Presented:
2005 TEXAS EMPLOYMENT RELATIONS SYMPOSIUM
TEXAS ASSOCIATION OF BUSINESS AND
THE SOCIETY FOR HUMAN RESOURCE MANAGEMENT TEXAS STATE COUNCIL
July 28, 2005
San Antonio, Texas
PROTECTING YOURSELF FROM ROGUES AND
RASCALS IN YOUR EMPLOY -WHEN VICE-PRINCIPALS, EMPLOYEES, AGENTS AND
SUPERVISORS GO ASTRAY
Kevin M. Sadler
Kevin M. Sadler
Soña Ramirez
Baker Botts LLP
Austin, Texas
kevin.sadler@bakerbotts.com
sona.ramirez@bakerbotts.com
512.322.2500
I. Introduction
Employers usually are not liable for the intentional or negligent misconduct of their
employees. But when an employer’s vice-principals, employees, agents, and supervisors go astray, the
employer can be held liable for their actions under several theories, including respondent superior, viceprincipal liability and negligent hiring, training, supervision, and retention. In addition, the employer may
be held strictly liable in cases where supervisors engage in employment discrimination that results in a
“tangible job detriment” to an employee. Plaintiffs in search of a “deep pocket” increasingly resort to such
theories, presenting employers with potential exposure to significant liability.
Recently, in Loram Maintenance of Way, Inc. v. Ianni, the El Paso Court of Appeals upheld a
jury verdict that imposed liability on the employer when its employee shot and severely injured a police
officer while the employee was off-duty and away from his job site. The jury awarded the plaintiff police
officer $1.3 million in actual and punitive damages for his injuries. Although Loram represents an extreme
case of imposing liability on an employer for the intentional acts of its employees, it serves as a wake up call
for all companies to re-examine how employers hire, supervise, retain, and train their employees. The
purpose of this paper is to inform employers about their potential liability under these various theories and to
present practical tips for employers to protect themselves from such litigation.
II. Vicarious Liability/Respondeat Superior
Under the doctrine of respondeat superior, an employer may be held vicariously liable for the
intentional or negligent acts of an employee if the act is (1) within the scope of the actual or apparent general
authority of the employee, (2) in furtherance of the employer’s business, and (3) for the accomplishment of
the object for which the employee was employed. See Baptist Mem’l Hosp. Sys. v. Sampson, 969 S.W.2d
945, 947 (Tex. 1995) (an employer, as principal, may be held liable for tortious acts committed by its
employees as agents in the course and scope of their employment under the doctrine of respondeat superior);
Soto v. El Paso Natural Gas Co., 942 S.W.2d 671, 680 (Tex. App.—El Paso 1997, writ denied); Wal-Mart
Stores, Inc. v. Odem, 929 S.W.2d 513 (Tex. App.—San Antonio 1996, writ denied) (corporate liability for
an employee’s negligent torts is governed by the same rules as those that determine the liability of a
corporation for intentional torts). In other words, an employer is liable for its employee’s acts where they
fall within “the course and scope of his employment.” Leadon v. Kimbrouh Bros. Lumber Co., 484 S.W.2d
567 (Tex. 1972).
What is considered scope of employment?
To be within the scope of employment, “the conduct must be of the same general nature as
that authorized or incidental to the conduct authorized.” Kelly v. Stone, 898 S.W.2d 924, 927 (Tex. App.—
Eastland 1995, writ denied) (internal quotations and citations omitted); Durand v. Moore, 879 S.W.2d 196,
199 (Tex. App.—Houston [14th Dist.] 1994, no writ) (same); Soto, 942 S.W.2d at 680. The employer need
not have approved or authorized the employee’s specific action, as long as the employee acted within his or
her general authority and for the benefit of the employer. See, e.g., Soto, 942 S.W.2d at 680; Hooper v.
Pitney Bowes, Inc., 895 S.W.2d 773, 777 (Tex. App.--Texarkana 1995, writ denied); Love, 380 S.W.2d at
589. This is true even if an employee’s act was contrary to the express directions of the employer. See
Oberpriller, 170 S.W.2d at 610; Country Roads, Inc. v. Witt, 737 S.W.2d 362, 364 (Tex. App.—Houston
[14th Dist.] 1987, no writ).
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The court in Soto v. El Paso Natural Gas Co. discussed what actions are within the course
and scope of employment. 942 S.W.2d at 680. The case also serves a prime example to employers of what
not to do when faced with a rogue employee. In Soto, the plaintiff sued her employer, El Paso Natural Gas,
for sex discrimination based on sexual harassment, assault and intentional infliction of emotional distress
(“IIED”). Plaintiff worked as a secretary and was subjected to repeated harassment from a fellow employee,
“Tom”, who called her “lopsided” after she underwent a mastectomy, made repeated comments to her that
were sexual in nature, and at one point touched her breast while he yelled at her. Id. at 675. The plaintiff
reported most of the incidents to her supervisors, and supervisors witnessed several of the events. However,
the supervisors would either ignore her comments, tell her that “that’s Tom,” or tell her to ignore Tom and
walk away from him because he would not listen to anyone. Id. After she reported the inappropriate
touching to the Human Resources department, they conducted an investigation and concluded that Tom’s
conduct was abusive toward women and created a hostile work environment. Id. at 675-76. Despite
warnings to the contrary Tom nevertheless continued to harass the plaintiff and stated that he had set
“Human Resources straight.” Id. at 676. It was not until after Plaintiff filed suit that El Paso finally
disciplined Tom by demoting him and advising him to “fix his language.” Id.
