Admitting Agency Status May Limit Claims

By Ted Olsen

When an employee injures someone, the employer might be sued based on the employee’s conduct within the scope of his/her employment (“respondeat superior” liability), or the employer might be sued for its own conduct, or both. A recent Colorado Supreme Court decision created a new rule of law to simplify this kind of case.

Assume a trucking company is aware that “Ed” has a seizure disorder that causes him to blackout unpredictably. The trucking company learned of Ed’s disorder during the hiring process, but hired him anyway. Maybe the company also has a history of overlooking drivers’ DUI convictions and substance abuse. One day Ed slams his rig into two cars on an interstate highway, resulting in fatalities. Ed denies having had a seizure and says the two cars hit each other and the bundle of commingled metal then spun into the front of his rig, making the collision unavoidable. Nevertheless, Ed is sued for negligence (i.e. his allegedly careless driving) and the company is sued for Ed’s negligence under the respondeat superior theory. Ordinarily, the company might also be sued for direct negligence, i.e. for its negligence in hiring and supervision of potentially dangerous drivers. The trucking company would then face wide ranging discovery into its hiring practices.

In the case, In re Ferrer, Case No. No. 15SA340 (Colo. February 27, 2017), the employer faced this kind of double-barreled liability, but the Colorado Supreme Court ruled that, when a plaintiff asserts a respondeat superior negligence claim against an employer for injuries caused by one of its employees, and the employer admits that its employee was acting in the course and scope of employment when the injuries occurred, then, as a matter of law, the plaintiff may not assert a separate claim based on the employer’s own negligence. So, in our example, if the employer admits that Ed was driving for the company when the fatalities happened, the plaintiff is not permitted to bring up the company’s own alleged negligent hiring and supervision.

Of course, in many cases (e.g. intentional assault or homicide), an employer will not want to admit that the accused employee was acting within the scope of employment. But when the admission is unavoidable, the employer might benefit from the admission by limiting its own direct liability.