As employers, agency owners need to be aware of the ways they can get in trouble due to the actions of their employees. Many owners are probably aware that they can be held liable for acts of their agency’s employees committed while performing their duties on behalf of the agency. This legal concept is known as vicarious liability, or respondeat superior. It is the reason why all employers should adopt policies regarding the use of cell phones by their employees while driving a motor vehicle on agency business. (click here to find out what happened to a Georgia employer whose employee was looking for their cell phone when they ran into the back of another motor vehicle)
However, vicarious liability is not the only way that an agency can be held liable for the acts of its employees. Such liability is possible even when the acts constitute a crime, as Avis Rent a Car recently found out. In early May, a judge in Gwinnett County found that Avis was liable for $38.5 million of a total of $54 million in damages awarded by two juries to two persons who were injured when an Avis employee stole a rental car and then ran into them. Even though the employee was engaged in criminal conduct when the accident occurred, Avis was held liable for the consequences of that conduct because it failed to properly check the background of the employee before he was hired.
If Avis had done so, it would have found the employee had been convicted of stealing cars and eluding the police. As the employee himself told one jury, “Just like you won’t have a sex offender watch kids”, you don’t hire a person who has been convicted of stealing cars to take care of cars. The legal concept underlying Avis’ liability is known as negligent hiring, and an employer can also be held liable for negligent supervision or retention of an employee.
If you ask a potential new employee for references, all the references provided should be checked. A criminal background check should be run, if the employee will have access to agency or customer funds or other property. Appropriate corrective action should be taken, if the employee does something or fails to do something that could have resulted in injury to a customer or other third party or their property. If it happens again, it may be time to consider ending the employment relationship.
The law in this area focuses on what a reasonable person in the position of the employer would have done under the same circumstances. That should be the guiding principle for agency owners in hiring and supervising their employees when injury to customers or other third parties is possible due to an employee’s act or failure to act.