Respondeat Superior Run Amok
Under recent Minnesota court decisions the respondeat
by Daniel S. Kleinberger
The phrase "respondeat superior" seems a poor candidate for alarums. Older than the Common Era, the concept is a staple of personal injury cases in which a plaintiff seeks to hold an employer liable for an employee's tort.
Nonetheless, alarm is appropriate. In a line of cases involving intentional torts, Minnesota courts have detached the respondeat superior doctrine from its policy foundations and created a Catch-22 for every employer. An employer's preventative measures are now evidence supporting respondeat superior liability, and, as a result, this doctrine of liability without fault threatens to swallow the separate, fault-based doctrines pertaining to negligent hiring, training, supervision, and retention.
In many of these cases, the plaintiffs are victims of an employee's sexual misconduct. In one case, the victims were only three and four years old.1 It is difficult to criticize decisions that stretch a concept to succor such victims, but Minnesota law in this area has gone beyond stretching. It has been recast in an extraordinary and fundamentally unfair way.
Understanding Respondeat Superior
To understand the problems with Minnesota's approach, it is necessary first to understand the traditional rule and rationale of this common law concept. Respondeat superior is a doctrine of enterprise liability that "attempts to link risks to benefits and hold accountable for risk-creating activities the enterprise that stands to benefit from those activities."2 The doctrine imposes on one party (traditionally labeled "the master") vicarious liability - i.e., liability without fault - for the torts of another party (traditionally labeled "the servant"). The reach of the doctrine depends on two concepts: "servant" status and "scope of employment." Respondeat superior applies only if a "servant" commits a tort while acting within "the scope of employment."
The key question in determining whether a master-servant relationship exists is whether, "with respect to the physical conduct of the performance of the services [the person performing the services] is subject to the other's control or right of control."3 Although the Restatement (Second) of Agency lists ten factors to guide analysis,4 in most modern cases the issue is clear. The modern employee is the "servant" of the modern employer.
In most modern cases, the "scope of employment" is also clear. For centuries the core domain of respondeat superior has been torts of negligence which cause bodily harm, and within that core the typical case involves an employee who is careless while "on the job." Interesting questions exist at the margin -such as "frolic and detour"5 and whether an employee whose job necessitates traveling from place to place is "within the scope of employment" when so traveling.6
As to intentional torts, the crucial question is how an employee's intentional misconduct can fairly be characterized as part of the employer's enterprise. The traditional answer is that an employee's intentional tort cannot be within the scope of employment unless "actuated, at least in part, by a purpose to serve the master".7 This restriction makes sense in light of the policy underlying respondeat superior:
Note the basic equation between "scope of employment" and an employer's "cost of doing business." When an employee:
it is difficult to characterize the harm as "a result of some business-related activity." It is difficult to see "some connection between the tort and the business such that the employer in essence assumed the risk [like an insurer -not merely on account of negligence] when it chose to engage in the business."
The Angry Cookie Salesman
In the overwhelming majority of states, the "actuated in part" requirement applies to respondeat superior claims involving intentional torts and supplies the connection between the tort and the business.9 Not so in Minnesota. In 1973, the Minnesota Supreme Court decided Lange v. National Biscuit Company, the case of the angry cookie salesman, and severed that connection.10
After the salesman assaulted a store manager, the manager sued the salesman's company, asserting direct claims of negligent hiring and retention and also a vicarious claim of respondeat superior. It was a disagreement over shelf space that had led to the assault, and in that disagreement the salesman was attempting, albeit in his own belligerent way, to serve his master.11 But was the assault itself so motivated? The Supreme Court declined to parse the sequence so minutely, rejecting "the arbitrary determination of when, and at what point, the argument and assault leave the sphere of the employer's business and become motivated by personal animosity" and holding that "the better approach is to view both the argument and assault as an indistinguishable event for purposes of vicarious liability."12
The decision could easily have been understood as a sensible application of the "actuated in part" requirement.13 Instead, the Court characterized itself as joining company with "other states which have abandoned the 'motivation test' and allow recovery for assaults arising out of or ancillary to the work being done by the employee."14 The Court did not, however, explore any of the policy implications of extending its holding beyond situations in which "the original precipitating event for the assault ... occurred in the scope of employment."15
The Abusive Psychotherapist
When the Court revisited the issue ten years later, it again eschewed any searching policy analysis. In Marston v. Minneapolis Clinic of Psychiatry and Neurology, Ltd. the Court jettisoned "the motivation test" for all respondeat superior claims based on intentional torts and characterized its holding as "consistent with the Lange rationale."16 In particular, the Court ruled that "[i]t is a question of fact" whether a psychotherapist's sexual misconduct with two patients came within the scope of his employment at a psychiatry clinic.
