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Dr. Nick Oberheiden

Aaron Wiley
Former State &
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S. Amanda Marshall
Former U.S. Attorney

Lynette Byrd
Former Assistant
U.S. Attorney

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Can Your Company Be Sued For Crimes Committed By Your Employees?

Categories: Criminal Law & Process

employee in handcuffs

Aggressive Representation For Your Company

The problem. One day you discover that one of your employees has been arrested over the weekend or overnight.  Perhaps police officers have even come to your office to effectuate the arrest or execute a search warrant for the employee’s files or computer.  On the other hand, maybe the employee has not yet been arrested, but has been told that he is under investigation for commission of a state or federal crime.

In addition to the obvious problems for your employee, and the potential loss of his work product while he is fighting criminal charges or, potentially permanently if he is found guilty or incarcerated, you as a business owner need to protect yourself against civil liability that could result from your employee’s actions.  If the crime of which your employee is accused has an identifiable victim – for example, if he or she is accused of a DUI causing an accident and injuring another person, charged with sexual assault, or indicted for perjury – that victim may see you and your company as the deep pocket and seek to hold you civilly liable for your employee’s bad behavior.

Potential liability. At first glance, you might think that your company could not possibly face a civil monetary judgment for the criminal behavior of an employee.  However, in certain circumstances, you could indeed face liability.  For example, what if the alleged sexual assault happened on company property?  What if the DUI accident occurred when the employee was on a business trip?  What if the perjury took place while the employee was giving deposition or trial testimony on behalf of the company or because she witnessed something relevant on the job?

For the most part, you can expect the victim’s lawyer to be very creative in trying to find a method by which he can tie your company in to the bad acts that your employee committed.  After all, your employee may not have much money, and his cash is likely to be spent on criminal lawyers and defense.  From the perspective of a plaintiff’s lawyer, the company is a much more attractive defendant – it likely has more money, and it may be enticed to settle out of court quietly rather than let the employee’s criminal behavior become public knowledge.  However, you should not be too quick to agree to bear any responsibility, even if the crime did touch the workplace in some manner.

Most courts, including those in Texas, will hold an employer liable for the acts an employee commits that are “within the course and scope of his employment,” whether or not the employer was aware of the actions as they were taking place.  The perjury example given above could lead to employer liability, because giving the testimony was done within the scope of the person’s employment.  Another common example is that of a pizza delivery driver whose employer guarantees delivery in 30 minutes or less.  If the driver is speeding and hits a pedestrian, the employer is likely to be liable in a civil action brought by that person even though the employer did not instruct the delivery driver to speed.  Courts are likely to find that the guaranteed delivery time meant that the driver was acting within the course of his employment when he sped off with the pizza.

On the other hand, courts are less likely to find that your employee was acting within the scope of his or her employment when they commit a violent crime such as sexual assault or an intentional crime such as a DUI accident.  It would not be within the scope of someone’s employment to rape another individual, even if that person is a co-worker and even if the incident happened in the workplace.  Similarly, while an employee may be expected or required to drive on a business trip, unless he or she was leaving a company event at which the alcohol was served, the employer is not likely to be found responsible for the employee’s criminal behavior in drinking and driving.

Nonetheless, there is another consideration that is often raised in the context of violent crimes – negligent hiring or retention.  If the company had actual knowledge of its employee’s propensity to commit this type of crime, but hired him and allowed him to continue working there, they are likely to be found liable for crimes committed by that employee.  This means, for example, that you must consider dismissing or suspending the employee when he or she is arrested, lest another crime is committed while that person remains on your payroll.  But, in addition, your business may be responsible for criminal activity even if you had no actual knowledge of the individual’s criminal past, if you were negligent in hiring that person in the first place.  For example, did you fail to conduct a criminal background check that would have revealed that the employee in question had two prior DUIs, or a suspended license?  Did you fail to verify his prior employment or claimed educational background when doing so would have revealed a prior incarceration?  In either of these situations, a court may very well find that even though you did not know of the criminal past, you should have known of it, and your failure to find out about it could be a costly mistake for you and your business.  A similar result may occur if an employee has made threats, carried weapons inappropriately, or sexually harassed co-workers.  Such actions must be addressed swiftly and appropriately to keep the risk of eventual liability as low as possible.  Note, too, that you need to take particular care depending on the job for which the person has been hired.  For example, you should probably check the driving record of any employee whose job will involve driving.  Courts have also required employers to look closely at employees whose job involves interacting with customers, particularly if they will be entering customers’ homes.

How to fight back. If one of your employees has been charged with committing a crime while on the job or you have been sued for an employee’s criminal behavior, you need lawyers who understand the rules. More so, you need excellent advocates that have the experience and skillset to protect your company and your assets against an alleged victim looking to cash in. Remember, time is of the essence when it comes to litigation. You need to understand your exposure and take steps to protect yourself as soon as possible. A free initial consultation with one of our civil litigators will give you a better understanding of the process and the likelihood of a victory.

Has an Employee Committed a Crime? Contact Qualified Attorneys For a Free Consultation

If one of your employees has been arrested or charged with a crime, you should contact the experienced attorneys at Oberheiden, P.C. to see if you could be civilly liable. Get a free and confidential consultation and benefit from talking to the former federal and former state prosecutors and experienced litigators of Oberheiden, P.C. to assess your case.

Oberheiden, P.C.
Litigation. Compliance. Defense.
(800) 810-0259
(214) 469-9009

Who Will Handle Your Case

When you hire us, you will not work with paralegals or junior lawyers. Each lawyer in our Healthcare Practice Group has handled at least one hundred (100) matters in the healthcare industry. So, when you call, you can expect a lawyer that immediately connects with your concerns and who brings in a wealth of experience and competence. For example, you need someone like Lynette S. Byrd, a former federal prosecutor in healthcare matters, who recently left the government and who is now sharing the valuable insights she gained as a healthcare prosecutor with our clients.

Dr. Nick Oberheiden

Dr. Nick

Lynette S. Byrd

Lynette S.