This excerpt comes from Don’t Get Sued! A Guide to Help Reduce Your Business’s Exposure to Lawsuits, written by attorney Roger K. Gelb. Chapter 3 tackles a question many owners ask: when does employer liability for employee conduct actually apply?
When Your Business Is Liable for an Employee’s Intentional Act
If one of your employees injures one of your invitees, is the business liable? The answer is sometimes. In general, when an employee intentionally injures an invitee, the store usually is not liable, unless you knew or should have known that the employee might act that way. Beyond that, your insurance coverage probably will not pay for the loss either. So the key question is what you knew, or should have known, about the employee’s history.
Watch for Red Flags
Whether you actually knew about an employee’s violent tendencies is the easy part. The harder question is when you should have known about them. Therefore, watch for obvious red flags, such as a bad temper that the employee shows in front of you and others. If that temper turns into violence, and witnesses see it, your business may be on the hook when the employee later injures an invitee.
Use an Employee Handbook
A clear employee handbook, given to every worker, is a smart safeguard. The handbook should address many topics, including appropriate workplace dress, how to interact with coworkers and customers, acceptable workplace behavior, vacation time, sick leave, and any rules unique to your business. Be sure to collect a signature from each employee confirming that they received the handbook and agreed to follow the rules.
The handbook differs from an employment contract, which I urge you not to provide. An employment contract may lock in pay and benefits, but it almost always addresses termination as well. In most cases, such agreements only place unnecessary restrictions on when and how you can fire someone. Without one, an employee is usually an “employee at will” and may be let go for almost any reason. Of course, most jurisdictions still prohibit firing based on race, religion, sexual orientation, and similar protected characteristics.
Negligent Acts and Respondeat Superior
What if your employee negligently injures a customer? In that situation, your business is generally liable under the doctrine of respondeat superior. That phrase simply means an employer answers for the negligent acts of its employees. You can read a plain-language explanation at the Cornell Legal Information Institute. Fortunately, appropriate insurance coverage should handle these claims.
If you have been injured, our experienced personal injury lawyers and premises liability lawyers are available for a free consultation.