There were narrow grounds available for this very defensible holding. Although the therapist's outrageous conduct was clearly not intended to serve the master (the clinic that employed him), just as clearly it was the psychologist's employment that created a specially powerful and dangerous "occasion of sin." The therapist used and abused one of the most central tools of his employment Ñ the trust and confidence that a patient must place in the therapist in order for progress to be made. As the Court noted, "it was only through his relation to plaintiffs as a therapist that Dr. Nuernberger was able to commit the acts in question."17
Unfortunately, the Supreme Court eschewed any narrow ruling. Instead, it pronounced broadly that: "Whether [an intentional] act was within scope of employment should include consideration of whether acts were foreseeable, related to and connected with duties of employee and were committed during work-related limits of time and place."18 Further focusing on foreseeability, the Court noted: "There was testimony that sexual relations between a psychologist and a patient is a well-known hazard and thus, to a degree, foreseeable and a risk of employment."19
Problems Following Marston
The Marston holding has been problematic for the Supreme Court in at least two ways. First, and ironically, Marston prevented the Court from applying respondeat superior when an employee's acts were indisputably intended to serve, and had been approved by, the employer. In Hagen v. Burmeister & Associates, Inc., Paul Hagen was sued by his former employer, Burmeister & Associates, for improperly trying to switch the plaintiff's customers to Mr. Hagen's new employer.20 The plaintiff invoked the Uniform Trade Secrets Act (UTSA) and also sued Mr. Hagen's new employer, invoking respondeat superior. Mr. Hagen's efforts to recruit customers to his new firm were undeniably "actuated, at least in part, by a purpose to serve the master," and the new employer knew of Mr. Hagen's efforts, approved them in concept, and made available the letterhead and envelopes used in some of the solicitations.21 Under pre-Marston law, respondeat superior liability would have been a lead-pipe cinch. Mr. Hagen's efforts were as much part of the defendant employer's enterprise as could possibly be. However, Marston's complete repudiation of the "motivation test" made these circumstances irrelevant and turned enterprise liability on its head. The Supreme Court rejected the plaintiff's respondeat superior claim because the plaintiff had failed to submit proof of an industry-wide risk:
The notion of industry-wide hazard also figures in the Supreme Court's second post-Marston difficulty. Marston's "well-known hazard" has come to be the sine qua non of a respondeat superior foreseeablity claim, which in turn permits a jury to hold a non-negligent employer liable for harm caused by an employee's sexual misconduct. Claims of employer negligence are of waning importance, because they require the twin showings of foreseeability and breach of duty. Assuming the plaintiff can present sociological or other plausible evidence of industry-wide risks, employer fault as to the particular employee may be a moot point.23
Thus, for example, in Fahrendorff v. North Homes, Inc. the intentional tort was sexual assault committed by a counselor at a group home against a minor who had been placed in the home.24 The trial court granted summary judgment to the employer on the respondeat superior claim, and the Court of Appeals affirmed.25 The Supreme Court reversed, noting that the counselor's access to and influence over the victim grew out of the counselor's employment. On the key question of foreseeability, the Court wrote:
In contrast, in P.L. v. Aubert a student who had been sexually victimized by a teacher failed in a respondeat superior claim against the school district:
The Catch-22 Breaks Cover
After its reversal in Fahrendorff, the Minnesota Court of Appeals has dutifully applied Supreme Court precedent 28 and has thereby revealed the absurd ramifications of Marston, Fahrendorff, et al. The absurdity was presaged in Wilson v. Stock Lumber, Inc., an unreported case involving a road rage incident. 29 The Wilson decision suggests that respondeat superior might well apply if the plaintiff could present "any evidence that ... road rage is a well-known hazard in the delivery business."30
The absurdity became manifest in a pair of more recent cases, one reported and one not, both of which concerned an employee's sexual misconduct. In the unreported decision, Boykin v. Perkins Family Restaurant, the intentional tort was unwanted sexual touching by a coworker at a restaurant.31 The reported decision, L.M. v. Karlson, concerned a daycare worker who sexually molested several children, each of whom was either three or four years old.32
In both cases the respondeat superior claims turned on the question of foreseeability. In Boykin the court found evidence of foreseeability in the employer's well-meant preventative measures:
In Karlson, the court found evidence of foreseeability in the mere existence of concern:
Boykin highlights the Catch-22. It has become impossible for a Minnesota employer to comply with E.E.O.C. guidelines on sexual harassment policies without risking employer liability without fault for every incident of sexual harassment involving unwanted touching. In general, the more an employer engages in socially beneficial preventative measures, the more likely is the application of liability without fault. To be proactive is to engage in self-incrimination. With each poster, booklet and training session, the employer undermines its defense to a respondeat superior claim.
