Eric Johnson

Steps Employers Should Take to Minimize Liability for Employees’ Conduct

In Minnesota, employers are generally responsible for the actions of their employees taken within the scope of employment.  Thus, employers have incentive to train employees on how to correctly perform their job duties, how to interact with customers and other employees, and other aspects of employment.  This article discusses how employers may be held liable for employees’ conduct and suggests steps employers may take to minimize potential liability. 

Minnesota recognizes the legal doctrine of respondeat superior, under which an employer may be liable for conduct by its employee that injures another’s person or property.  The threshold requirement for employer liability is that the employee’s injury-causing act must have occurred within the scope of his or her employment.  Whether an act occurs within the “scope of employment” depends on the nature of the act.  An employee’s negligent (i.e., unintentional) act may occur within the scope of employment if: (1) the employee was acting, to some degree, in furtherance of his or her employer’s interests; (2) the employee was authorized to perform the act; (3) the act occurred at a time and in a place in which the employee was authorized to perform his or her duties; and (4) the employer could have foreseen the employee’s conduct.  Examples of negligent employee conduct for which an employer may be liable may include a plumber’s failure to properly install piping which causes water damage or an employee’s negligent operation of a company vehicle while on the job which injures another’s person or property.

On the other hand, if the employee acts intentionally, the act may occur within the scope of employment if it: (1) was related or reasonably incidental to the employee’s job duties; (2) was foreseeable to the employer; and (3) occurred at a time and in a place in which the employee was authorized to perform his or her duties.  Furthering an employer’s interests is not required for liability based on an employee’s intentional act because intentional wrongful conduct rarely purposefully furthers an employer’s business interests.  Thus, the critical question regarding an employer’s liability for an employee’s intentional conduct is often whether the conduct was foreseeable—i.e., whether the employer should have known that the employee might commit the act.  Examples of intentional employee conduct for which an employer may be held liable may include sexual harassment of customers or other employees or posting personal information about customers or other employees on social media.

Absent clear signals (in which case an employer should intervene immediately), an employer typically will not know if or when an employee will commit an act that injures another’s person or property.  But, because no one is perfect, the employer can safely assume that some employee will probably do so at some point.  To minimize this likelihood, the employer should take steps to not only train its employees, but also to monitor performance and follow up with regular evaluations and refresher sessions.  Although an employer may not be able to reduce its liability when an employee actually injures another’s person or property when acting within the scope of employment, taking such steps should reduce the chance that an employee’s conduct will result in harm.

Specific means by which employers might reduce the likelihood that an employee’s conduct will harm another’s person or property include, but are not limited to:

  •  Develop uniform guidelines for performing job duties and a set of policies covering topics such as expectations for employees, workplace conduct, and customer interaction.
  • Create specific job titles or positions and written descriptions of the duties and expectations for employees holding each title or position.

  • Disseminate written guidelines, policies, and job descriptions to all employees (for example, in the form of an employee manual or handbook), and have each employee sign a form acknowledging receipt of such guidelines, policies, and job descriptions.

  • Take time to train new employees in practicing approved job performance methods.

  • Conduct regular interim training sessions to refresh employees’ knowledge or teach updated performance methods.  Holding a full-day retreat or workshop on a normal work day could be an option.

  • Maintain a staff training log that monitors which employees have received certain training and when employees are due for refreshers.

  • Intermittently observe employees on the job to ensure that performance of duties has not become careless.

  • Review performance guidelines and/or company policies with all employees after any incident or breach.

  • Ensure that managers follow disciplinary procedures.

  • Promote positive staff relationships and open communication without regard to employee status or rank.

Employers may believe that there simply is not enough time to devise and implement specific guidelines and policies, train employees, and conduct follow-up monitoring and refresher sessions.  But, employers should realize that these steps are investments against spending even more time and money defending lawsuits arising from employee negligence or other bad conduct.  It may be helpful for employers, in developing job performance guidelines or employee policies, to consult with an attorney who is knowledgeable in employment law.  Such attorneys often represent employers in a variety of industries and are able to tailor their services to the specific needs of each employer.

In summary, part of being an employer in Minnesota is assuming legal responsibility for the conduct of employees committed within the scope of employment, whether such conduct is intentional or negligent.  Another part is the likelihood that someday some employee will commit an act that injures another’s person or property.  Employers can work to minimize this likelihood by, among other things, developing job performance guidelines and policies, training employees for uniform compliance with such guidelines and policies, monitoring performance, taking time to refresh knowledge or update training as necessary, and promoting a positive and open work environment.  Although taking these steps may require the dedication of resources, the result should be a net gain in the form of safer and more productive employees, happier customers, and, ultimately, more profitable employers.

By: Eric Johnson

Published in Business North, August 2013