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North Carolina Court Says Employer Not Liable for Manager's Sexual Assault of Vendor

    Client Alerts
  • June 14, 2013

Under established personal injury law, employers are generally not liable for intentional torts engaged in by their employees. This stands as an exception to the usual vicarious liability principle, because the intentional harm is not within the course and scope of the employee's job. Last month in an unpublished decision, the North Carolina Court of Appeals applied these concepts to claims that an employer was liable for a sexual assault of a janitorial service's employee by one of its managers.

In Watts v. Bell, the service's employee filed a police report alleging that she had been repeatedly touched by the manager while cleaning the office after working hours. The police obtained a recording of such an assault and arrested the manager for battery. The employer investigated the matter, but did not terminate the manager until he was convicted of the crime six months later. The victim sued the employer, alleging that it was vicariously liable for its manager's actions and that it had ratified the acts by leaving him in place for an extended period of time following his arrest.

The Court of Appeals affirmed summary judgment for the employer. It rejected the plaintiff's contention that the manager's behavior was within the course and scope of his employment because he had the authority to control and direct the cleaning services. Even if the wrongdoer was performing functions of his job at the time of the assault, his actions were not in furtherance of any business purpose.

The court also rejected the plaintiff's contention that the failure of the employer to immediately terminate the manager ratified his conduct. The Court of Appeals noted that the employer carefully investigated the circumstances, including performing a criminal background check on the manager, and interviewing co-workers to determine if he had engaged in any witnessed inappropriate behavior. Until the criminal trial, the employer did not have access to the specific evidence used to convict the manager. Retention alone is not enough to demonstrate ratification. Otherwise, North Carolina employers would need to terminate any employee accused of criminal activity prior to determination of guilt.

Employers that retain employees accused of crimes should carefully document their investigation and the reasons why they conclude that adequate safeguards are in place pending resolution of the criminal process.