Michael Scott: It was on company property, with company property. So double jeopardy, we’re fine.

When are you responsible for the acts of your employees? This is one of the fundamental questions of employment law, and a recent case from the Court of Appeals of Georgia outlines some of the common legal theories under which an employer can be held liable for the acts of its employees. In Dougherty Equipment Company v. Roper, Dougherty, a forklift dealer, employed Adam Garland as an “on call” service technician. At the time he was hired, Garland’s driver’s license was suspended due to two prior DUI convictions, so Dougherty refused to allow him to drive a company vehicle or Garland’s own vehicle for any company purpose. Later, however, Garland’s license was restored, and Dougherty assigned him a company van, and allowed Garland to take the company van home. While he was driving from home to the company office to receive his assignments for the day, Garland failed to yield to oncoming traffic and caused an automobile accident with Linda Roper. Roper sued Dougherty, claiming the employer was liable for the actions based upon three theories: respondeat superior, negligent hiring/retention and negligent entrustment.

In Georgia, as in practically every other state, an employer is liable for its employees’ acts so long as the employee was acting within the scope of his employment. This concept of vicarious liability is called respondeat superior. In most litigation addressing respondeat superior claim issues, the key question is whether the activity was “within the scope of employment.” Because respondeat superior frequently comes up in the driving context, the Georgia courts have created special presumptions to address whether or not an employee’s driving was within the scope of employment. If the employee was driving the employer’s vehicle, “a presumption arises that the employee was acting in the course and scope of his employment at the time of the collision.” In the Dougherty case, the court held that, even though the presumption applied, because Garland was driving to work when the accident occurred, he was not yet acting “in the scope of employment.” This holding is consistent with numerous other cases finding that commuting is not within the scope of employment.

Roper also argued that Dougherty was liable based upon a theory of negligent hiring and retention. Intentional torts, such as assault, are typically outside the scope of employment. As a result, the employer is not vicariously liable for these actions under the doctrine of respondeat superior. However, the employer may be directly liable for its own negligence in hiring and/or retaining an employee if the employer knew or had reason to know that the employee had a propensity to engage in the type of conduct that resulted in the injury. The key element for the tort of negligent hiring is forseeability – could the employer reasonable foresee that the employee would engage in the conduct at issue. Georgia has joined other states in crafting limitations on the tort of negligent hiring, in part to ensure that employers are not unduly dissuaded from taking a chance on a potential employee with a checkered past. Thus, pursuant to a recently enacted statute, if an ex-offender is issued a “Program and Treatment Completion Certificate” by the Georgia Department of Corrections or is pardoned, an employer will be presumed to have exercised due care in hiring the ex-offender. Furthermore, Georgia courts have fashioned judicial limitations on the tort, holding that negligent hiring will only apply if the conduct at issue occurred within the scope of employment or against a person who had a special relationship with the employer’s business (e.g. a co-employee). Thus, Dougherty was not liable due to the fact that Garland was acting outside the scope of employment. Furthermore, no allegation was made that Roper had any special relationship with Dougherty.

Because the accident with Roper occurred while Garland was acting outside the scope of employment, Dougherty was not liable based upon the theories of respondeat superior or negligent hiring/retention. However, there is one further theory that Dougherty was unable to escape by means of a pre-trial motion. Georgia recognizes a theory of negligent entrustment in which a vehicle owner (not necessarily an employer) can be held directly liable for lending his vehicle to another person if the owner had actual knowledge that the “driver is incompetent or habitually reckless” and the driver then negligently drives the vehicle resulting in injury to another. Of particular note, this tort does not require that the injury occur within the scope of employment. Thus, because there existed evidence that Dougherty had actual knowledge that Garland habitually drove his vehicle in a reckless manner, Dougherty was not entitled to summary judgment as a matter of law, and the claim could proceed to trial.

So what is an employer to do? First, consider what type of information you should gather as part of the hiring process, including criminal history, driving history, employment history and education. Second, don’t create a blanket policy of not hiring potential employees with a criminal record (this can lead to employment discrimination claims and EEOC investigations); rather, consider the nature of the offense, the time that has lapsed since the conviction, and the nature of the job. In the Dougherty case, it wasn’t the decision to hire Garland that was problematic – it was the decision to let him drive a company vehicle even though Garland had multiple DUI convictions. If you do decide to not hire a recruit based upon his or her criminal history, be prepared to explain why the nature of the offense justified the decision not to hire. Finally, consider hiring a reputable (and law abiding) agency to conduct your background checks.

The Dougherty opinion can be viewed here.

See here for an article from Forbes outlining the 10 do’s and don’ts of hiring.

Also, to learn more about EEOC investigations for refusing to hire convicted felons, read this.