Deep pockets make employers a prime target

Employer can be held liable for employee’s actions even if it did nothing wrong

Background

An employer, far more often than not, has deeper pockets than one of its employees. That makes it a ripe legal target when one of its employees does something wrong, and the injured person comes looking for a remedy.

The legal concept of vicarious liability is designed to give injured parties a chance at a remedy. Being able to crack open the employer’s wallet, rather than just the employee’s, gives that person a better chance at a substantial remedy. Vicarious liability differs from negligence, a distinction some employers don’t understand. An employer need not be negligent to be held responsible for the actions of one of its employees. Vicarious liability imposes liability in the absence of negligence or wrongdoing on the part of the employer.

The basic logic: It was the employer who created the risk and, therefore, it should also bear the loss.

A recent decision by the Newfoundland and Labrador Supreme Court, involving a teacher who sexually abused a student, provides a perfect example of how courts are dealing with vicarious liability and how employers can be held responsible even if they did nothing wrong.

The case: John Doe v. Avalon East School Board

John Doe (not the student’s real name) was born in 1976. In January 1995 he was a Grade 12 student at St. Michael’s High School on Bell Island in Newfoundland and Labrador.

Glen Neary was a teacher employed by the school board. He had been at the school since 1973. He taught a thematic literature course to Doe between 1993 and 1994. In January 1995 Doe was put into a computer course taught by Neary. Other students had started the course in September.

During Doe’s first day in class, Neary told him to leave the classroom and study alone in a computer room on the ground floor of the school because the other students had to write an exam. Neary escorted him to this room and that’s where the assault took place.

Neary placed his hands under Doe’s clothes and fondled his chest and genitals. Doe immediately removed Neary’s hands and told him to stop. Neary then placed $20 on the table and told him not to tell anyone what had happened.

A few days later the student approached another teacher with the story. The police got involved and the board took immediate action — Neary was relieved of his duties later that day. He subsequently resigned on Dec. 1, 1995. He was charged with a single count of sexual assault. He pled guilty and was convicted in January 1996.

Doe’s lawyers argued the school board should be held vicariously liable for Neary’s actions. The school board argued that it was impossible for it to control this type of behaviour and said, among other things, that since it was a non-profit organization delivering a necessary public service, it should not be held liable in the absence of any wrongdoing.

The law of vicarious liability

Justice Alphonsus Faour of the Newfoundland and Labrador Supreme Court said it is clear that, in the context of employer-employee relationships, fault is not necessarily connected to liability.

The issue he had to decide was whether the school board, which was blameless in the assault and did nothing to attract direct liability, was nonetheless liable to Doe because Neary was its employee.

The court looked at three principles set out by the Supreme Court of Canada in Bazley v. Curry and John Doe v. Bennett in determining if the board was vicariously liable for the teacher’s actions:

•the role and mandate of the employer, and its connection to the risk of wrongdoing;

•the relationship between the wrongdoer and the employer, and whether the defendant had control and direction over the wrongdoer; and

•the connection between the wrongdoer’s action and the employer’s enterprise.

The role and mandate of the employer. While not stating outright that school boards are inherently risky operations, Justice Faour said education is a service that is delivered directly to youths who are “vulnerable by virtue of their age.”

“When any body exercises the kind of authority that gives it a degree of control over a vulnerable population, there is a risk that harm may result if an employee abuses that authority,” he said.

The employer-employee relationship. There was no doubt an employer-employee relationship existed between Neary and the board. He was a professional educator who had been employed by the board for more than 20 years.

Neary was subject to the board’s direction, discipline and control. It was agreed by both parties that Neary’s power “to direct and control the movement of students like (Doe) was in accordance with his duties to educate and supervise students. He did have the power to direct a student like (Doe) to write a test alone in an empty classroom.”

The connection between the assault and the enterprise. The question facing the court was whether Neary’s actions were so closely connected with the authority given him by the board that it would be fair to hold the board vicariously liable for his actions.

An employer will not be held liable for acts of employees which rise independently of the employment relationship or where the workplace merely provided the opportunity for a wrongful act, said Justice Faour.

He said it was difficult to reach any conclusion other than that the board was responsible for Nearly’s actions.

“It was the employer’s mandate as a school board which placed in the hands of its teachers significant power and authority over the students: quite properly to carry out their teaching roles, but also enhancing the risk of something going wrong if that power was abused,” he said.

“It was the school board which gave Neary, as a trusted professional employee, the authority to set up the circumstances wherein this offence was committed.”

Therefore the court ruled the board was vicariously liable to Doe for the sexual assault committed by the teacher.

For more information see:

• John Doe v. Avalon East School Board, 2004 CarswellNfld 378, 37 C.C.E.L. (3d) 279, 2004 NLTD 239 (N.L. T.D.)



Why the school board thought it wasn’t liable

The school board raised a number of arguments against a finding of liability. Here’s a look at the issues and how the court handled them:

The deterrence factor. The board said there was no basis to think an action by the board could deter future harm because better policies and rules would not deter someone from being a sexual predator. Neary was a teacher with a good reputation. There was nothing the board could have reasonably done to prevent the assault, it said.

