What Liabilities Do Employers Potentially Face?
It is every employer’s worst nightmare. You have built up your music store from a small storefront on the edge of town to a sizable business employing dozens of people. You have a beautiful showroom in a great location and developed substantial goodwill in the community. You do your best to carefully select your employees and train them well. You have consulted counsel and enacted detailed policies governing your employees. You take reasonable steps to monitor what they are doing on the job, and you are pleased with their work. Things are going great.
Then, one warm, spring day, an employee does something unexpected and awful. After a difficult breakup with his girlfriend and other personal problems, he gets into an argument with a customer who reminds him of the fellow dating his ex-girlfriend. Out of the blue, he punches the customer in the face, causing serious injuries. Although this occurred in your store during business hours, you are certain that your employee only did this for his own personal reasons. The victim has sued your business because of conduct that you did not authorize and that had nothing to do with the functioning of your business. Now what? You can’t possibly be responsible for your employee’s unpredictable and intentional conduct. Or can you?
The Law Governing Employer Liability
Every lawyer knows that the law can hold employers liable for torts committed by their employees in many circumstances. The most obvious cases are those involving employee negligence in the performance of their work duties. From the delivery man involved in an automobile accident to the sales clerk who negligently fails to clean up a spill, those cases involve the employer being held vicariously liable for the employee’s negligence, without regard to the employer’s culpability. The doctrine of respondeat superior provides that the employer is called to answer for the tortious acts of an employee, when those acts occur in the course and scope of the employee’s employment.1 If the employee is acting in furtherance of his employer’s business, he will be regarded as acting within the scope of his employment, even if he exceeds his authority.2 In those cases, the employer’s culpability is irrelevant, as liability is imposed simply by virtue of the employer-employee relationship. There is little controversy over whether an employer may face liability in those cases.
When the employee’s conduct is intentional, rather than merely negligent, the question of vicarious liability will turn on whether the employee’s acts are in the course and scope of employment. In other words, a bar might be liable for a bouncer’s assault of a patron being removed for unruliness. A store may be liable for a loss prevention agent’s overzealousness in apprehending a shoplifting suspect. The focus is on whether the employee was acting, at the time, in furtherance of the employer’s business.
Liability for Acts Outside the Course and Scope
In many cases, however, intentional torts are not committed in the course and scope of employment. As in our example, employees often engage in intentional torts for purely personal reasons. Such circumstances, where an employee intentionally harms someone for reasons not connected to his work duties, presents a much more complicated question. In those cases, vicarious liability under a theory of respondeat superior would generally not apply.3 However, that does not end the story.
Even where an employee acts outside of the scope of his employment, the employer still might face liability for failing to properly hire, train or supervise the employee. While this sounds like a broad swath of potential liability, in reality injured persons have a heavy burden to hold an employer liable for purely personal attacks by employees.
South Carolina follows the approach of the Restatement, under which an employer may be liable for negligent hiring, supervision or retention if the employee “intentionally harms another” when the employee:
- is upon the premises of the employer, or is using a chattel of the employer;
- the employer knows or has reason to know that it has the ability to control its employee; and
- the employer knows or should know of the necessity and opportunity for exercising such control.4
This test, thus, focuses on a property-based nexus to the employer and the employer’s knowledge. Under this theory of liability, the employer’s liability is direct, not derivative.5
Involvement of the Employer’s Property
The first line of inquiry is whether the tort occurs on the employer’s real property. In cases such as our example, this is a straightforward analysis. If the incident occurs on the employer’s premises, the first element of the Degenhart test is satisfied.
However, if the tort occurs off the employer’s premises, so that the plaintiff must rely on the employee’s use of the employer’s personal property, the analysis is more challenging. Then the inquiry turns to whether the employer’s chattel is used to commit the tort. In those cases, the plaintiff must show that the employer’s personal property was in use at the time the third party is harmed.6 It is insufficient for plaintiff to allege the use of an employer’s chattel at some time prior to the harm or injury.7 There must be a nexus between the chattel and the commission of the tort. In other words, the employee must be use the chattel in the actual performance of the intentional tort. Thus, for example, if a security guard is given a weapon by his employer that he uses off the employer’s premises to injure a victim, this element might be satisfied.
In Kase, the Court of Appeals found that the plaintiff’s negligent supervision claim could not proceed as a matter of law because the defendant employee had already exited the company vehicle when the employee attacked the plaintiff following a vehicular accident.8 The attack did not occur on the employer’s premises. The Court recognized that the altercation itself (and resulting harm to the plaintiff) did not involve the use of the employer’s chattel (the vehicle), and as a result, the employer could not be liable as a matter of law.9 In other words, even though the employer’s chattel (the car) is what placed the employee in the position to assault the plaintiff, liability would not exist because the employee did not actually use the car to assault the victim. Had the employee intentionally run a victim over with the employer’s vehicle, the result most likely would have been different.
The Employer’s Degree of Knowledge
The more difficult issues in these cases typically involve the employer’s knowledge, specifically whether the employer knew or should have known of the ability, necessity and opportunity to exercise control over its employee.10 At the forefront, the employer’s knowledge that an employee is generally a “bad person” will not be sufficient to support liability. Vague premonitions are not enough. Believing that an employee is “weird” or questionable in some way will normally not suffice.
