Michigan

Michigan Businesses Can Be Vicariously Liable for the Actions of Their Employees

Many businesses owners do not realize that their companies can be held vicariously liable for the torts of an employee who acts within the scope of his or her employment. (A tort is a civil wrong that causes injury to a person, property or economic interests or relationships.) An employer can be liable even if the company had no knowledge of the employee's actions and even if the employer actually directed the employee not to commit the wrongful act.

The legal doctrine that makes this possible is called "respondeat superior." This phrase is Latin for "let the master answer." The key question for determining possible employer liability is whether the employee's wrongful action is within the scope of his or her employment. Of course, this includes actions that the employee is hired to do. But, under certain circumstances, it can also include actions that are reasonably related to the employee's job, even if those actions are not necessarily the precise activities included in an employee's job description.

Basically, an employee's actions could possibly be considered within the scope of his or her employment if:

1. They are of the same kind that he or she was hired to perform;

2. They are performed within the time and space the employer normally authorizes; and

3. They further the purpose of the employer.

It is important to remember that an employer is not vicariously liable for torts that an employee may commit if that employee was acting solely for his or her benefit when the tort was committed.

Any company that is faced with possible vicarious liability for the actions of one of its employees should consult with legal counsel to fully understand its rights and responsibilities.

Full post as published by Michigan Business Lawyer Blog on September 03, 2008 (boomark / email).