What Defendants Need to Know About Vicarious Liability

It is a well-settled principle of personal injury law that damages may only be assessed against the party who was actually responsible for the harm caused. However, like almost all legal rules, there are exceptions even to this rule. Consider a scenario in which a driver for a delivery company negligently caused an accident that resulted in injury to the plaintiff. Could the driver’s employer be held liable for the actions of its employee? The answer, at least in some cases, is “yes” due to the vicarious liability doctrine. Companies facing lawsuits for the actions of their employees should speak to a North Carolina personal injury defense attorney to minimize the risks of vicarious liability. 

What It Is

Vicarious liability (also referred to as “imputed liability”) is based on the legal doctrine of respondeat superior, which holds that a principal is responsible for the acts of his or her agent if such acts occur within the scope of the principal-agent relationship. While the principal-agent relationship can encompass a wide range of relationships, the doctrine most often arises in the context of the employer-employee relationship. It also arises in the context of parent-child relationships in certain cases. 

Under North Carolina law, a principal is liable for its agent’s wrongful acts when the agent’s act: 

1. Is expressly authorized by the principal; and
2. Is committed within the scope of the agent’s employment and in furtherance of the principal’s business; OR
3. Is ratified by the principal

One of the most famous examples of vicarious liability being imposed on an employer for the acts of its employee was the Exxon Valdez oil spill in 1989, in which an oil tanker ran aground in Alaska, spilling nearly 11 million gallons of crude oil. During discovery, it was established that Exxon had given control of the vessel to a captain who it knew was an alcoholic and had previously taken command of a vessel in violation of Exxon’s alcohol policies. Accordingly, the court found that Exxon could be vicariously liable for damages because the captain was a managerial employee acting within the scope of his employment. 

Types of Cases in Which Vicarious Liability Commonly Arises  

Vicarious liability can arise in a wide variety of cases. Some of the most common include: 

• Torts: Plaintiffs in tort cases, especially personal injury cases, typically are targeting “deep-pocketed” defendants, making this area of law particularly fertile ground for vicarious liability theories. For example, the owner of a restaurant may be vicariously liable for a waiter who negligently spills scalding water on a customer. 
• Medical malpractice: Doctors typically oversee a team of other healthcare professionals, such as nurses and various technicians. If a member of that doctor’s team fails to meet the standard of care for the practice, the doctor may be liable for their actions. 
• Employment discrimination and harassment: Workplace-related discrimination and harassment are, by definition, committed by employees. If an employer fails to take steps to prevent such discrimination and harassment or otherwise ratifies it, the employer may be vicariously liable. 

If you’d like to discuss steps to minimize your risk of vicarious liability, please speak to a North Carolina personal injury defense attorney. 

Exceptions to Vicarious Liability 

Intentional Torts

The doctrine of respondeat superior generally applies only to negligence. Intentional torts — such as assault, battery, and intentional infliction of emotional distress — are beyond its reach, absent a showing that the employer directed the employee to engage in the intentional tort or otherwise ratified it. 

Actions Committed Outside the Scope of Employment 

Principals generally are not liable for their agents’ wrongful actions that are outside the scope of their employment. However, the “scope” of an agent’s employment is not always clear and is frequently subject to debate. To determine whether an agent’s act was within the scope of his or her employment, courts may consider the following factors: 

• Whether the act was committed within the course of activities the agent was authorized to perform
• Whether the act was committed as part of the tasks the principal had given the agent the authority to perform 
• Whether the principal had selected and employed the agent to perform the act 

For more information about determining whether an employee’s actions were within the scope of their employment, please contact a North Carolina personal injury defense attorney.  

Actions of Third Parties

Employers and other principals generally cannot be held vicariously liable for the actions of third parties, as the doctrine of respondeat superior requires the existence of a principal-agent relationship.

Actions of Independent Contractors

As we’ve established, a principal-agent relationship must exist for a court to find a principal vicariously liable for the actions of an agent. As such, one who hires an independent contractor generally cannot be held liable for the negligent acts of the contractor. To determine whether an employer-employee relationship sufficient to establish vicarious liability exists, courts consider whether the person hired: 

• Is engaged in an independent business
• Has the independent use of special skill, knowledge, or training in the execution of the work
• Is doing a specified piece of work at a fixed price, for a lump sum, or on a quantitative basis
• Is not subject to discharge because he adopts one method of doing the work over another
• Is not in the regular employee of the contracting party
• Is free to use such assistants as he thinks proper
• Has full control over his assistants
• Selects his own time

In essence, a worker who is responsible only for the result of the work rather than the manner in which it is performed is considered an independent contractor, and this is an insufficient basis to establish vicarious liability on the part of the contracting party. 

Minimize Your Risk of Being Held Vicariously Liable for the Acts of an Employee With Help From a North Carolina Personal Injury Defense Attorney 

Liability for the actions of employees is one of the biggest risks most companies face, but there are several strategies available to employers for minimizing that risk. To learn more, please contact a North Carolina personal injury defense attorney at Harris, Creech, Ward & Blackerby by calling 252-638-6666 or using our online contact form.