Under recent Minnesota court decisions the respondeat superior
doctrine of liability without fault threatens to swallow the separate,
fault-based doctrines pertaining to negligent hiring, training
supervision, and retention.

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:

Respondeat superior liability is not based on fault of the employer, but rather is imposed based on a policy choice that liability for acts committed within the scope of employment ought to be allocated to employers as a cost of doing business. Respondeat superior represents a compromise between two competing policies. On the one hand, we seek to protect and/or compensate those harmed as a result of some business-related activity. On the other hand, we are hesitant to impose liability on an employer not directly at fault for the act that caused the harm. The general policy, then, is that we will not impose such liability unless there is some connection between the tort and the business such that the employer in essence assumed the risk when it chose to engage in the business. That connection is the basis for the scope of employment test ... .8

Note the basic equation between "scope of employment" and an employer's "cost of doing business." When an employee:

• commits an intentional tort
• entirely for his or her own purposes, and
• the employer has not been negligent in hiring, training, supervising, and retaining the 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:

Burmeister was required to introduce at trial some evidence tending to show that Hagen's tortious act was foreseeable as that term is used in vicarious liability law: for example, evidence showing that the risk of employees misappropriating trade secrets is a well-known hazard in the insurance industry. As the district court noted in its order granting summary judgment for American [Hagen's new employer], however, Burmeister introduced no such evidence at trial. We will not assume, absent introduction of some evidence, that UTSA violations are a common hazard in the insurance industry.22

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 response to North Homes' motion for summary judgment, Fahrendorff submitted the affidavit from Krueger, a purported expert in the group home industry, expressly stating that "inappropriate sexual contact or abuse of power in [group home] situations, although infrequent, is a well known hazard in this field." (emphasis added). This sworn statement, although somewhat conclusory and lacking specific examples, is nearly identical to the testimony we relied on in Marston in holding that a question of material fact existed on the issue of foreseeability.26

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:

Here we find no evidence that such relationships between teacher and student are a "well-known hazard"; thus foreseeability is absent. While it is true that teachers have power and authority over students, no expert testimony or affidavits were presented regarding the potential for abuse of such power in these situations; thus there can be no implied foreseeability.27

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:

Knowledge that sexual harassment is a foreseeable risk of Perkins's business is evidenced by the fact that each new Perkins employee is required to go through an orientation procedure that includes reading a handbook that discusses Perkins's sexual-harassment policies, giving new employees an alert-line packet that includes a phone number for employees to report any complaints or concerns, and having new employees watch a video that discusses Perkins's sexual-harassment policies.33

In Karlson, the court found evidence of foreseeability in the mere existence of concern:

The affidavit of an expert in the field of day-care management stating that, in the context of managing day-care providers, sexual abuse of children is a paramount concern, is sufficient evidence of foreseeability to defeat the employer's motion for summary judgment on claims by the parents and children against the employer based on respondeat superior ... ."34

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:

Our decision in Aubert [rejecting a respondeat superior claim against a school district] was based solely on the lack of evidence presented in that case showing that sexual assaults of students by teachers were a "well-known hazard." We note that subsequent to our decision in Aubert, the United States Supreme Court stated in a Title IX case that "[t]he number of reported cases involving sexual harassment of students in schools confirms that harassment unfortunately is an all too common aspect of the educational experience."35

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:

• reassert some sensible, enterprise-liability based link between:
  • the particular nature of an employee's authorized scope of employment, and
  • the scope of the employer's risk for the employee's unauthorized, intentional misconduct
• recognize that tort law should pay special attention when an employee's authorized scope of employment necessarily involves dealing with vulnerable third parties, especially when the third person's vulnerability is one of the employee's central tools and abuse is unusually likely to escape reporting by the victim or detection by others
• use the law of negligence to support the second objective, so that the second objective does not drown the first

In particular, Minnesota law should recognize that:

1. An employer's duty to avoid ordinary negligence in hiring, training, supervising and retaining an employee will be more exacting:

a. the more the employee deals with vulnerable third parties,

b. the more serious any single incident of misconduct might be, and

c. the more likely abuse is to go unreported.

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.

2. A plaintiff should be able to use the so-called "motivation test" to establish respondeat superior liability for intentional torts.

3. To impose respondeat superior liability for an intentional tort where the tortfeasor employee is not "actuated, at least in part, by a purpose to serve the master," a plaintiff should need to show:

a. not merely evidence that people in the industry worry about the type of conduct or have taken preventative measures toward the conduct,

b. but rather that:

i. the employee possessed or generated extraordinary power or influence over some third party;

ii. that power or influence made the plaintiff unusually vulnerable to abuse and made the abuse unusually likely to escape reporting by a victim or detection by others

iii. proper exercise of that power or influence was necessary for the employee to perform his or her assigned tasks;

iv. the nature of the power or influence, or the situations in which it was to be properly exercised, made abuse essentially an inherent risk of the employment and therefore of the enterprise; and

v. the employee abused that power or influence when committing an intentional tort vis-ˆ-vis the third party.

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."

Notes
1 L.M. v. Karlson, 646 N.W.2d 537 (Minn. App. 2002).

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.

17 Id.

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.