent), causing an undue risk of injury to others.

However, the Texas Civil Practice and Remedies Code does prohibit most causes of action based on an employee’s criminal background. Texas law limits negligent hiring and supervision claims against employers, general contractors, and premises owners solely for hiring employees who have been convicted of a criminal offense.

The goal of the law, Texas H.B. 1188, is to raise employment levels and allow job seekers with criminal records to become self-sufficient citizens. This is in response to the fact that applicants with criminal records receive a lot fewer job offers compared to job seekers without criminal records.

Resolving Disputes

Employer liability disputes may be resolved in several ways. In many cases, the injured party and the company can reach a settlement agreement outside of court through a method of alternative dispute resolution, such as mediation or arbitration.

If this fails, the plaintiff can file a lawsuit in civil court. The court will then determine if the employer is liable for the employee’s actions. If so, the plaintiff could be awarded financial compensation.

How to Reduce Liability

Employers can reduce their liability and stay out of legal trouble by doing the following:

  • Perform background checks. Run background checks before hiring applicants. Verify information on resumes, look for criminal convictions, and check driving records. These simple steps will help you know who you are considering.
  • Carefully screen workers who will have a lot of public contact. You will be held more responsible for a worker’s actions if they work with the public. Workers who go to a customer’s home, workers who deal with children and the elderly, and workers who have access to weapons need to be even more thoroughly screened.
  • Get rid of problem employees immediately. Under the theory of negligent retention, you can be held liable for keeping a worker on your payroll after you learn that the worker poses a potential danger. If an employee has harmed customers or has had a few traffic violations, you should take immediate action to legally protect yourself.
  • Ensure your business has adequate general business liability insurance, which covers most types of non-vehicular incidents.  Employers whose employees drive company vehicles should ensure they have good vehicle liability insurance, as well.

Contact Our Frisco Employment Law Attorneys Today

As an employer, you have a lot at stake. You must be careful when hiring employees to represent your business because you could be held liable for their actions.

The employment attorneys at Simon Paschal PLLC can help you understand vicarious liability and how an employee’s actions while on duty can affect you as an employer. To schedule a consultation with our office, contact us online or call (972) 893-9340.

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