Negligent hiring and/or retention of employees: urban legend or state law?

In 2009, a Wachovia (now Wells Fargo) teller searched through the bank’s customer information until she found a customer with a name similar to her husband’s name. The Wachovia teller than used the customer’s identity and credit to spend approximately $600,000.00 on vehicles, jewelry, and a trailer for her husband’s business.

The customer, a Georgia firefighter and emergency technician, did not take the teller’s actions lying down. Instead, he filed suit against Wells Fargo, alleging that the bank was liable for the actions of the teller, its employee. The lawsuit is now before the Georgia Supreme Court, which must decide whether the customer has a claim against Wells Fargo based on the Gramm-Leach-Bliley Act, which provides for the regulation and protection of consumer information.

While the Gramm-Leach-Bliley Act may not apply to every Georgia employer, the concept that a Georgia employer can be liable for the actions of its employees does apply to all employers. Georgia law requires employers to exercise ordinary care in selecting employees, and likewise requires employers not to retain employees the employers realize are “incompetent.” An employer will be liable for negligent hiring or retention if the employer either knew, or by exercising ordinary care should have known, that the employee was incompetent and that the employee’s incompetency hurt the plaintiff during the employee’s working hours.

For example, if an employer hires or retains an employee that employer knows is a habitual drunk driver, and if that individual becomes drunk and injurs another while driving the employer’s delivery truck, the employer will quite likely be held liable.  Of course, if the individual got drunk and injured another while driving the his or her personal vehicle on his or her own time, then the employer would not be liable.

The bottom line: because employers may be held liable for the actions of their employees during working hours, it is vitally important for employers to have a hiring and review procedure in place that allows the employer, while complying with state and federal anti-discrimination law, to ensure that it is hiring dependable, trustworthy employees.


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