Under the doctrine of respondeat superior, an employer can be held vicariously liable for the acts of its employee, including negligent, willful, malicious or even criminal acts, when such acts are committed in the course of employment and in furtherance of the business of the employer. Several recent cases provide guidance to employers in determining when they can be held liable for an employee’s conduct.
In Davila v. Yellow Cab Company, the plaintiff, Herman Davila (“Davila”), alleged he was struck and injured by a taxicab owned by the defendant, Yellow Cab Company (“Yellow Cab”), and operated by Thomas Williams (“Williams”). Yellow Cab argued that it was not liable for Williams’ negligence since Williams was not its employee but instead an independent contractor. Thus, Yellow Cab had no control over Williams’ operation of the cab. The evidence, however, established that Williams was prohibited from changing the appearance of the cab; was the only authorized driver of the cab; was instructed to issue receipts bearing the Yellow Cab name; and was required to accept Yellow Cab coupons and charges to Yellow Cab’s corporate and individual charge accounts. Based on the extensive control Yellow Cab exerted over Williams’ operation of the cab, the court found that Yellow Cab was liable for Williams’ actions.
In Gianforte v. Elgin Riverboat Resort, the plaintiff, Patrick Gianforte (“Gianforte”), a former employee of the defendant, Elgin Riverboat Resort (the “Casino”), filed suit against the Casino based on allegedly slanderous statements by fellow employees that Gianforte had been fired for rigging a drawing. Gianforte alleged the Casino was liable for the statements under the doctrine of respondeat superior. The court held the Casino was not liable for the statements because the employees who made the statements were non-management personnel and the statements were not related to the acts the employees were required to perform. Because the Casino had a policy that prohibited discussion of an employee’s termination, the employees’ conduct was beyond the scope of their employment. Thus, the Casino was found not to be liable for the employees’ statements.
In Lestos v. Century 21-New West Realty, a property owner filed suit against his former broker and the broker’s firm, alleging the broker had breached his fiduciary duties to the property owner by failing to disclose a third-party offer for a price in excess of what the seller had agreed to pay for the property. The court noted that under the doctrine of respondeat superior, an employer is liable for the deceit of his employee if the deceit is committed in the very business the employee was appointed to carry out, even if the employee’s conduct occurred without the knowledge of the employer. Thus, the court held that the broker’s firm could also be held liable for the broker’s fraud.
These cases demonstrate the various factors courts consider when determining whether an employer is liable for the actions of its employee. If you have any questions regarding whether an employer is liable for particular actions of its employees, please contact a member of our firm.