SW Legal studies in Business

Negligent Hiring and Negligent Retention of Employee Basis for Employer Liability
Description

California appeals court held that tort liability based on negligent hiring and retention is a cause of action distinct from vicarious liability based on respondeat superior. The employer may face greater liability than would be the case based on vicarious liability alone.

Topic

Agency

Key Words

Vicarious Liability; Respondeat Superior; Negligent Hiring

C A S E   S U M M A R Y
Facts

Carcamo was driving a truck for his employer, Sugar Transport. When Tagliaferri tried to pass Carcamo, the rear of her car hit Carcamo's front tire, causing Tagliaferri to lose control. Her car when over the median and landed on top of Diaz's car that was coming in the opposite direction. The jury awarded Diaz $22.5 million in damages; apportioned 45% of fault to Tagliaferri, 20% to Carcamo, and 35% to Sugar Transport. Sugar Transport was held vicariously liable for its negligent hiring and retention of Carcamo. Sugar Transport appealed, contending that while it is vicariously liable for Carcamo's driving on a theory of respondeat superior, there should have been no claim for negligent hiring and retention.

Decision

Affirmed. Negligent hiring and retention are theories of liability independent of vicarious liability. That is, the liability comes from hiring and retaining an employee who is incompetent or unfit. Not only is the employer responsible on the theory of vicarious liability for the accident caused by an employee, but because the employer had reason to believe that an undue risk of harm would exist because of the employment. Hence evidence about Carcamo's employment and driving history, which involved previous accidents, was relevant. It showed that Sugar Transport disregarded Carcamo's past record and the unreasonable danger to others exposed by his driving. Hence, the jury properly considered that evidence when apportioning fault for the accident.

Citation

Diaz v. Carcamo, ---Cal.Rptr.3d--- (2010 WL 654346, Ct. App., Calif., 2010)

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