What is meant by "negligent retention or supervision" in the context of workplace employment?

Employers should pay close attention to behavior and information gained about employees after the hiring decision has been made. In particular, employers should document and respond decisively to any indication that an employee has engaged in harassing conduct or potentially violent behavior.

Negligent supervision and negligent retention are the most common theories of employer liability for failure to monitor employees closely.

Negligent retention
Negligent retention involves the employer's continued employment of an unfit individual. To establish a claim for negligent retention, an individual must generally meet the following requirements similar to those found in the negligent hiring context:

• The employer retains an employee who is incompetent or unfit for the job.
• The employer knew, or should have known, that an employee presents an unreasonable risk of harm to others.
• The employee commits an intentional or negligent act, which results in injury to a third party.
• The third party's injuries are proximately caused by the employer's retention of the incompetent or unfit employee.

The basis for claims of negligent retention
Negligent retention claims may arise even when the employer has conducted an extensive investigation into an employee's background at the time of hire. During the course of employment, the employer may become aware of problems with an employee that indicate unfitness. A claim of negligent retention will arise when an employer becomes aware of problems with a particular employee but fails to take further action such as investigating, disciplining, discharging or reassigning the employee. In such cases, the employer has a duty to take appropriate action to protect other employees and the public. This duty is not limited to actions occurring on the employer's premises.

The employer knew or should have known
Negligent retention claims often focus on whether the employer knew or should have known of the employee's unfitness for duty. This question is often very fact-specific, but the courts have identified a number of factors that may be relevant to such a determination:

• The employee's overall work record.
• Whether the employer had received any complaints about the employee.
• The degree to which the employee's negative activities were related to the job.
• Whether any managers or supervisors witnessed the alleged negative activities.

Appropriate employer action
A second and related issue that often arises in the negligent retention context concerns the nature of appropriate employer action. Even if an employer learns of an employee's negative activities, the employer will only be held liable for negligent retention if it fails to take appropriate action to address the activities. Appropriate action may include:

• Disciplining the employee.
• Removing the employee from a position in which the person could harm other employees or members of the public.
• Exercising closer supervision over the employee.
• Terminating the employee.

Negligent supervision
Another claim recognized in the employment context is negligent supervision. To establish a claim of negligent supervision an individual generally must demonstrate the following elements:

• The employer knows, or should have known, that an employee is engaging in wrongful conduct.
• The employee's wrongful conduct is substantially certain to cause injury to a third party.
• The employee's conduct, through intentional or negligent action, results in injury to a third party.
• The injury was a reasonably foreseeable consequence of the employer's lack of supervision.

Negligent supervision claims are brought most often in the context of sexual harassment lawsuits. An employee may allege that poor supervision by the employer of another employee allowed the harassing conduct to continue.

In these circumstances, the success of the negligent supervision claim may depend on the following circumstances:

• Whether the employee/victim reported the harassment to the employer.
• Whether the employer otherwise knew or should have known about it.
• Whether the employer took prompt action to prevent further harassment.

Negligent supervision claims also arise when injuries occur to nonemployees through the conduct of an employee. For an employer to be found liable, courts generally require that the harmful conduct must have occurred on the employer's property or with something belonging to the employer (for example, an automobile). Courts sometimes examine whether the conduct occurred while the employee was working or on duty.

Thus, a negligent supervision claim might be successful if the employee's conduct occurred while subject to the supervision or control of the employer. Even then, employers generally must have had some reason to anticipate the harmful conduct by the employee before they may be held liable for failing to prevent the harm through properly supervising the employee.

Claims for negligent supervision are still fairly new in most states, but the number of such claims is likely to grow. A claim that an employer failed to take proper care in supervising its employees fills the gap between a claim for negligent hiring and a negligent retention claim. The best way for an employer to avoid negligent-supervision claims is to pay close attention to the conduct of employees after they are hired, to take prompt action if observation indicates that a particular employee may be behaving inappropriately, and to clearly document such actions and observations as they occur.

The success of a claim for negligent supervision or negligent retention may also depend on whether the employee or injured individual has brought claims under the state antidiscrimination laws. Taking advantage of such state law remedies may nullify the employee's claims for negligence.

This information is adapted from Ceridian's HR Compliance Reference System. Contact your Ceridian representative for more information about Ceridian's compliance solutions.