Job-Related Accidents or Misconduct

Under a legal doctrine sometimes referred to as "respondeat superior" (Latin for "Let the superior answer"), an employer is legally responsible for the actions of its employees. However, this rule only applies if the employee is acting within the course and scope of employment. In other words, the employer will generally be liable if the employee was doing his or her job, carrying out company business, or otherwise acting on the employer's behalf when the incident took place.

But if the employee acted independently or purely out of personal motives, the employer might not be liable. Here are a few examples to illustrate the difference:

• A restaurant promises delivery in 30 minutes "or your next order is free." If a delivery person hits a pedestrian while driving frantically to beat the deadline, the company will probably be legally responsible for the pedestrian's injuries.
  
  
• A technology services company gives its sales staff company cars to make sales calls. After work hours, a sales person hits a pedestrian while using the company car to do personal errands. Most likely, the company will not be held responsible for the incident.
  
  
• A law firm issues cell phones to all of its lawyers, to allow them to call into the office and check in with clients when they are on the road. A lawyer, driving, hits a pedestrian because she is completely engrossed in her telephone conversation with a senior partner in the firm. The law firm will probably have to pony up for the pedestrian's injuries.
  
  
• A medical billing company hires a fumigator, who sprays the company's office with powerful pesticides. The next day, a dozen employees fall ill from the fumes. One of the affected employees is sent home; on her way, she suffers a dizzy spell and hits a pedestrian. The company is probably on the hook.

Careless Hiring and Retention

Under a different legal theory, someone who is injured by your employee can sue you for failing to take reasonable care in hiring your workers ("negligent hiring") or in keeping them on after learning the worker poses a potential danger ("negligent retention"). This rule applies even to what your workers do outside the scope of employment -- in fact, it is often used to hold an employer responsible for a worker's violent criminal acts while working, such as rape, murder, or robbery.

Here are a few situations in which employers have had to pay up:

• A pizza company hired a delivery driver without looking into his criminal past -- which included a sexual assault conviction and an arrest for stalking a women he met while delivering pizza for another company. After he raped a customer, the pizza franchise was liable to his victim for negligent hiring.
  
  
• A car rental company hired a man who later raped a coworker. Had the company verified his resume claims, it would have discovered that he was in prison for robbery during the years he claimed to be in high school and college. The company was liable to the coworker.
  
  
• A furniture company hired a delivery man without requiring him to fill out an application or performing a background check. The employee assaulted a female customer in her home with a knife. The company was liable to the customer for negligent hiring.