The trial court granted summary judgment to the company. Plaintiff appealed. The court
noted that the incident centered around Tom becoming angry with plaintiff appellate berated her for not
typing some labels for him in a timely manner. Id. at 681. The court held that summary judgment was
precluded because the inappropriate touching occurred at work and during regular hours. The court
reasoned that typing was a regular part of plaintiff’s duties, and the incident arose out of Tom’s displeasure
with her work and not out of personal animosity towards her. Id. The court also rejected the company’s
argument that it had taken prompt remedial action once it was informed of Tom’s actions based on evidence
that management actively discouraged employees from complaining directly to human resources (i.e.,
without first going through management) and the company did not punish or correct Tom’s actions until
after plaintiff filed her EEOC charge. Id. at 680. In effect, the employer expanded Tom’s job duties to
include harassing the plaintiff by failing to take proper steps to stop his conduct.
In furtherance of the employee’s business
The employee must have committed the act or omission in furtherance of the employee’s
business and “for the accomplishment of the object for which the employee is employed.” Minyard Food
Stores, Inc. v. Goodman, 80 S.W.3d 573, 577 (Tex. 2002); Cosgrove v. Grimes, 774 S.W.2d 662, 666 (Tex.
1989); see PJC 7.6. Leadon v. Kimbrough Bros. Lumber Co., 484 S.W.2d 567, 569 (Tex. 1972); Robertson
Tank Lines, Inc. v. Van Cleave, 468 S.W.2d 354, 357 (Tex. 1971); (observing that “vicarious liability is
imposed only for authorized action in the furtherance of an employer’s business”). In large part, liability
will turn on the ability of the employer to control the employee. See, e.g., Baptist Memorial, 969 S.W.2d at
947. However, courts must consider whether the specific misconduct was in furtherance of company
business and part of the employee’s job. Minyard, 80 S.W.3d at 578-79 (holding it was reversible error
where “court of appeals only considered wrongdoer’s general authority as a store manager and [did] not
include an analysis of whether [his] defamatory remarks were in furtherance of Minyard’s business and for
the accomplishment of the object for which [he] was employed “).
Examples of No Vicarious Liability
Some examples of Texas courts finding no vicarious liability are Wrenn v. G.A.T.X. Logistics,
Inc., 73 S.W.3d 489, 495 (Tex. App.—Fort Worth 2002, no pet.) and Lyon v. Allsup’s Convenience Stores,
Inc., 997 S.W.2d 345, 348 (Tex. App.—Fort Worth 1999, no pet.).
In Wrenn, the plaintiff brought suit against his former employer after his supervisor assaulted
him, grabbed him by the throat, raised him from the ground and banged his head against a wall. 73 S.W.3d
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at 492. Wrenn alleged that the attack was the result of the supervisor’s longstanding pattern of discipline
that included physical violence, physical threats, cursing, and violent outbursts. Id. Wrenn’s claims against
the employer included vicarious liability under the doctrine of respondeat superior and a claim of negligent
hiring, supervision and retention. The appellate court upheld the trial court’s grant of summary judgment in
favor of the employer because it established that 1) the supervisor was not authorized to use physical force
against employees, 2) the assault arose out of the supervisor’s personal animosity towards Wrenn, and 3) the
“the assault was not committed in furtherance of [the employer’s] business.” Id. at 495. The court went on
to hold that there was a fact issue as to the negligent supervision claim and remanded that claim back to the
trial court. For a full discussion regarding this claim, see Part IV below.
In Lyon v. Allsup’s Convenience Stores, Inc., plaintiff was a store manager fired by her
supervisor for allegedly stealing company funds. In fact, the supervisor was the real thief. 997 S.W.2d 345,
346 (Tex. App.—Fort Worth 1999, no pet.). Plaintiff sued her employer, the estate of her supervisor who
had later committed suicide, and a fellow employee for defamation and intentional infliction of emotional
distress. Id. She did not bring an unlawful termination claim. The court granted summary judgment in
favor for the employer and severed that action from the remainder of the case. Id. at 347. On appeal,
plaintiff argued that the defamation and intentional infliction of emotional distress fell within the scope of
the supervisor’s authority. Id. The court found no fact issue as to vicarious liability because the employee’s
unlawful conduct “obviously was not done to accomplish any object for which [he or another employee] was
hired,” but rather to conceal his own unauthorized activities. Id. at 348.
