In Phillips v. TLC Plumbing, Inc., a California Court of Appeal addressed the issue of negligent hiring and retention, a common employment law stumbling block for companies. In the Phillips case, one of TLC's employees had been convicted for domestic violence and arson involving his former wife. TLC learned this about the employee when it hired him. The employee struck up a relationship with a customer while on a service call to her house. TLC terminated the employee a month later for misuse of a company vehicle, drug and alcohol use, and threatening a coworker. The terminated employee and the woman, however, became romantically involved and continued their relationship after the employee's termination. Approximately two years after his termination from TLC, the former employee shot and killed the woman. The woman's family then sued TLC for negligent hiring and retention.
TLC argued that it did not owe any duty of care to the plaintiff, because the murder had occurred two years after TLC terminated the employee. The California Appellate Court agreed, finding that "[B]ecause the employer-employee relationship ends on termination of an employee's employment, we conclude an employer does not owe a plaintiff a duty of care in a negligent hiring and retention action for an injury or harm inflicted by a former employee on the plaintiff even though that former employee, as in this case, initially met the plaintiff while employed by the employer."
The court also found it significant that the initial social relationship began outside of the employee's employment duties, and that the romantic relationship did not begin until after TLC terminated the employee. The court held that employers are not required to guarantee the safety of all customers or other persons that their employees come into contact with. And the employer cannot be liable unless it knows or should have known that the employee was unfit to perform his job duties.
This case contains some useful lesson for employers. First, it is important to conduct background checks of employees, especially if they work in unsupervised locations. In this case, the employer knew that the employee had a conviction for being violent towards a woman, yet let him work alone around women.
Second, employers need clear policies on how employees should conduct themselves around customers, clients, and third parties. While such policies will not be able to prevent all acts of misconduct, they will provide grounds to argue that an employer took reasonable steps to protect others.
Third, employers should take steps to keep information regarding customers and third parties confidential. Addresses, telephone numbers, social security numbers, and similar private information should be safeguarded.
Fourth, employers need to terminate problem employees as soon as reasonably possible. The sooner an employer terminates a problem employee, the more distance it can put between itself and any bad act that the employee may commit.
