Holding Supervisors Responsible for Wrongful Acts of an Employee
Holding Supervisors Responsible for the Wrongful Acts (Torts) of an Employee
The theory of respondeat superior (employer liable for wrongful acts of employee) is a familiar doctrine to many business owners (and their lawyers). Simply stated, an employer is vicariously liable for the torts (or wrongful acts) of its employees committed within the scope of employment. (Lisa M. v. Henry Mayo Newhall Memorial Hosp., (1995) 12 Cal.4th 291, 296-97.) Some business owners (and their lawyers) are also aware that an employee’s willful, malicious and even criminal torts committed within the scope of his or her employment may fall within respondeat superior even though the employer has not authorized the employee to commit crimes or intentional torts. (Id.)
In lawsuits, respondeat superior may be enough to hold an employer liable for the torts of its employee committed within the scope of employment. However, what about the employee making the hiring or supervisory decisions? When can a supervisory employee (or agent) of an employer be personally responsible for the torts of an employee when aware of their propensities? An experienced Irvine employment lawyer can help you assess the factually intensive issues involved in this situation.
The Agency Immunity Rule
The general rule is that an agent traditionally escapes personal liability for the decisions they make on behalf of their employer. Such agent, or supervisor, avoids liability based on the “agency immunity rule.” This rule is codified in Civil Code § 2351: “a sub-agent, lawfully appointed, represents the principal in like manner with the original agent; and the original agent is not responsible to third persons for the acts of the sub-agent.” (Civ. Code § 2351.)
In other words, an agent is not liable for the tortious acts of an employee when the agent is acting in an official capacity on behalf of the principal. (Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 1329.) Thus, employees who are managers, supervisors, or corporate executives alleged to have been acting within their scope of their employer are generally immune from personal liability when acting within the scope of their corporate representation. (Id.)
Though this general rule still stands, substantive exceptions do exist to hold supervisory authority liable for the torts of their employees. The first such exception arises when the supervisory authority is acting negligently in the hiring and/or appointment of an employee. (Baisely v. Henry (1921) 55 Cal.App. 760, 763-764.) This negligence would subject a supervisor to personal liability for their actions. Secondly, under Civil Code § 2343, agents may be found liable for their own wrongful actions, even if taken within the scope of their agency relationship. This situation commonly arises when a supervisor has some connection, involvement, or knowledge of the wrongful acts of the employee. Finally, the authority of a supervisor may be so expansive, that their actions align more similarly with that of a principal, thus subjecting them to liability.
Personal Liability Based on Negligent Hiring/Appointment
The agency immunity rule generally immunizes supervisors for actions of their sub-agents, if lawfully appointed. (Civ. Code § 2351.) However, a supervisor may be held liable for the misfeasance or malfeasance of a subagent employed by him in the service of his principal if they are “guilty of negligence in the appointment of such sub-agent.” (Hilton v. Oliver (1928) 204 Cal. 535, 539.) Such negligence could certainly include a decision to hire a prospective employee despite knowledge of tortious conduct by an employee.
In such a scenario, respondeat superior and the agency immunity rule do not govern the actions of the hiring supervisor. Rather, the negligent hiring done by the supervisor goes beyond the scope of the agency relationship, and, as such, beyond the scope of any immunity that they would have as an agent of the employer. With such immunity no longer applicable, plaintiff’s counsel can establish a negligence claim showing a supervisor’s knowledge of an employee’s propensity for committing the torts at issue, failure to follow established procedures, failure to perform background checks, and more. This scenario may be a viable exception especially when evidence exists showing specific instances of negligence on the part of the supervisor, such as when a hiring supervisor has specific knowledge of the propensities of the employee to commit tortious conduct.
Personal Liability Based on Wrongful Actions
A supervisory acting within the scope of authority delegated them by the employer may still be liable for their own wrongful actions. Under Civil Code § 2343, a supervisory may be liable for the torts of an employee within their scope of authority, rather than in an individual capacity. (Hilton, supra, 204 Cal. at 539.) If a supervisor directs or authorizes the particular wrongful act of the subagent, or improperly cooperates in the subagent’s acts or omissions, then he may be liable for his wrongful conduct. (Id.) If a tortious act has been committed by an agent acting under the authority of his principal, the fact that the principal is liable “does not of course exonerate the agent from liability.” (Perkins v. Blauth (1912) 163 Cal. 782, 787.) Thus, a supervisor that has prior knowledge of certain propensities of an employee who authorizes, ratifies, or cooperates in such conduct may be personally liable for his own wrongful actions.
Expansive Authority May Give Rise to Treatment as Principal
In Malloy v. Fong (1951) 37 Cal.2d 356, the Supreme Court held as a matter of law that a minister was not liable for the acts of his assistant, because both were subagents of their church. The court reasoned that respondeat superior is not applicable to the relationship between a supervisor and subordinate, because the supervisor is “a wage-earner and does not occupy an economic and legal position similar to an employer.” (Id.)
However, the court in Stevens v. Roman Catholic Bishop of Fresno (1975) 49 Cal.App.3d 877 distinguished such immunity. In Stevens, the supervisor (a bishop occupied a great position of authority. As the head of the Diocese of Fresno, this particular bishop may closer be analogized to that of the church, rather than a mere “wage earner.” (Id. at 888.) An argument can be made that a supervisor with expansive authority over the hiring, firing and management of its employee could be held liable for the tortious conduct of its employees if the supervisor had prior knowledge of the propensities of its employees to commit such conduct.
Holding supervisors personally responsible for the tortious conduct of their employees is not a simple proposition. A supervisor is generally immune from personal liability in such a case. However, if a supervisor had prior knowledge of the propensities of an employee, they may be subject to personal liability if they (1) negligently hire the individual, (2) authorize or cooperate in the wrongful conduct, or (3) have such expansive authority that their actions are analogized best to that of a principal.