Negligent Hiring and Supervision

Generally, employers can only be held liable for the bad acts of their employees if the employees are acting in the scope of their employment. However, under certain legal theories, an employer can be found liable for an employee's bad acts even though the employee was acting in a way that was not related to his employment if the bad act took place while the employee was working for the employer.

Negligent hiring is the failure to use reasonable care in hiring an employee who is unfit for the position for which he or she is hired and who subsequently causes harm to another while in that position. To be found liable for negligent supervision, an employer must have knowledge of the employee's unfitness, or should have known of the employee's unfitness. Accordingly, if an employer fails to conduct any investigation into the background and capabilities of the employee, it could be found that the employer should have known of the employee's unfitness. In the law, such knowledge is called constructive knowledge and in this context is a sufficient basis to assess liability against the employer.

A slight variation on negligent hiring is negligent retention, which is the failure of an employer to fire or reassign an employee after the employer becomes aware that the employee is unfit to hold the position for which he or she was hired.

The theory of negligent hiring has recently been extended to former employers of an employee that commits a wrong when the former employee recommends the employee to another employer. This variation on negligent hiring is called negligent referral. Liability might be imposed for negligent referral when an employer who knew that a particular employee was unfit to be hired for some reason referred the employee to another employer and the employee committed a harmful act while working for the new employer. Such liability might be more easily imposed if it was shown that the motivation of the first employer in making the referral was to get rid of a problem employee.

Even if it is not shown that an employee was unfit for the position for which he or she was hired, under certain circumstances, an employer might be held liable for negligent supervision if it is shown that the employee was not sufficiently skilled or trained to perform his or work without supervision.

Copyright 2009 LexisNexis, a division of Reed Elsevier Inc.