The employer’s knowledge must relate to a specific employee, not claims of “an unprofessional and poorly trained staff who should have been replaced.”11 Additionally, there must be evidence of actual knowledge (or constructive knowledge) by the employer, not mere speculation about what the employer might have known.12 Moreover, there should be knowledge of a specific risk posed by that particular employee.13 An employer “‘may subject himself to liability . . . by retaining in his employment servants who, to his knowledge, are in the habit of misconducting themselves in a manner dangerous to others.'”14 “[M]any courts have recognized that a plaintiff must demonstrate some propensity, proclivity, or course of conduct sufficient to put the employer on notice of the possible danger to third parties.”15 A single isolated incident of prior misconduct (of which the employer knew or should have known) may support a claim, if that prior misconduct has a sufficient nexus to the ultimate harm.16
Obviously, the clearest cases are those where the evidence shows that the employee had a history of violence toward the particular victim.17 Thus, where an employer knows about another incident of identical inappropriate sexual behavior by an employee against the same victim, this may be sufficient to satisfy the knowledge requirement.18
It will not be sufficient if the employer’s knowledge is not connected to the actual harm committed by the employee. In other words, knowledge of danger “X” does not automatically require the employer act to prevent danger “Y.” For example, in one federal case, the court rejected an attempt to impose liability on an employer whose employee allegedly used her cell phone in the employer’s company car when she struck and killed the plaintiff cyclist.19 The court held that the employee’s previous speeding tickets (during her employment) and a low-speed rear-end collision (while possibly using her phone) were insufficient to suggest to the employer that “entrusting [the employee] with a cell phone and automobile would pose an unreasonable risk of harm to the public.”20 There was no evidence that the accident killing the cyclist was caused by excessive speed, making the speeding tickets of minimal importance. Moreover, there was no evidence to establish that the prior rear-end accident was the result of the employee’s use of her cell phone. The Court stated that “King’s past conduct does not rise to a level at which Siemens would be put on notice that she presented an unreasonable risk of harm to the public.”21 Because there was no “sufficient nexus between conduct that would put [the employer] on notice of a need to control [the employee] and the conduct that caused the harm suffered in this case,” the court dismissed the plaintiff’s claim of negligent supervision.22
A takeaway from the cases is that the employer is, once placed on notice of a specific risk from the employee, required to undertake proper steps to protect foreseeable victims from his intentional torts.23 In other words, once you learn of a need to control your employee, you may need to act (even if you did not possess that knowledge earlier in the employer-employee relationship or before hiring the employee). An employer cannot rest on its initial analysis of a potential employee; it must act in light of the facts it learns during the course of employment of that employee.
What Must the Employer Do?
Once the employer learns it has the ability, need and opportunity to control his employee, the next question is what, exactly, must the employer do to discharge that duty? Unfortunately, as with most questions posed to a lawyer, the answer is a definitive and resounding “It depends.”
The law speaks in terms of the need to exercise “control” over the employee, but does not definitively define what is meant by control. Depending upon the circumstances, such control could take the form of additional supervision of an employee. It could involve electing not to entrust the employee with a chattel that poses a danger to others, such as a company vehicle. It could take the form of additional training of the employee. Sometimes, the only effective control the employer can exercise over his employee is to fire the servant; thus, an employer “may subject himself to liability . . . by retaining in his employment” employees with a habit of conduct that is dangerous to others.24 In any event, once the employer learns of the need to exert control, he must undertake reasonable steps to do so. Inaction is not an option.
What About Former Employees?
An interesting question that sometimes arises is what happens with regard to employer liability for intentional torts committed by a former employee. If you fire an employee, can you be responsible if that employee, sometime in the future, intentionally harms another person? What if the employer knew, while the employee was working for him, that the employee posed some risk to other people?
Obviously, this is outside of the scope of the Degenhart theory of liability, insofar as the employer has no ability to control the employee after the end of the employment relationship. Although South Carolina has not specifically addressed the issue, the most likely result is that the employer may not be held liable for the conduct of a former employee.25 This result is consistent with South Carolina law, under which foreseeability is determined from “the defendant’s perspective at the time of the alleged breach.”26 To date, South Carolina has not imposed liability for a former employee’s intentional harm of an unknown person after the cessation of employment.
 See Hamilton v. Davis, 300 S.C. 411, 416, 389 S.E.2d 297, 299 (Ct. App. 1990) (quoting Cantrell v. Claussen’s Bakery, 172 S.C. 490, 174 S.E. 438 (1934)).
 See Armstrong v. Food Lion, Inc., 371 S.C. 271, 639 S.E.2d 50 (2006) (“The act of a servant done to effect (sic) some independent purpose of his own and not with reference to the service in which he is employed, or while he is acting as his own master for the time being, is not within the scope of his employment so as to render the master liable therefor.”).
 See Degenhart v. Knights of Columbus, 309 S.C. 114, 420 S.E.2d 495 (1992); Kase v. Elbert, 392 S.C. 57, 64, 707 S.E.2d 456, 460 (Ct. App. 2011) (adopting Restatement (Second) of Torts § 317).
