In today’s hyper-litigious society, employers must perform reasonable investigations of new hires and remain attentive to conduct of tenured employees, to ensure that an employee does not present an unreasonable risk to others.
Types of Claims
Employers have faced claims for negligently hiring a new employee, negligently retaining a bad employee and/or negligently supervising a wayward employee. A Negligent Hiring claim asserts that the employer did not exercise reasonable care when hiring the new employee, whose dangerous tendencies or incompetence for the job at issue, would have been evident from a reasonable pre-employment investigation of the new employee’s background. Similarly, a Negligent Retention claim asserts that an employer retained an existing employee who was known by the employer to have dangerous tendencies or be incompetent for the job at issue (e.g., the employer knew from the employee’s work records, prior complaints, disciplinary reports or prior observed misconduct). A Negligent Supervision claim involves the same elements as a Negligent Retention claim, but typically focuses on misconduct occurring on the employee’s property (e.g., in the store) or under other circumstances where the employer could have exercised direct control over the employee. All three claims require a showing of injury proximately resulting from the employee’s acts. See gen. Kwang Bok Yi v. Open Karaoke Corp., No. 2016-11486, 2018 WL 2224984, at *1 (App. Div. 2d Dept May 16, 2018)
These types of claims typically are asserted against an employer by third parties injured by an employee – such as customers or passers-by. Worker’s Compensation rules generally preclude one employee from asserting such claims against their employer based on conduct by a fellow employee. Worker’s compensation programs are usually an aggrieved employee’s only remedy against an employer unless the aggrieved employee can show that the employer deliberately sought to cause the injury complained of. Ferris v. Delta Airlines, 277 F3d 128, 138 (2d Cir. 2001).
Employer’s also have a technical defense that would enable dismissal of a Negligent Hiring, Retention or Supervision claim if alleged injury occurred during the offending employee’s execution of his/her duties (e.g., a company truck driver with a history of driving infractions causes a car accident or a bar bouncer with a criminal assault record breaks a patron’s nose while forcibly removing the patron from the bar). Where “an employee is acting within the scope of his or her employment … no claim may proceed against the employer for negligent hiring or retention.” Karoon v. New York City Tr. Auth., 241 A.D.2d 323, 324, 659 N.Y.S.2d 27 (1st Dept. 1997); Troy v. City of New York, 160 A.D.3d 410, 70 N.Y.S.3d 842 (2nd Dep’t 2018). This, however, is of limited practical utility because the employer remains liable for the employee’s conduct under a theory of respondeat superior. Lara-Grimaldi v. Cty. of Putnam, No. 17-CV-622 (KMK), 2018 WL 1626348, at *24 (S.D.N.Y. Mar. 29, 2018) (citing Karoon., 659 N.Y.S.2d at 29). “[I]f the employee was not negligent, there is no basis for imposing liability on the employer, and if the employee was negligent, the employer must pay the judgment regardless of the reasonableness of the hiring or retention or the adequacy of the training.” Id.
Employer’s Prophylactic Measures
What constitutes reasonable investigation or oversight of an employee (whether pre-employment or continuing supervision) necessarily varies with the nature of the employee’s position. It stands to reason that the potential for an employee to cause injury depends on the level of authority possessed by the employee, the risk associated with the employee’s position and the extent to which the employee will interact with the public. The type and comprehensiveness of the investigation of the employee vary accordingly. Of course, if an employee or potential employee is known to have been involved in an offending incident in the past, the level of scrutiny should increase. Thus, senior/supervising employees or those with direct and regular public contact require more extensive background checks than laborers who work exclusively in back-office or warehouse roles. Likewise, a driver who has never had a traffic ticket over the past 5 years, may require less continuing oversight than a similarly positioned driver with a recent road rage conviction.
The employer should take prompt and consistent action to investigate claims of employee misconduct and appropriately punish wrongdoers – including terminating employment if the offense so warrants. Promptly and appropriate responses to employee bad behavior can help avoid or mitigate third party claims.
The employer should take care to accurately document its background investigation and oversight efforts. In case litigation arises, it will be helpful to have records showing that the employer acted reasonably under the circumstances. Conversely, an absence of records or materials showing that the employer ignored “red flags” can be very problematic at trial.
Of course, the employer must be discrete and judicious in the use of information it acquires when conducting an investigation or oversight of employees. Federal, state and local law limit whether and how an employer may use an employee’s criminal conviction, arrest record, driving record, credit history, past bankruptcy or participation in other litigation.
For further information or assistance with any pending or potential matter, please contact Jonathan Faust, at Wilson Keadjian Browndorf LLP, 212.660.9555 or firstname.lastname@example.org.
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