The practical consequences of a case like Karlson are equally significant. It does not take an actuary to foresee significant increases in liability insurance rates (and perhaps a dearth or even disappearance of coverage) for enterprises providing care to children and vulnerable adults. Moreover, in light of recent revelations of clergy sexual abuse, it does not take a Cardozo to foresee a widely expanded respondeat superior liability for religious organizations. Under Karslon, it will be a jury question whether sexual abuse comes within a cleric's "scope of employment" -no matter how well-meaning, reasonable, far reaching, and generally effective the church's, mosque's or synagogue's preventative measures may have been.
Religious organizations will not be alone in this quandary. Our schools are arguably in the same situation. The Fahrendorff majority gave fair warning:
Sexual misconduct by school teachers has apparently achieved the status of "well known hazard." If so, a jury may hold a school district strictly liable -without regard to fault -for any sexual misconduct of a teacher toward a student.
This situation is untenable and unjustified. The mere fact of having employees is beginning to resemble conducting an ultrahazardous activity, for which "the defendant is held liable although he [sic] has exercised the utmost care to prevent harm to the plaintiff that has ensued."36
What Is To Be Done?
Respondeat superior is a doctrine of enterprise liability, not a means to convert each enterprise into an insurer of its employees' sexual probity.37 Something, therefore, must be done to cabin this run-away doctrine.
The Minnesota Supreme Court declined to review either Boykin or Karlson. It may be necessary to ask the Legislature to restore some rationality to this area of Minnesota law.
Whatever branch is involved, reform should meet the following general objectives:
In particular, Minnesota law should recognize that:
A reasonably prudent employer has more need to take care when the third parties are toddlers and the risk is first-degree sexual conduct than when the third party is a co-employee and the risk is groping.
In short, when it comes to respondeat superior for intentional torts, the focus should be on whether the particular nature of the employee's task justifies considering the employment a type of an abnormally dangerous activity, for which "the defendant is held liable although he [sic] has exercised the utmost care to prevent harm to the plaintiff that has ensued."
2 Daniel S. Kleinberger, Agency, Partnerships and LLCs (Aspen 2002), ¤3.2.4 at 86; Lange v. National Biscuit Company, 211 N.W.2d 783, 785 (Minn. 1973) (referring to the notion as "entrepreneur theory").
3 Restatement (Second) of Agency ("R.2d"), ¤220(1). See Burman Co. v. Zahler, 178 N.W.2d 234, 238 (Minn. 1970).
4 R.2d, ¤220(2). For a detailed discussion of the servant vel non analysis, see Daniel S. Kleinberger, Agency, Partnerships and LLCs (Aspen 2002) ¤3.2.2 at 81-83.
5 Scope of employment can . . . cover situations in which the servant has temporarily detoured from some personal reason while still essentially serving the master's purpose." Kleinberger, Agency, Partnerships and LLCs, ¤3.2.5 at 89.
6 Id., ¤3.2.5 at 88.
7 R.2d, ¤228(c). See also Lange v. National Biscuit Company, 211 N.W.2d 783, 784 (1973) (describing Minnesota law prior to that decision).
8 Hagen v. Burmeister & Associates, Inc., 633 N.W.2d 497, 504 (Minn. 2001). See also D.M.S. v. Barber, 645 N.W.2d 383, 390 (Minn. 2002) (explaining that respondeat superior reflects "a public policy determination that liability for acts committed within the scope of employment should be allocated to the employer as a cost of doing business").
9 E.g. N.X. v. Cabrini Medical Center, 765 N.E.2d 844, 847 (N.Y. 2002); Grease Monkey International, Inc. v. Montoya, 904 P.2d 468, 472 (Colo. 1995); Stern v. Ritz Carlton Chicago, 702 N.E. 2d 194, 196 (Ill. App. Ct. 1998); Smith v. American Express Travel Related Services Company Inc., 876 P.2d 1166, 1170 (Ariz. Ct. App. 1994). The concept also appears in other parts of the law of agency. E.g., R.2d, ¤282(1) (reciting the "adverse interest" exception to the rule imputing an agent's knowledge to the principal; stating, subject to exceptions not relevant here, that a "principal is not affected by the knowledge of an agent in a transaction in which the agent secretly is acting adversely to the principal and entirely for [the agent's] own or another's purposes").
10 211 N.W.2d 783, 784 (Minn. 1973).