 See Doe v. Bishop of Charleston, 407 S.C. 128, 140, 754 S.E.2d 494, 500 (2014), reh’g denied (Mar. 6, 2014).
 See Degenhart, 309 S.C. at 116-17, 420 S.E.2d at 496; Kase, 392 S.C. at 64, 707 S.E.2d at 460.
 See Kase, 392 S.C. at 64, 707 S.E.2d at 460.
 See id.
 See id.
 See Hoskins v. King, 676 F. Supp. 2d 441, 446-47 (D.S.C. 2009); Charleston S.C. Registry for Golf & Tourism, Inc., 359 S.C. at 645, 598 S.E.2d at 722-23 (affirming judgment for law firm whose lawyers had no knowledge of associate’s outside business activities); Brockington v. Pee Dee Mental Health Ctr., 315 S.C. 214, 433 S.E.2d 16 (Ct. App. 1993) (affirming judgment for mental health center where defendants had no knowledge that would alert them to potential for sexual assault by employee).
 See Williams v. Preiss-Wal Pat III, LLC, 17 F. Supp. 3d 528, 538 (D.S.C. 2014).
 See Hollins v. Wal-Mart Stores, Inc., 381 S.C. 245, 253, 672 S.E.2d 805, 809 (Ct. App. 2008) (“[A]bsent evidence Wal-Mart either was aware of the incident or should have been aware of it, the trial court properly excluded the evidence as irrelevant.”).
 See Brockington v. Pee Dee Mental Health Ctr., 315 S.C. 214, 218, 433 S.E.2d 16, 18 (Ct. App. 1993) (“[N]othing that the defendants gathered from Davis, co-workers at the Hartsville office, or elsewhere about either Davis’ personal history or his work activities alerted the defendants that Davis would engage in predatory homosexual activity or other inappropriate sexual conduct with clients and with Brockington in particular.”).
 See Hollins, 381 S.C. at 218, 433 S.E.2d at 18 (quoting Restatement (Second) of Torts § 317, cmt. c).
 See Doe v. ATC, Inc., 367 S.C. 199, 206, 624 S.E.2d 447, 451 (Ct. App. 2005).
 See id., 367 S.C. at 207, 624 S.E.2d at 451.
 See Westmoreland v. AB Beverage Co., No. 1:05-3475-MBS, 2007 WL 2749450, at *6 (D.S.C. Sept. 20, 2007) (“Although there is evidence that Defendant Varnadore may have been verbally confrontational and combative, she and Plaintiff had been friends for many years and she never had been involved with violent disagreements with him or with any other employee.”).
 See Doe by Doe v. Greenville Hosp. Sys., 323 S.C. 33, 40-41, 448 S.E.2d 564, 568 (Ct. App. 1994) (“[A]fter the first incident, the hospital was aware of the allegations of inappropriate behavior, although denied by the employee. The hospital was aware the alleged conduct involved a minor.”). But see Moore by Moore v. Berkeley Cty. Sch. Dist., 326 S.C. 584, 591-92, 486 S.E.2d 9, 12 (Ct. App. 1997) (“Absent some evidence indicating notice to the District of Steward’s inappropriate sexual proclivities, there is no basis to conclude the District knew or should have known of the necessity for supervising her conduct outside the classroom.”).
 See Hoskins, 676 F. Supp. 2d at 446-47.
 See id.
 See id., 676 F. Supp. at 447.
 See id.
 Brockington v. Pee Dee Mental Health Ctr., 315 S.C. 214, 218, 433 S.E.2d 16, 18 (Ct. App. 1993) (“Immediately upon receiving allegations of Davis’ sexual misconduct, they isolated Davis from their clients and launched an investigation. The investigation led to Davis’ termination from employment as well as to his prosecution, conviction, and sentence for sexual offenses.”).
 See Restatement (Second) of Torts § 317 cmt. c.
 See e.g., Roe No. 1 v. Children’s Hosp. Med. Ctr., 16 N.E.3d 1044 (Mass. 2014) (“While there is little doubt that Children’s Hospital had a duty to supervise and monitor Levine’s conduct while he was employed as a physician there, and owed a duty of reasonable care to his minor patients to prevent foreseeable harm to them, that is not this case. We have never recognized or imposed a duty on an employer to prevent the future behavior of a former employee, with respect to unknown customers and clients of unknown future employers.”); Philips v. TLC Plumbing, Inc., 172 Cal. App. 4th 1133, 91 Cal. Rptr. 3d 864 (Cal. App. 4th Dist. 2009) (“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.”); Coleman & Co. Sec., Inc. v. Giaquinto Family Trust, 236 F. Supp. 2d 288, 304 (S.D.N.Y. 2002) (“While Coleman would be liable for failing to properly supervise Jedrlinic before September 1996, it owed no such duty to supervise Jedrlinic — as an investment advisor or broker — when Jedrlinic was employed with J. Robbins, Inc. after that time.”).
 See Parks v. Characters Night Club, 345 S.C. 484, 491, 548 S.E.2d 605, 609 (Ct. App. 2001).