Liability Precluded Where Employee Furthering Self-Interest
If an employee acts in furtherance of their own self-interest, this is outside the course and
scope of his employment and vicarious liability is precluded. Kelly, 898 S.W.2d at 927; Minyard, 80
S.W.3d at 577 (“[I]f an employee deviates from the performance of his duties for his own purposes, the
employer is not responsible . . . .”); see also Smith v. M Sys. Food Stores, Inc., 297 S.W.2d 112, 113-14
(Tex. 1957) (holding employer not liable because security guard’s assault was motivated by personal
resentment); Viking v. Circle K Convenience Stores, Inc., 742 S.W.2d 732, 734 (Tex. App.—Houston [1st
Dist.] 1987, writ denied) (holding no vicarious liability because employee’s assault was a personal concern);
Rosales v. Am. Business, Inc., 598 S.W. 2d 706 (Tex. App.—El Paso 1980, writ ref’d n.r.e.). Usually,
intentional torts, including assault, are not actionable under the theory of respondeat superior because they
“are not ordinarily within the scope of an employee’s authority,” but rather “the expression of personal
animosity” or personal gratification. Soto, 942 S.W.2d at 681.
For example, in Buck v. Blum d/b/a Houston Neurological Institute, plaintiff brought suit
against defendant after her doctor assaulted her during a neurological examination. 130 S.W.3d 285 (Tex.
App.—Houston [14th Dist.] 2004, no pet.). During the exam, the doctor asked her to place both hands
behind her back so that he could determine the strength of her hands, and then proceeded to place his penis
in her hand and asked her to squeeze. Id. The court of appeals upheld summary judgment in favor of the
defendant. Id. Plaintiff argued that the test he conducted was within the course and scope of his authority
and employment. Id. The court rejected this argument explaining that the doctor’s inappropriate test was in
the furtherance of his own prurient interest. Id. Therefore, the doctor’s inappropriate action was not in the
furtherance of the hospital’s business or the accomplishment of an object for which he was employer. Id.
Recoverable Damages
Under the doctrine of vicarious liability, a plaintiff is only entitled to recover actual damages.
Usually, employers are not vicariously liable for exemplary damages in connection with the employee’s
negligent act. However, an employer may be liable for exemplary damages in connection with a tort
committed by its manager if it was committed within the scope of employment. See Hammerly Oaks, Inc.,
958 S.W.2d at 391 (adopting Restatement of Torts § 909 that assesses punitive damages against a principal
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for the act of an agent “if, but only if, . . . the agent was employed in a managerial capacity and was acting in
the scope of employment.”); Fisher v. Carrousel Motor Hotel, Inc., 424 S.W.2d 627, 630 (Tex. 1967).
III. Vice-Principal Liability
Another theory that has become prevalent for plaintiff-employees is the theory of viceprincipal liability. Unlike the “course and scope of employment” test under the doctrine of respondeat
superior, vice-principal liability is not a theory of vicarious liability. Instead, the corporation is liable
because the actions taken by a vice-principal of a corporation are deemed to be the acts of the corporation
itself. See Fort Worth Elevators, 70 S.W.2d at 406; see also GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605,
618 (Tex. 1999); Frito-Lay, Inc. v. Ramos, 888 S.W.2d 887 (Tex. App.—El Paso 1989, no writ). Therefore,
an employee’s intentional or negligent act will be treated as the intentional act or negligence of the
employer.
For liability to be imposed on the corporation, the vice-principal’s acts or omissions must
bear a relation to, or be referable to, or further the employer’s business. McCorstin v. Mayfield , 274 S.W.2d
874, 877 (Tex. Civ. App.—Fort Worth 1955, writ dism’d by agr.); Rhodes, Inc. v. Duncan, 623 S.W.2d 741
(Tex. App.—Houston [1st Dist.] 1981, no writ). In addition, an employer may be found liable for the
negligent acts of its vice-principal even though the vice-principal’s acts were contrary to the express
instructions of his employer. See McCorstin, 274 S.W.2d at 877.
So who are vice-principals?
An employee is a vice-principal if he or she fits at least one of the following categories: (1)
corporate officers (one who represents the corporation in its corporate capacity); (2) those who have
authority to hire, fire, and direct employees; (3) those engaged in the performance of non-delegable or
absolute duties of the employer; or (4) those to whom an employer has confided the management of the
whole or a department or division of his business. See Fort Worth Elevators, 70 S.W.2d at 406;
Southwestern Bell Telephone Co. v. Reeves, 578 S.W.2d 795, 800 (Tex. App.—Houston [1st Dist.] 1979,
writ ref’d n.r.e.). Texas Pattern Jury Charge § 7.15 defines a “vice-principal” as “a person who has the
authority to hire, discharge, and direct employees of the corporation or who has the authority to manage the
entire corporation or a department or division of its business.” Courts also use the phrase “alter ego” to
describe vice-principals. See Southwestern Bell Tel. Co., 578 S.W.2d at 800; see also Fort Worth Elevators,
70 S.W.2d at 400.
Must bear a relation to, or be referable to, or further the employer’s business.
If the vice-principal’s act does not have a relationship to the employer’s business or if the acts
were not referable to the company’s business, courts traditionally will not impose liability on the employer.