11 See Marston v. Minneapolis Clinic of Psychiatry and Neurology, Ltd., 329 N.W.2d 306, 309 (Minn. 1983) ( describing the argument that gave rise to Lange as relating to shelf space).
12 Lange, 211 N.W.2d at 785.
13 See Marston, supra n. 11, at 310 (explaining that "the statement by this court in Lange that 'the employee originally was motivated to become argumentative in furtherance of his employer's business' . . . was intended merely to indicate that, even under the motivation test, the original precipitating event for the assault in Lange occurred in the scope of employment").
14 Lange, 211 N.W.2d at 786 (citing cases from seven other states; emphasis added).
15 Marston, 329 N.W.2d at 310.
16 Id. at 311.
18 Marston at 307 (syllabus by the court).
19 Id. at 311. In contrast to its broad holding, the Court cited some very narrow authority Ñ principally two cases involving assaults like the one in Lange. The Court also cited one case for the proposition that "other courts have not found sexual assaults to be necessarily outside the scope of employment," Id., citing Lyon v. Carey, 533 F.2d 649 (D.C.Cir.1976). Lyon, however, viewed the sexual assault as an extension of a work-related argument: "We face, then, this question: Should the entire case be taken from the jury because, instead of a rod of wood (as in Dilli ), in addition to weapons of steel (as in Tarman); and in addition to his hands (as in Munick), Carey also employed a sexual weapon a rod of flesh and blood in the pursuit of a job-related controversy? The answer is, No." 533 F.2d at 655 (emphasis added). Lyon is not authority for completely jettisoning the motivation test.
20 633 N.W.2d 497, 504 (Minn. 2001).
21 Id. at 500.
22 Id. at 505.
23 Fahrendorff v. North Homes, Inc., 597 N.W.2d 905, 916 (Minn. 1999) (Anderson, J., concurring in part and dissenting in part) (lamenting that Minnesota law now "leaves almost no barrier in Minnesota to recovery by persons injured by the criminal acts of employees when, . . . there is no evidence of negligence on the part of the employer"). Moreover, "negligence" forseeability may be a more demanding standard than "respondeat superior" forseeability. E.g. L.M. v. Karlson, 646 N.W.2d 537, 544-5 (Minn. App. 2002).
24 597 N.W.2d 905, 916 (Minn. 1999).
25 Id. at 909.
26 Id. at 911-912.
27 P.L. v. Aubert, 545 N.W.2d 666, 668 (Minn. 1996).
28 See, e.g., Wilson v. Stock Lumber, Inc., No. C3-01-623, 2001 WL 1182796 at * 2-3 (Minn .App. 10/09/01) (carefully reviewing each major Supreme Court case).
29 Wilson v. Stock Lumber, Inc., supra, n. 28.
30 Id. at *5.
31 Boykin v. Perkins Family Restaurant, C9-01-1100, 2002 WL 4548 (Minn .App.01/02/02).
32 L.M. v. Karlson, 646 N.W.2d 537 (Minn. App. 2002)
33 Boykin, supra at *4.
34 L.M. v. Karlson, supra at 539 (syllabus by the court).
35 597 N.W. at 911, n. 1, citing Gebser v. Lago Vista Indep. Sch. Dist., 524 U.S. 274, 292, 118 S.Ct. 1989, 2000, 141 L.Ed.2d 277 (1998).
36 The quoted passage is from the Restatement (Second) of Torts, ¤519, comment d, stating the rationale for imposing absolute liability on "abnormally dangerous activities." Even California, which no longer categorically follows the "motivation test," stops far short of Minnesota's approach. See Lisa M. v. Henry Mayo Newhall Memorial Hospital, 12 Cal.4th 291, 907 P.2d 358, 48 Cal.Rptr.2d 510 (1995).
37 Justice Page would have resolved Fahrendorff on this basis. 597 N.W. at 913 (Page, J., concurring) (stating that the group home, "[a]s a provider of services for children in need of protection, North Homes had an absolute duty to protect Fahrendorff's health, safety, and best interests"). Contra Lisa M, 907 P.2d at 364 ("If ... the assault was not motivated or triggered off by anything in the employment activity but was the result of only propinquity and lust, there should be no liability.") (quoting Lyon v. Carey, 533 F.2d 649, 655 (D.C.Cir.1976)).
The author acknowledges his appreciation for the excellent research assistance of Nick Jellum, William Mitchell College of Law, 2003, in preparation of this article.
DANIEL S. KLEINBERGER is a professor of law at William Mitchell College of Law. He is author of Agency, Partnerships and LLCs (Aspen 2002) and other works on the law of agency.