Vicarious liability
Legally Speaking
By Clifford Warren Lober, MD, JD, December 1, 2019
Question: What is vicarious liability?
Answer: Vicarious liability is the responsibility that employers (the “principals”) have for negligent actions and omissions of their employees (the “agents”) incurred in the course and scope of their employment. This is based on the doctrine of respondeat superior (“let the master answer”), which holds that those who direct or control the conduct of employees, and stand to gain from their actions, are usually in the best financial position to compensate those harmed. They should be held responsible for their employee’s negligent actions or omissions.
Q: Are employers vicariously liable for the action of independent contractors?
A: In order to determine whether vicarious liability exists, it is critical to determine if the accused individual is an employee or an independent contractor. We have already discussed how to make this determination in the April 2016 Legally Speaking column. A key distinction is usually whether the employer has the “right to control” the actions of the individual. When reasonable doubt exists, courts frequently consider the individual an employee and thus hold the employer (the “deep pocket”) vicariously liable.
When an independent contractor is retained, there is usually no vicarious liability. Although it would be a stretch, a plaintiff attorney could allege negligent hiring (which is not a form of vicarious liability) if, for example, you retained an unlicensed, inexperienced electrician to rewire your office.
Q: What do you mean by “course and scope” of employment?
A: In order for an employer to be held vicariously liable for the actions of an employee, those acts typically must have been performed during the usual and customary work hours of the business, at the place of employment, and have been conducted for the benefit of the employer. However, there are exceptions to these factors. If, for example, an employee gets into an automobile accident while delivering biopsy specimens to your pathology laboratory, you may be vicariously liable since the employee was performing a task at your direction and for the benefit of your practice.
Q: Are employers responsible for all actions of their employees during the course and scope of their employment?
A: Employers are usually not responsible for intentional wrongs such as assault or battery. If, for example, your receptionist or nurse gets upset and slaps a patient, the employer is typically not held vicariously liable unless the employer knew or reasonably should have known that the employee had a propensity to take such action. A plaintiff attorney thus could try to hold the employer responsible by alleging negligent hiring or supervision.
Q: Is vicarious liability the same as ostensible agency liability?
A: No. Ostensible agency liability (also called “apparent agency”) arises in a situation where (1) negligence has occurred, (2) the patient reasonably believed that the offender was an employee of the practice, and that (3) he or she detrimentally accepted or relied on that provider’s advice or treatment. If a dermatologist who does not perform Mohs surgery, for example, has a Mohs surgeon who is not employed by the practice perform surgery in their office and fails to inform the patient that the surgeon is not an employee, the patient may have recourse against the practice under the theory of ostensible agency liability.
The key to avoiding ostensible agency liability is to make sure that the patient understands and acknowledges, preferably in writing, that the provider is not an employee of the practice. This can be accomplished by having your receptionist inform the patient of this fact at the front desk and having them sign a form to memorialize this fact. Furthermore, the independent contractor who is performing a service should also clearly inform the patient that he or she is not an employee of the practice.
Q: If a dermatologist performs a procedure in the hospital setting with the assistance of a hospital employee, is he or she vicariously responsible for that employee’s performance?
A: It depends on your jurisdiction and the circumstances. Years ago, most states operated under the theory that the surgeon was the “captain of the ship” and was responsible for any and all misadventures in the operating room regardless of who may have committed or contributed to an error. That theory has subsequently been replaced in numerous jurisdictions by the concept of the “borrowed servant” under which the surgeon can be held vicariously responsible for the actions or omissions of the “borrowed servant” (the agent) if the surgeon (the “master” and the principal) had the “right” to control the latter’s behavior or the “manner of performing it,” regardless of whether or not the surgeon actually exercised that right. Many jurisdictions, however, are now hesitant to hold physicians responsible for the actions of other medical professionals in the hospital setting (such as licensed, hospital-employed nurse anesthetists).
Q: Are there other circumstances under which a physician can be held liable for the acts of others?
A: Depending on state laws, partners may be liable for the actions of other principles of the partnership. If a physician is involved in a partnership agreement, it is important to seek legal advice on how to limit or avoid potential partnership liability.
Q: What should I do to avoid vicarious liability?
A: Make sure that your malpractice insurance covers you for the acts and omissions of your employees. Your processes of hiring and supervising employees should comply with state and federal laws and be documented. If you are aware that an employee is not complying with your policy and procedures or has committed a significant wrong, retaining them may provide the basis of future liability since their previous noncompliance may be discoverable. If someone who performs a service for your patients is an independent contractor, make sure your patients are aware of this and memorialize it in writing to avoid liability under the theory of ostensible agency liability. If you are in a partnership, seek legal advice on how to avoid or minimize potential partnership liability.