Arguably, the Supreme Court decision in GTE Southwest, Inc. v. Bruce, however, would impose liability on
an employer for its vice-principal’s acts even if they involved non job-related, personal issues. 998 S.W.2d
605, 618 (1998); see Trenton Hood, It’s Ten O’Clock: Do You Know Where Your Vice-Principal Is? The
Effect of GTE Southwest, Inc. v. Bruce On Vice-Principal Liability in Texas, 55 BAY L. REV. 267, 269
(2003). In GTE Southwest, Inc. v. Bruce, three GTE employees sued GTE for intentional infliction of
emotional distress based on the abusive conduct of their supervisor. Id. at 608. The record reflected that
over a period of two and a half years, the supervisor engaged in a pattern of “grossly abusive threatening and
degrading conduct” where he would regularly yell at them, use vulgarities, tell obscene jokes, and frequently
go into a rage and lunge at employees. GTE argued it was not liable because the supervisor’s acts were not
in the course and scope of his employment and not foreseeable by GTE. The court disagreed and found that
the acts were within the course and scope of his employment and the evidence supported the jury’s finding
in this regard. The court, however, went a step further and noted that the “regardless of whether [the
supervisor] acted within the course and scope of his employment, his status as a vice-principal of the
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corporation is sufficient to impute liability to GTE with regard to his actions taken in the workplace.” Id. at
618.
Based on GTE, a plaintiff could argue that once it established the status of vice-principal, the
employer is held liable for any act of its vice-principal. Cases decided since GTE have not expressly
addressed whether GTE changed the relationship test. Pre-GTE cases, however, were very clear that to
impose liability on an employer under this theory the vice-principal’s acts must bear a relation to the
employer’s business and it is arguably still the standard to impose liability.
For example, in Rhodes, the court held “that the liability of a corporation for the acts of its
vice principals is not absolute but is limited to those acts which are referable to the company’s business to
which the vice principal is expressly, impliedly, or apparently authorized to transact.” Rhodes, Inc. v.
Duncan, 623 S.W.2d 741, 744 (Tex. App.—Houston 1981, no writ). In Rhodes, furniture store hired a
manager, who was also involved in real estate ventures and helped several fellow employees invest. The
manager conducted some of his real estate business from the furniture store, which the defendant knew
about and did not object. When a real estate deal went bad for some of the employees, they sued the
furniture store for damages under the vice-principal theory. Because there was no evidence that the
furniture store engaged in any real estate ventures for profit or that the company or its vice-principals
received any profits from the ventures, the court found the employer was not liable for its vice-principal’s
activities.
In Calhoun v. Hill, the court of appeals found that an employer had no liability because the
vice-principal’s action had no relationship to the employer’s business. 607 S.W.2d 951, 953 (Tex. Civ.
App.—Eastland 1980, no writ). In that case, the survivors of an employee brought a wrongful death action
against the defendant, which operated a feed lot. The employee died after being crushed by a hydraulic gate
during a foot race with two other employees. A supervisor over saw the race and acted as the starter. The
Court reversed the jury’s finding that the employer was liable because the supervisor’s conduct in the race in
no way furthered the employer’s interest. The court then stated that the jury’s determination that the
supervisor was a vice-principal was immaterial to the issue of liability because the court determined that the
law does not “place upon any employer a duty to oversee or restrain their employees in personal activities
which constitute no part of doing their job.” Id. at 954. One wonders whether the result would have been
different had the accident occurred at a Nike shoe factory, instead of a feed lot.
Punitive Damages Available
Unlike vicarious liability, an employer that is sued under the vice-principal theory is exposed
to the potential for exemplary or punitive damages. See Hammerly Oaks, Inc., 958 S.W.2d 387, 391 (Tex.
1997); Fort Worth Elevators, 70 S.W.2d at 408. Thus, it is easy to see why this theory has become
increasingly attractive to plaintiffs trying to establish employer liability. An employer may be liable for
exemplary damages for a vice-principal’s act if one or more of the following conditions is satisfied: (1) the
employer authorized the doing and the manner of the act, (2) the employee was unfit and the employer was
reckless in employing him, (3) the employee was employed in a managerial capacity and was acting in the
scope of employment, or (4) the employer ratified or approved the act. Loram Maintenance of Way, Inc. v.
Ianni, 141 S.W.3d 722, 736 (Tex. App.—El Paso 2004, pet. filed); King v. McGuff, 234 S.W.2d 403, 405
(Tex. 1950) (citing Restatement (Second) of Torts § 909).
Some examples of situations in which liability under the vice-principal theory was found and
the court awarded exemplary damages against the employer are:
Purvis v. Prattco, Inc., 595 S.W.2d 103 (Tex. 1980): A family sued for actual and exemplary
damages when a hotel manager called the police to remove them from the hotel. The court found that the
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hotel was liable for the acts of its manager because it was the manager’s job to see that no unauthorized
persons were in any of the rooms. Id. at 105.
