Negligent retention of employees: an expanding doctrine.

• Author: Lienhard, Rosanne

IN RECENT years, negligent hiring and retention cases have seen dramatic growth. Cases have involved employees who commit criminal. violent or other wrongful and intentional torts. Negligent hiring occurs when an employer places an unfit person in an employment situation that entails an unreasonable risk of harm to others. Negligent retention is closely related to negligent hiring, but these actions allege negligence after an employee is hired rather than at the time of hire.(1)

The tort of negligent retention, which was recognized first by the Florida Supreme Court in 1954, requires that the employer become aware or should have been aware of problems with an employee that indicated that employee's unfitness, and that the employer failed to take further action, such as investigating, discharge or reassignment.(2)

BACKGROUND

The traditional basis for an employer's liability for its employees' acts was the doctrine of respondeat superior, under which the employee had to be acting within the scope of employment or in furtherance of the employer's interest for the employer to be responsible.(3) Under respondeat superior, the employer "stands in the shoes" of its employees. The justification for this vicarious liability is the employer's control over its employees and the benefit the employer receives from its employees.

But courts have not used respondeat superior as a basis for expanding an employer's liability for negligently hiring or retention. Instead, the tort developed from the fellow servant rule, which imposes a duty on employers to select employees who will not endanger fellow employees by their presence on the job.(4)

At common law, the fellow servant rule required an employer to provide its employees with a safe place to work.(5) For example, in an 1885 case, an intoxicated train engineer accidentally backed a train over another employee and killed him. The court held that an employer may be liable for negligently retaining an incompetent employee if the employer fails to discover and correct the employee's vicious habits.(6) In other early cases, the courts held that fellow servants could recover if they could prove that the employer had been guilty of negligence either in selecting or retaining the employee.

The first cases involved actions by the employees that were within the scope of their employment, but later courts began developing new tests that broadened grounds for an action. One of the first cases to discuss a more modern view was Ballard's Administratrix v. Louisville & Nashville Railroad, and the discussion came in a dissent.(7) While the majority adhered to the respondeat superior approach and refused to hold the employer liable for an employee's prank that was outside the scope of employment, Justice Nunn in dissent stated that the employer knew its employee was reckless and dangerous but nevertheless kept him in its employ, therefore the fellow employee had a valid cause of action, although the employee's actions were not within the scope of his employment.

This modern view stresses the duty both to hire and to retain competent employees. For example, the direct employer liability doctrine expanded to include a duty to "exercise reasonable care for the safety of members of the general public."'3 This view is recognized by a majority of jurisdictions. Section 213 of the Restatement (Second) of Agency states that a "person conducting an activity through servants or other agents is subject to liability for harm resulting from his conduct if he is negligent or reckless . . . in the employment of improper persons or instrumentalities in work involving risk of harm to others."

Today the main issues in negligent employment cases involve several considerations: (1) the level of care the employer must exercise in making personnel decisions; (2) the persons to whom the duty is owed; (3) the employee characteristic that amounts to incompetence or unfitness, and the evidence that may be used to establish the existence of this trait; (4) the necessary connection between the employee's alleged incompetence or unfitness and the plaintiff's injury; and (5) the nexus between the employer and the plaintiff.(9)

Garcia v. Duffy(10) offers one of the most in-depth discussions of the modern negligent retention claim. The Florida Court of Appeal noted two questions that must be answered:

* To whom does an employer owe a duty to exercise care in hiring and retaining employees?

* How is that duty breached?

From these two questions the court next developed three elements necessary for establishing either a negligent hiring or retention claim, stating that the plaintiff must: (1) establish that the employer owed a legal duty to the plaintiff, with the plaintiff being "within the zone of foreseeable risks created by the employment"; (2) show that the employee was unfit for the position held; and (3) show that the employer breached his or her duty to the public by using an inadequate standard of care in choosing or retaining the unfit employee. "In general," the court stated, "the proper test is whether the employer exercised the level of care which, under all the circumstances, a reasonably prudent man would exercise in choosing or retaining an employee for the particular duties to be performed."(11)

The most important test is that which has been stated as, "an employer may be directly liable for negligent hiring or negligent retention of an employee where the employer knew or should have known of the employee's dangerous proclivities, and the employer's negligence was the proximate cause of plaintiff's injury."(12) It also is important to note that an employer may be held liable in negligent retention even though it is not responsible for the wrongful acts of the employee under the doctrine of respondeat superior.(13)

NEGLIGENT RETENTION IN SEXUAL HARASSMENT AND ASSAULT

1. Sexual Harassment

   One of the most active areas of negligent retention law is sexual harassment suits. Usually the harasser is a peer or co-worker of the per son harassed. If the employer has had no notice of the harasser's proclivities, then there is a good chance the employer will not be liable, but if the employer has such knowledge, the employer is open to liability.(14)

   A leading case in sexual harassment suits is Harrison v. Edison Bros. Apparel Stores Inc., is in which a former employee, alleging that she had been harassed by her supervisor, sued in state court, asserting claims for battery and intentional infliction of emotional distress, as well as for negligent retention and wrongful discharge. The court held the employer not liable...