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Employer's Liability for Acts of Employee

Posted by Dev Sethi | Apr 15, 2014 | 0 Comments

Employers are oftentimes responsible and therefore liable for the negligent or wrongful actions of their employees, which is a concept legally known as “Respondeat Superior.” Hence, if you are injured by the misconduct of someone else, the company or person that they work for may also be responsible to compensate you for your injury.

There are several reasons for holding employers or companies accountable for the actions of their employees. First, an employer or company's business naturally benefits from the work that their employees do, but by doing so, also exposes the public to potential risks. Therefore, although an employer will be entitled to gain profit from the good work that their employees do, they should also bear the responsibility of any injury that occurs due to the risk that they exposed the public to in the process. This policy encourages businesses to make sound choices in hiring, training and supervising employees as well as in deciding whether doing something in order to advance their business is worthwhile when balanced against the risk of injury to others it might create.

For example, let's say an employer wants to advance her pizza delivery business by expanding the area of service. This decision will obviously enhance her business because it will increase her customer base. However, in order for it to work, she will either need to hire more drivers or make the drivers she already has go on longer pizza delivery routes. Whether she puts more employees on the road or increases the amount of time that her employees have to drive, she is increasing the risk to the public that one of her employees will negligently get into a car accident with someone else. Therefore, she must decide if the increased business is worth the increased risk. In the event that she decides that it is, she is also likely to take every precaution necessary to minimize the risk, such as hiring employees with a safe driving record.

Another way of looking at it is that an employee is essentially replacing the employer because the employee is providing services that the employer would have to do himself if the employee didn't do them on the employer's behalf. In other words, an employer should not be able to avoid responsibility simply by delegating responsibilities to his employees. If this were the rule, business owners could easily avoid liability by giving the responsibility for all the more serious and risky aspects of the business to employees.

Finally, for public policy and consumer protection reasons, the concept of Respondeat Superior makes sense. As noted, an employer's business practices create benefits for the employer, but also create potential risks for the general public. Additionally, while employer's are more likely to have adequate finances or insurance to compensate an injured party who has suffered from their business activities, an employee working for them is less likely to have the same ability to compensate those harmed. Therefore, it is only logical to make those with the money and decision-making power responsible for the actions of their employees so that they are encouraged to make smart business decisions not only for their benefit, but for the benefit and protection of the public as well.

Vicarious Liability for Lent Employee
Torts-General Employer's Vicarious Liability for Lent Employee

Tarron v. Bowen Machine & Fabricating, Inc., 222 Ariz. 160, 213 P.3d 309 (App., Div. I, July 7, 2009)(J. Barker)

CONTRACT BETWEEN GENERAL EMPLOYER AND LENT EMPLOYEE IS NOT DISPOSITVE OF WHO HAS RIGHT TO CONTROL AND CAN BE VICARIOUSLY LIABLE FOR ACTS OF LENT EMPLOYEE

Plaintiff, a Phelps Dodge employee, fell through a gap between a platform and ramp at the mine that was created by defendant Bowen Machine's employees. Plaintiff sought to hold Bowen vicariously liable under the doctrine of Respondeat Superior for their employees' negligence. Bowen defended claiming the employees had been "lent" to Phelps, Phelps had the right to control them and therefore Bowen was not vicariously liable for their actions. The trial court granted partial summary judgment for the plaintiff on this issue finding Bowen's contract with Phelps gave it control over the employees. A jury awarded the plaintiff $1.5 million and found Bowen 60% at fault. Bowen appealed arguing it and not plaintiff was entitled to summary judgment on the issue of control of the lent employees.

First the Court of Appeals set forth the "lent employee" doctrine which holds when a general employer (Bowman) lends an employee to a special employer (Phelps) the lent employee is treated as the special employer's employee unless the general has control or the right to control the lent employee. The "right of control" as opposed to actual exercised control is the key. Here the general retained the right to control in its contract with Phelps, but in fact Phelps exercised control in the manner in which the lent employees performed their work.

When, as here, both the general and special employer have control, liability should be allocated to the employer in the better position to take measures to prevent the injury. Here the evidence was uncontroverted that Phelps in fact exercised exclusive control over these employees in their work involving the moving of the ramp. Further, a Bowen supervisor testified that the contract which provided "[Phelps] will have no direction or control as to the method of performance of the work" did not apply to this specific job and in fact Bowen would have had no right to come in and tell them how to perform their work on the ramp. Accordingly, the Court of Appeals held there was a question of fact for the jury as to who controlled the lent employees in the creation of the hazard and that partial summary judgment was inappropriate.

About the Author

Dev Sethi

Dev Sethi litigates and tries a wide-range of complex injury and death cases throughout Arizona. He has Martindale Hubbell's highest rating, AV, and he is listed in "Best Lawyers." Dev is also recognized as an Arizona Super Lawyer in the area of plaintiff's products liability litigation.Dev has been at the forefront of auto product defect litigation. He played a key role in uncovering the Goodyear Load Range E tire scandal and worked to hold Ford Motor Company responsible for the danger posed by their now notorious 15-passenger vans. Dev is currently representing families in product liability suits against the nation's largest corporations including General Motors, Ford, Pentair Pools and Invacare.

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