Wal-Mart v. Itz, 21 S.W.3d 456 (Tex. App.—Austin, 2000, pet denied): In this case, WalMart was liable for punitive damages for its manager’s conduct against an employee. The court found that
at least two instances of assaults of a sexual nature occurred when the manager “ordered [the plaintiff] to a
back room under a business pretext.” The court found that the manager’s supervisory position aided him in
committing wrongs under a business pretext.
Shearson Lehman Hutton, Inc. v. Tucker, 806 S.W. 2d 914 (Tex. App.—Corpus Christi 1991,
writ dism’d w.o.j.): In Shearson, the court affirmed a jury verdict on slander because there was sufficient
evidence that the senior vice president was a vice-principal and authorized to make statements about a
former employee, even if they went beyond what was normally said about departing employees.
IV. Liability for Negligent Hiring, Training, Supervision, and Retention
In contrast to vice-principal and vicarious liability, liability for negligent hiring, training,
supervision, or retention arises directly from the employer’s conduct. For example an employer can be
found liable for negligence in hiring an employee that the employer knew or should have reasonably known
was incompetent or unfit and thereby created an unreasonable risk of harm to others. See Wrenn, 73 S.W.3d
at 496. As one court stated:
[A]n action for negligent hiring provides a remedy to injured third parties who would be
foreclosed from recovery under the master-servant doctrine since the wrongful acts of
employees in these cases are likely to be outside the scope of employment or not in
furtherance of the master’s business.
Dieter v. Baker Service Tools (Dieter I), 739 S.W.2d 405, 408 (Tex. App.—Corpus Christi 1987, writ
denied) (internal quotations and citations omitted).
Thus, a negligent hiring claim does not hinge on whether the employee was acting within the
course and scope of his employment when he committed the wrongful act. Wrenn, 73 S.W.3d at 496. To
prevail under this theory, a plaintiff must show that the defendant owed her a duty, that the defendant
breached that duty, and that the breach proximately caused her damages. Greater Houston Transp. Co. v.
Phillips, 801 S.W.2d 523, 525 (Tex. 1990).
Duty
In general, there is no duty to control a third person’s conduct. Phillips, 801 S.W.2d at 525.
A duty will arise however where a special relationship exists between the parties, such as that between an
employer and its employees. Id.; Otis Eng’g Corp. v. Clark, 668 S.W.2d 307, 309 (Tex. 1983). The
employer-employee relationship may create a duty to a third party only if the third party’s harm is the result
of the wrongdoer’s employment. Houser v. Smith, 968 S.W.2d 542, 544 (Tex. App.—Austin 1998, no pet.);
see LaBella v. Charlie Thomas, Inc., 942 S.W.2d 127, 137 (Tex. App.—Amarillo 1997, writ denied) (“To
impose liability for negligent hiring, there must be evidence that the plaintiff’s injuries were brought about
by reason of the employment of the incompetent servant.”); Robertson v. Church of God, Int’l, 978 S.W.2d
120, 125 (Tex. App.—Tyler 1997, pet. denied) (“[T]here is no question that there must be some connection
between the plaintiff’s injury and the fact of employment.”).
No duty is created if an individual bears no relation to the employer’s business or if the injury
cannot be directly traced back to the fact of the wrongdoer’s employment. Guidry v. Nat’l Freight, Inc., 944
S.W.2d 807, 811 (Tex. App.—Austin 1997, no writ); LaBella, 942 S.W.2d at 137. In determining whether
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the defendant owed the plaintiff a duty in a negligent hiring, training, supervision, or retention case, courts
will consider several factors, including the risk, foreseeability, and likelihood of injury weighed against the
social utility of the actor’s conduct, the magnitude of the burden of guarding against the injury, and the
consequences of placing the burden on the defendant. Otis Eng’r Corp., 668 S.W.2d at 309; Houser, 968
S.W.2d at 544. Of all these factors, foreseeability of the risk is the foremost and dominant consideration and
required to establish duty and proximate cause. Phillips, 801 S.W.2d at 525; Wrenn, 73 S.W.3d at 496. But
the employer must not only have some knowledge of the employee’s condition, but the employer must also
affirmatively exercise some control over the employee. See Greater Houston Transp. Co., 801 S.W.2d 523,
526-27; DeLuna v. Guynes Printing Co. Inc., 884 S.W.2d 206, 210 (Tex. App.—El Paso 1994, writ denied).
Foreseeability
To prove foreseeability in negligent hiring, training, retention, or supervision cases, there
must be evidence that the plaintiff's injuries were brought about by reason of the employment of the
incompetent employee. Houser, 968 S.W.2d at 544 (emphasis added); Dieter v. Baker Service Tools (Dieter
I), 739 S.W.2d 405, 408 (Tex. App.—Corpus Christi 1987, writ denied); Porter, 900 S.W.2d at 386
(negligent retention) Peek v. Equipment Services, Inc., 906 S.W.2d 529, 534 (Tex. App.—San Antonio
1995, no writ) (holding that there was no basis for negligent hiring, retention, and supervision claims).
Without such a required connection, “an employer would essentially be an insurer of the safety of every
person who happens to come into contact with his employee simply because of his status as an employee.”
Houser, 968 S.W.2d at 544 (emphasis added); Robertson, 978 S.W.2d at 127.
