Confusion about vicarious liability

[Rip Verkerke <ripv@virginia.edu>]

A student asked:

I'm confused over a few points (more than I will include here) and elected
not to waste collective class time on my own problems.  Here are a couple of
them:

1) What exactly is the difference between respondeat superior and holding
the employer liable on a negligence theory?  At times these sound like the
same thing, and at others not.  (Sorry if this question isn't terribly
impressive but the confusion doesn't stem from lack of effort.)

2) I seem to have missed a step at the end of today's class.  How will the
imposition of liability on the highest-risk (to employees' bad propensities)
employers catalyze a move by the bad-propensity employees to lower-risk
jobs?  I thought that you sounded as though it was due to something
affirmative that the employees would do, but the only reason that I can
think of is that their options would be limited for them to lower-risk jobs
because higher-risk employers would have no choice in the face of heightened
liability but to increase screening procedures, and would simply refuse to
hire these bad-propensity employees (assuming that the screening would
ferret out the propensity).  I couldn't explain why the employees would
elect on their own to move to lower-risk jobs.

Again, I was trying really hard to get this material.  Hopefully there are
at least a few other confused souls out there.  Thanks in advance for your
reply--

Rip responded:

(1) There are two main differences between the two theories of liability.
First, an employer can be held liable in negligence (hiring, supervision,
retention) even if the employee's tortious act is committed outside the
scope of employment.  So if a jurisdiction uses a narrow scope of employment
test, negligence may often be the only way to hold an employer liable for an
intentional tort.  Second, punitive damages are far more likely to be
available on a negligence claim.

(2) I'm sorry that I was not clearer about the potential benefits of
imposing vicarious liability on high-risk employers.  The idea is to improve
matching (i.e., to move undesirable employees from high-risk to normal-risk
employment).  As you correctly intuit, the most important way to improve
matching is to increase incentives for aggressive screening by high-risk
employers.  But that screening effort should have a feedback effect on the
job search efforts of undesirable employees.  One would expect them to have
an incentive to consider alternative (lower risk) employment since their
time spent searching will be more likely to produce results.  So liability
affects employers directly and employees indirectly.
     Of course, liability also affects how quickly employers will discharge
employees who display a propensity to cause harm.  A desire to improve
matching arguably justifies focusing liability on high-risk employers to
encourage them to discharge undesirable employees more quickly.  However,
the danger of churning (among high-risk employers) makes discharge less
attractive as a precaution.  On balance, we often might be better off if the
first employer were encouraged to rehabilitate and reassign problem
employees.
     Current law gets the first half of this incentive problem exactly
right.  Negligent hiring law unquestionably becomes far more stringent for
high-risk occupations.  So employers have appropriate incentives for
aggressive screening.  As I suggested in class, however, courts still tend
to overvalue the precaution of discharge.  The point of my ravings was to
open your eyes to the competing concerns that I think should influence the
contours of vicarious liability.

I hope that helps clarify the argument (at least a little).  You might also
take a look at today's recap in which I will summarize the basic structure
of the matching and churning problems.  Don't hesitate to write again if you
(or anyone else) have further questions.

Warm regards,

Rip