Most employers know that they can be held liable in some situations based on negligent hiring or retention of an employee who harms a third party. A new decision from the Seventh Circuit Court of Appeals cautions employers that these obligations can extend to off-duty conduct by the employee that has some connection to their workplace responsibilities.
In Anicich v. Home Depot U.S.A., Inc., the plaintiff was the estate of a Home Depot employee murdered by her supervisor in a hotel room while attending an out-of-town wedding. The plaintiff alleged that the supervisor had engaged in violent and sexually harassing workplace behavior for years. Regardless of this fact, the estate claimed that Home Depot retained the supervisor, even when he failed to complete a mandated anger management class. The estate said that the supervisor coerced the deceased employee to attend the wedding with him by threatening to fire her otherwise. It sued alleging negligent supervision and retention by the employer.
Home Depot contended that it could not be held legally responsible for off-duty criminal acts of an employee. The Seventh Circuit disagreed, remanding the matter for further proceedings. Interpreting Illinois law, the court noted that employers have a duty under law to investigate and discipline employees under federal anti-harassment and employment discrimination laws. Although Home Depot is not directly responsible for its supervisor’s criminal acts, it must follow a reasonable standard of care in selecting and retaining employees.
The complaint alleged that the employer knew of the supervisor’s harassing behavior and refused to take decisive action. By claiming that the supervisor used his work authority to threaten the deceased employee’s job if she did not accompany him to the off-duty event, the plaintiffs stated a plausible claim for relief under Illinois law.
Even though this case contains extreme examples of employee conduct, it reflects a trend of courts holding employers liable for actions committed by employees whom they know are engaging in harassing or violent behavior. When employers consider alternatives for disciplinary action against employees found to have engaged in such behavior, they should take into account the potential liabilities associated with continuing that person’s employment. In some sense, by giving the offending employee a second chance, they may become a virtual insurer for that employee’s behavior going forward.