But the court said that argument misses the point of vicarious liability — there is no requirement that the board be found to have been able to prevent this specific assault. While it is not able to prevent this kind of assault, it is the board, as the employer, which is in the best position to minimize the risk of these incidents taking place.

The “chilling” effect. The board expressed concerns about the “chilling effect” of a finding of liability on the conduct of social organizations, especially a school board.

An Alberta court expressed concern about this in one of its decisions, stating that policies against closed doors, less personal involvement with students and no physical contact may reduce opportunity for abuse, but they come at a price.

“An assistant superintendent who worked in the system for 34 years said hugging kids when they needed it used to be commonplace, but he recently and regretfully had to tell a teacher it could no longer happen,” the Alberta court said. “The chill of strict liability may cause school boards to introduce policies and rules that would be retrogressive to the education system and ultimately harmful to the same children for whom protection is sought.”

But Justice Faour said that the possible consequences on a school board’s operations could not dissuade him from a finding of liability where the circumstances warrant.

“One could make the ‘chilling’ argument in the context of any organization,” he said. “Educational boards are not the only enterprises which provide a socially desirable service, but all must take responsibility for the risks they introduce or enhance by virtue of their enterprise.”

The student’s vulnerability. The board argued the student was not a child of “tender years” because he was 18 at the time of the assault.

The court said sexual assault can be devastating at any age. It said age may play into how much damages are awarded but “it cannot operate as a defence to an assault, nor can it operate as a defence to … vicarious liability.”

The student’s age. The board said that since the victim was 18, he was not in the same position as a child when it came to the teacher’s authority. Since he was over the age of 16, he was not required by law to attend school.

But the court called that argument disingenuous. Once the student presented himself at the school for the purpose of receiving an education, he was subject to all the rules of the school. “It would have been inappropriate, and probably improper, for (Doe) to have defied the direction of the teacher which placed him alone in the classroom,” said Justice Faour.

The severity of the assault. The board said the assault itself was minor, and should not attract liability.

But the court said the severity of the assault was not an issue. The court had already accepted the assault was substantial, having been included in the agreed statement of facts by both parties and resulting in a criminal conviction against the teacher and the loss of his career.

As with the student’s vulnerability, it said the question of the severity of the assault would be relevant at the stage of assessment of damages, not in determining whether the board was vicariously liable.

The board’s actions. The board argued that in acting swiftly, immediately suspending the teacher and reporting the matter to the police, it had done all that was expected of it and should not be liable. But the court said that only meant there were no aggravating factors.

“Its actions after the assault are irrelevant to the question of liability,” the court said.



The ‘Salmond’ test for vicarious liability

Vicarious liability will only attach to an employer in certain circumstances. There is a test, often called the “Salmond” test, which uses two rules to determine whether or not an employer is liable.

It states that an employer is not responsible for a wrongful act done by an employee unless it is done in the course of his employment. It is deemed to be done in the course of employment if it is either:

•a wrongful act authorized by the employer; or

•a wrongful and unauthorized mode of doing some act authorized by the employer.

The employer is even liable for acts which it has not authorized, provided they are so connected with acts which it has authorized that they “might rightly be regarded as modes — although improper modes — of doing them,” according to The Law of Torts, by Salmond and Heuston (published by Sweet & Maxwell).



Cases of note: Vicarious liability

Bazley v. Curry, a 1999 decision by the Supreme Court of Canada, involved a non-profit foundation that operated residential facilities for emotionally troubled children.

The employees did everything a parent would do, from general supervision to intimate duties like bathing children and tucking them in at bedtime.

Unfortunately, a check on a new hire did not turn up the fact the worker was a pedophile. After learning that worker had abused a child, the foundation discharged him. He was convicted of 19 counts of sexual abuse, two of which related to the plaintiff. The court found the foundation was liable on the basis the assaults took place in circumstances that flowed from its mandate, and the abuse of the authority given the employee.

Jacobi v. Griffiths, also a 1999 decision by the Supreme Court of Canada, came to the opposite conclusion. The case involved sexual assaults against a brother and a sister by an employee of a boys’ and girls’ club.

The assaults did not take place at the club, but at the employee’s home and, on one occasion, in a van being driven to a club-sponsored event.

The court said the role of the club in respect to the children was different than Bazley. In Bazley, the function of the employer was to act in the role of parents to the children, with all the intimacy associated in that role. In Jacobi, the employer organized recreational activities and the employee’s job did not give him the degree of control or intimacy with the children that would attract liability on the employer’s part.

For more information see:

Bazley v. Curry, 1999 CarswellBC 1264, 43 C.C.E.L. (2d) 1 (S.C.C.)

Jacobi v. Griffiths, 1999 CarswellBC 1262, 44 C.C.E.L. (2d) 169 (S.C.C.)

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