In Robertson, for example, the court refused to impose a duty on a church that hired and
retained a minister that allegedly sexually assaulted his massage therapist during message sessions because
there was no connection between the hiring of the minister and the act he committed. Robertson, 978
S.W.2d at 122. The court stated that “there is no question that there must be some connection between the
plaintiff’s injury and the fact of employment.” Id. at 125. Plaintiff argued that the church should be held
liable for negligent hiring and retention because she and the minister had discussed religion and he had
invited her to his church. The court rejected this argument and explained “it is not plausible to conclude that
merely discussing one's occupation and employer while on personal business furnishes a connection
between the negligent hiring and the wrongful conduct of the employee.” See id.
In the Wrenn case discussed above in Part II, foreseeability was a key issue in the court’s
decision to reverse the summary judgment granted in favor of the employer regarding the plaintiff’s claim of
negligent hiring, supervision and retention. 73 S.W.3d at 499. Plaintiff’s evidence for the claim showed
that the rogue supervisor had a history of carrying a buck knife, threatening employees with a hammer,
having weekly confrontations with other employees, and using profanity. Id. In addition, another
supervisor knew of the rogue supervisor’s behavior and yet another supervisor was aware of an incident
where the rogue supervisor had knocked an employee down with a forklift and dropped a steel beam on him.
Id. The court held that this evidence was sufficient to create a fact issue as to whether the rogue supervisor’s
assault and resulting injuries “were a foreseeable consequence of the [employer’s] supervision.” Id. at 500.
Thus, the court reversed the summary judgment granted as to the negligent hiring, supervision and retention
claim and remanded it back to the trial court for further proceedings. Id.
If there is no evidence that the rogue employee has not exhibited a prior propensity for
violence or assault behavior, a claim for negligent, hiring, retention, supervision or training will not survive
the summary judgment stage. For example, in Garrett v. Great Western Distributing Co., the court upheld a
grant of summary judgment on a claim for negligent supervision where the facts showed the employer did
not know about its employees’ propensity for violence. 129 S.W.3d 797 (Tex. App.—Amarillo 2004, no
pet. h.). In Garrett, several beer distributor employees had engaged in a bar fight with the plaintiff while
they were off-duty. Id. at 799. The employees were in their uniforms and had driven their company trucks
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to the bar. One of the employees directed some comments at the plaintiff’s wife, and the fight ensued. id.
The husband and wife sued the distributor for vicarious liability, vice-principal liability, and negligent
supervision of its employees. With regard to the negligent supervision claim, the court upheld the summary
judgment in favor of the distributor because there was no evidence that any of the employees had ever
exhibited violent tendencies, engaged in fights, or otherwise had violent propensities before the fight. As
the court stated:
[T]he basis for responsibility lies in the master’s own negligence in omitting to supervise an
incompetent [or historically violent] employee whom the master knows or should have
known through the exercise of reasonable care was incompetent [or violent] and thereby
created an unreasonable risk of harm to others.
Id. at 803-04. Because the plaintiffs failed to show that the employer knew or should have known about
these propensities prior to the fight, the court held that the trial court properly granted summary judgment.
Loram Maintenance of Way, Inc. v. Ianni
Where there is clear evidence that a supervisor or employer knows of an employee’s
incompetence or violent propensities, courts will uphold a claim for negligent, hiring, training, supervision,
and retention. This also raises the potential for actual and punitive damages. Recently, in a case from the El
Paso Court of Appeals, the court held that an employer was liable when one if its employees shot a police
officer that had seen him in a violent argument with his wife. The incident occurred away from the job site
and while the employee was off-duty. See Loram Maintenance of Way, Inc., 141 S.W.3d 722 (Tex. App.—
El Paso 2004, pet. filed).
In Loram, the rogue employee was part of a crew that repaired railroad tracks Id. at 726. The
crew would work three months at a time, between thirteen to fourteen hours a day, and up to seven days a
week. Id. The crew members would stay at a hotel paid for by their employer, Loram, and the employees
wives and girlfriends were permitted to stay with them. Several of the crew members and supervisors would
take crystal methamphetamine to stay awake and alert. The supervisors would give crew members time off
to obtain more drugs for the crew. Id. On the day of the incident, Robert Tingle, a crew member, was
“strung out” on crystal meth and returned to the motel after working a twelve hour shift. At the motel,
Tingle began arguing with his wife, and took her to his car and threatened her with a gun. As the car was
moving, she jumped from the car and screamed for help. The plaintiff police officer was leaving a
restaurant when he saw the incident. As he approached Tingle’s car, Tingle shot him and left him severely
injured. The police officer sued Loram for, among other things, negligent retention and negligent
supervision. Loram sought summary judgment on the basis that it owed no duty to the officer and its
conduct was not the proximate cause of his injuries. Id. at 726. The jury returned a verdict in favor of the
officer for $800,000 in actual damages and $500,000 in punitive damages. Id. at 727.
