United States: The Fourth Circuit Reiterates That Employers' Exposure To Vicarious Liability Is Not Boundless

Seyfarth Synopsis: The Fourth Circuit has issued a reminder of the boundaries of employer liability for defamation where there is no nexus between the employee's offensive speech and the individual's workplace responsibilities.

The theory of vicarious liability makes an employer responsible for an employee's misconduct if that conduct falls within the scope of employment. Courts have interpreted this to include situations where the tortfeasor-employee was performing work assigned by the employer, engaging in a course of conduct subject to the employer's control, or whose action could fairly and reasonably be traced to the execution of his workplace responsibilities.

The Fourth Circuit recently revisited this theory within the context of a defamation case to further clarify its boundaries. See Garnett v. Remedi Seniorcare of Va., LLC, No. 17-1890, 2018 U.S. App. LEXIS 15642 (4th Cir. June 11, 2018).

Case Background

Remedi SeniorCare of Virginia ("Remedi") is an institutional pharmacy that ships medications to nursing homes and other long-term care facilities. Plaintiff, Ms. Garnett, was a Remedi employee who worked alongside Mr. Try, a night supervisor. Ms. Garnett requested medical leave to undergo a procedure and while she was absent, Mr. Try postulated that she: (i) "was having surgery on her vagina because she got [a sexually transmitted disease ("STD"] cause that's the only reason a female gets surgery on her vagina;" and (ii) "was having a biopsy of her vagina."

Understandably, Ms. Garnett found these statements offensive and sued for defamation. She alleged that Mr. Try's employment duties included communicating with people at work. Since he made the offensive remarks while communicating with people at work, in her view, the remarks fell within the scope of his employment, making Remedi vicariously liable for defamation.

The district court's analysis focused entirely on whether the statement about her having an STD was defamatory. It did not opine on whether Mr. Try made the statement within the scope of his employment, so as to trigger vicarious liability on Remedi. The district court ultimately concluded the offensive statement was not defamatory because it was based on Mr. Try's faulty reasoning regarding the reasons why a female gets surgery on her vagina. Ms. Garnett conceded to the district court that the statements about having surgery and a biopsy were not actionable because they are not defamatory. According to the court, the listener was not required to share in this conclusion regarding the reason for her surgery.

Fourth Circuit Affirms Ruling but Provides a Different Rationale

The Fourth Circuit did not opine as to whether Mr. Try's offensive statements were defamatory. Rather, its analysis focused on whether his conduct was within the scope of his employment. The Court concluded that it was not. Remedi could therefore not be liable for vicarious liability under these facts.

The court explained that an employer can avoid liability for its employee's actions if an employee acts independently or in a manner that does not serve any plausible interest of the employer i.e. where there is no "nexus between the employee's workplace responsibilities and the offensive act." As such, the fact that an employee is at a particular location at a specific time as a result of his employment is not sufficient to impose respondeat superior liability on his employer.

Here, the court noted that plaintiff properly alleged in her complaint, that Mr. Try made the offensive remark while at work. But, this was only one factor in the scope of employment analysis. Plaintiff should also have connected his remarks to Remedi's business interests or otherwise explained how the remarks fell within the scope of his employment. She did not.

In this case, Mr. Try's job responsibilities included sending medications to long-term care facilities and managing Remedi's employees. When he made the offensive remarks, he was not giving instructions to subordinates or having a conversation that related in any way to Remedi's commercial interests. Rather, he simply was "gossiping." Gossiping was not part of his workplace responsibilities and plaintiff did not allege in her complaint that there was any nexus between the gossiping and his workplace responsibilities. Remedi could, therefore, not be vicariously liable for Mr. Try's conduct.

Takeaway for Employers

This is a significant win for employers in the Fourth Circuit as it reiterates the boundaries on vicarious liability. It also provides employers with strong persuasive language to cite when arguing to defend lawsuits alleging vicarious liability, including that:

  • "It would hardly be possible for an employer to [] police all employee interactions and [] ensure that employee conversation never crosses decorous lines."
  • "There are literally millions of verbal workplace interactions, some of which may, unfortunately, be quite offensive. But to hold that such statements invariably give rise to vicarious liability admits of no limiting principle."
  • "Employers . . . could hardly protect themselves from liability without proctoring the minutiae of a worker's daily life or imposing draconian restrictions on employee speech."
  • "It is difficult to see how employers could prevent all offensive or defamatory speech at the proverbial watercooler without transforming the workplace into a virtual panopticon."
  • "For all its undoubted value, respondeat superior and the resultant fear of liability should not propel a company deep into the lives of its workers whose privacy and speech interests deserve respect."

Going forward, these phrases will no doubt be cited repeatedly by employers seeking to limit liability for co-worker's (and perhaps, even supervisor's) offensive speech. Employers likely would also rely on these arguments to limit vicarious liability for sexual harassment and other offensive conduct in the workplace, not just offensive speech.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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