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When can a company be held liable for an employee’s actions?

On Behalf of | May 19, 2022 | Business Litigation

Companies of all sizes in virtually every type of industry rely on their employees for their success. Often, front-line employees are the only people in a large corporation with whom customers ever interact.

So if one of your employees injures or harms someone while they’re on the job, can the company be held liable? Typically, if it occurred while the employee was doing something related to their employment, the company may bear some legal responsibility. How much depends on several key factors. Let’s take a look at those.


If an employee caused harm through their negligence, it’s likely that their employer will have to assume some liability. An example would be if lack of training caused an employee to injure someone either directly or by providing inaccurate information.

There’s also something called “negligent hiring or retention.” If a company hires a convicted sex offender to a position that involves being around children and they harm someone, that could certainly fall under this category. The same would be true if an employee with a history of making dangerous mistakes that were never addressed causes an injury. 


That last example also involves another factor that’s considered when determining liability – foreknowledge. Did an employer know (or should they have known) that an employee could present a risk, and what (if anything) did they do about it? Failing to act could increase a company’s liability if something unfortunate happens.


Whether or not an employee intended to harm someone is also a factor in how expensive and damaging a case could be. Say that a waiter in one of your restaurants accidentally dumped a plate of hot food in a customer’s lap, causing serious burns. That’s an accident, and you’ll likely need to compensate the customer for medical bills and other damages. Your liability insurance should cover that. 

However, if a waiter just gets fed up with a rude customer and pours hot coffee on their lap, that could cost you substantially more. If that waiter had a history of retaliating against unpleasant customers, and their behavior was never addressed, that’s an added layer of culpability.

While you can’t reasonably guarantee that an employee’s actions or negligence will harm a customer (or anyone else), you can take proactive steps to minimize the chances of a serious incident. If you are facing legal action, it’s crucial to seek experienced guidance.