Once again proving that bad facts make bad law, the court upheld the jury verdict based on
negligent supervision and retention because the supervisors knew of Tingle’s (and the rest of the crews)
pervasive drug use and a prior incident where Tingle had attacked another crew member’s wife with a knife.
Id. at 728. The court held that not only did the supervisors have knowledge of Tingle’s prior behavior, but
concluded that the field clerk had “some asserted control” over Tingle. Id. Thus, the court held that “a duty
was imposed on Loram not because it had mere knowledge of Mr. Tingle’s encourage drug usage and
altered state of mind, that is, his incapacity, but because of its negligent exercise of some asserted control
over Mr. Tingle once Loram’s supervisors acted affirmatively to prevent Mr. Tingle from causing an
unreasonable risk of harm to others.” Id. at 729.
Loram also challenged the legal and factual sufficiency of the jury’s finding that the
employer was the proximate cause of the police officer’s injuries and that the shooting was foreseeable.
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Again, the court stated that the evidence was sufficient to support the jury finding because 1) the supervisors
had knowledge of and encouraged and facilitated of the rampant drug use among the crew, 2) despite
warnings and complaints, a Loram supervisor ignored Tingle’s escalating drug abuse and violent behavior,
and 3) the same supervisor failed to follow the company’s drug testing and treatment procedure. Id. at 735.
Thus, the court concluded that Loram’s negligence was a substantial factor in causing the officer’s injuries
and the court not say that “that Loram could not have anticipated the general danger it created in their
negligent conduct.” Id. at 736. Accordingly, the court affirmed the jury’s verdict and award of actual and
punitive damages.
V. Strict Liability for Supervisors
Another problem area for employers with regard to rogue supervisors is sexual harassment.
In sexual discrimination/harassment cases, courts will impose strict liability on employers if a supervisor
commits discrimination and the employee suffers a “tangible job detriment.”
Quid Pro Quo
Under this theory of quid pro quo, “when a plaintiff proves that a tangible employment action
resulted from a refusal to submit to a supervisor’s sexual demands, he or she establishes that the
employment decision itself constitutes a change in the terms and conditions of employment.” Burlington v.
Ellerth, 524 U.S. 742, 753-54 (1998). If the employee cannot show such a nexus between the employment
action and the plaintiff’s refusal to submit to a supervisor’s sexual demands, then the employer is not
vicariously liable. Casiano v. AT&T Corp., 213 F.2d 278, 283 (5th Cir. 2000). If the accused is the
Plaintiff's supervisor for purposes of Title VII, the court must next “determine whether the complaining
employee has or has not suffered a tangible employment action.” Id.; see Faragher v. City of Boca Raton,
524 U.S. 775, 807 (1998) If she has, her suit is classified as a quid pro quo case subjecting the employer to
strict liability; if she has not, her suit is classified as a hostile environment case.” Casiano, 213 F.2d at 283
(internal quotations and footnote omitted); see Faragher, 524 U.S. at 807.
What is a tangible employment action?
A “tangible employment action constitutes a significant change in employment status, such as
hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision
causing a significant change in benefits” Ellerth, 524 U.S. at 760. A plaintiff who has been “constructively
discharged” or reassigned do not constitute a tangible employment action. See Rogers v. City County Health
Dept. of Oklahoma County, 30 Fed. Appx. 883, 887-88, and fn. 2 (10th Cir. 2002) (affirming summary
judgment for employer on plaintiff's quid pro quo claim because constructive discharge is not tangible
employment action and, “plaintiff effectively resigned before any such [tangible employment] action could
be taken against her”); Bonenberger v. Plymouth Township , 132 F.3d 20 (10th Cir. 1997) (quid pro quo
liability requires that job benefits are directly conditioned upon an employee’s submitting to sexual
blackmail). In addition, if a supervisor falsely accuses the plaintiff of wrongdoing, this does not constitute a
“change in employment status” and does not constitute a tangible employment action. Lamb v. City of West
Houston, 172 F.Supp. 827 (S.D. Tex. 2000).
Once the plaintiff establishes that a tangible employment action occurred, strict liability is
imposed. Ellerth, 524 U.S. at 754. The employer is not entitled to any affirmative defense and liability will
be imposed regardless of whether it knew of the supervisor’s wrongful conduct.
Hostile Environment Claims
As discussed above, if no “tangible employment action” occurred, the suit is a “hostile
environment” case and an employer will be held vicariously liable for a supervisor’s conduct if it was severe
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and or pervasive. See Faragher, 524 U.S. at 807. The employer has one limited affirmative defense and
will not be vicariously liable if it can establish that (1) it exercised reasonable care to prevent and correct
promptly sexual harassment, and (2) the employee unreasonably failed to take advantage of any preventative
or corrective opportunities provided by the employer or to otherwise avoid harm. See Casiano, 213 F.3d at
284.
If the alleged harassment is so “open and pervasive that the employer should have known of
it .., there is constructive knowledge” of the harassment. Sharp v. City of Houston, 164 F.3d. 923, 930 (5th
Cir. 1999). However, constructive knowledge may only be imputed to the employer when “someone with
authority over the victim” has constructive knowledge. Id.
