Can Employers Be Held Liable for Employees' Crimes?
What happens when an employee commits a crime? Or even just a wrongful act (not necessarily a crime)?
Is the employee liable alone? Or can the employer be held liable as well?
This is an interesting question, in light of the Halliburton VP's story that we wrote about this week. Joseph Andolino, senior vice president of Halliburton's tax department, was arrested in a prostitution sting, according to the Houston Business Journal.
While his actions don't necessarily render Halliburton liable, since there are no reports that he committed the crime while on the job, it still raises the question as to when an employer can be sued for the crimes (or even torts) of its employees.
Let's talk torts first.
Torts aren't criminal acts, but they are wrongful acts (or negligent acts) that cause harm to another person. If the tort is committed while the employee is acting within the scope of his job, then a lawsuit against an employer can be brought under vicarious liability. That means the employer and employee have an agency relationship, and the acts of the employee can be attributed to the employer.