An employer must show it “acted reasonably to prevent and correct promptly any sexually
harassing behavior.” Ellerth, 524 U.S. at 765. “Proof that an employer had such “procedures for
encouraging and facilitating employee complaints of sexual harassment and for thereafter dealing with them
swiftly and effectively” will satisfy this prong of the affirmative defense as a matter of law. See Casiano
213 F.3d at 287. Proof that an employee failed to take advantage of the employer’s complaint procedure
will satisfy the second prong of the affirmative defense.
For example, in Casiano, a male employee sued his female supervisor and his employer for
violations of Title VII based on quid pro quo sexual harassment and retaliation. See Casiano, 213 F.3d at
280. The plaintiff was initially employed as a customer representative working temporarily in another
department for another supervisor. He alleged that during this temporary assignment, his indirect
supervisor, would repeatedly ask him to bring her personal items such as drinks and food, called him
“honey,” and had initiated sexual conversations with him at least 15 times. Id. at 281. After he reported this
behavior to AT&T’s Equal Opportunity Department, they conducted an immediate investigation and
suspended the supervisor, but ultimately concluded there was insufficient evidence to support plaintiff’s
sexual harassment claim. Id. at 282. The 5th Circuit upheld summary judgment on the vicarious liability
claims in favor of defendant because it had exercised reasonable care to prevent and to correct promptly the
supervisor’s sexually harassing behavior by having extensive procedures to facilitate employee complaints
of sexual harassment and it had conducted a prompt and thorough investigation after suspending the
supervisor. Id. at 286. In addition, the court found that plaintiff had unreasonably failed to take full
advantage of AT&T’s preventative and corrective opportunities by never reporting the 15 propositions he
had received until months afterwards. Id.
In order to avoid vicarious liability for a supervisor’s sexually harassing conduct, an
employer should have a clear sexual harassment policy that prohibits such conduct and provides a clear
procedure for reporting sexual harassment. In addition, when faced with an allegation of sexual harassment,
an employer should take prompt, remedial action by conducting a prompt and thorough investigation of the
claims and immediately take remedial action against the supervisor based on the results. Such action should
include suspension or termination of the offending employee.
VI. Practical Tips
The key to prevention for liability under vicarious liability, vice-principal liability or
negligent hiring, training, retention, or supervision is making sure that all employees and supervisors, all the
way up to the President and CEO, are aware of workplace policies as well as their obligations under the law.
Communication and Training
It is essential that employers make sure that their employees read, sign and retain company
policies regarding workplace safety policies, non-discrimination, and non-harassment policies. Routine
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periodic reminder training and instruction on these policies is essential. Employers should also ensure that
their supervisors and managers are aware, and are routinely reminded, of their obligations under the law and
company policies with regard to harassment, discipline, and investigation. This includes training
management about the authority they have and how to deal appropriately with employees.
Investigation and Corrective Action
If an employee reports misconduct of a fellow employee or supervisor, the employer must
have in place and carry out policies to 1) investigate the claim, and 2) take appropriate action such as
counseling, corrective measures, punishment, demotion or termination. Telling a rogue supervisor or
employee to stay away from another employee is not enough. Responding to the complaining employee
with “boys will be boys” or “that’s just Bob – he doesn’t mean anything by it” is not acceptable. Neither is
suggesting that the two employees having the problem “talk it out” without some type of a neutral party
present. Allowing a rogue employee to boast that he did not have to do anything to correct his behavior is
also unacceptable. In Soto, the employer did not take appropriate steps to correct the supervisor’s conduct
until after litigation commenced, which the court felt was too little, too late and spelled liability for the
employer. Managers who fail to enforce the companies anti-discrimination policies, or who commit acts of
discrimination themselves, must be fired.
Have an Open Door Policy with Human Resources
Many times, especially in vice-principal cases, the employee did not know to whom to report
the misconduct either because a high-ranking official was the offender or management had created the
impression that any misconduct had to be reported to management before an employee could complain to
human resources. An employer should make sure that its human resources has an open door policy for the
investigation and resolution of an employee complaint. Most importantly, employers should treat
complaints against vice-principals, supervisors, managers, and other high-ranking company officials just as
seriously as complaints against “rank and file” employees.
Limit Authority of Vice-Principals, Supervisors, and Managers
The holding in GTE v. Bruce has created a real risk that employers may be liable for the acts
of its vice-principals, even though the acts are not related to the company’s business. Employers should
avoid granting too much authority to supervisors and limit their authority to make “ultimate employment”
decisions such as hiring and firing employees, without prior approval from higher levels of management and
the advice and consent of the human resources department. Managers and supervisors should also be made
aware that their misconduct could subject the company to actual and punitive damages. Vice-principals,
supervisors, and managers should be subject to the same disciplinary procedures that are in place for regular
employees in order to ensure proper remedial action.
VII. Conclusion
Cases such as Loram serve as a cautionary tale to all employers in how they hire, train and
supervise their employees and high ranking company officials and supervisors. Employers should be vigilant
in following their company policies and make sure that employees at all levels are aware of their rights and
obligations under the law.
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