No Vicarious Liability Unless Statement Made Within Scope of Employment

Vicarious liability principles apply to defamation actions just as they do in tort law generally: the principal is normally liable for the tortious conduct of his agent committed within the scope of the agency relationship. Employers can thus be held liable for defamatory statements made by their employees while acting within the scope of their employment. This does not mean, however, that employers need to police every single employee interaction lest they be subject to defamation liability. Virginia businesses cannot be held liable for employee statements made outside the scope of their employment. But what does that mean, exactly?

On June 11, 2018, the Fourth Circuit decided the case of Sade Garnett v. Remedi Seniorcare of Virginia, LLC. Remedi SeniorCare is an institutional pharmacy that ships medications to nursing homes and other long-term care facilities. Sade Garnett worked at its Ashland, Virginia location, often alongside Aaron Try, a night supervisor. One day, Garnett told Try she would be out the next day to undergo surgery. During that absence, Try allegedly told other Remedi employees that “Sade was having surgery on her vagina because she got a STD [be]cause that’s the only reason a female gets surgery on her vagina,” and that “Sade was having a biopsy of her vagina.” Garnett sued Remedi for defamation, based on the false STD accusation.

The district court found the statement was “clearly only Try’s opinion based on his faulty reasoning,” and that “no reasonable person would take Try’s statement to be anything more than pure conjecture.” On that basis, it dismissed the case as not defamatory as a matter of law. On appeal, the Fourth Circuit disagreed, finding that a reasonable listener could very well infer that the supervisor had inside knowledge of the plaintiff’s sexual activities and medical history, and that a false accusation of having a sexually-transmitted disease could very well carry a defamatory meaning. But that wasn’t the end of the matter.

The lawsuit was not against Try but his employer. So the question because: assuming the statement at issue was defamatory as a matter of law, under what circumstances could the employer be held vicariously liable under the doctrine of respondeat superior?

The general rule, as stated above, is that employers can be held responsible for an employee’s misconduct if that conduct falls within the scope of the employee’s employment. According to the Restatement (Third) of Agency Law–and followed by the court as persuasive authority–this requirement limits vicarious liability to situations in which the employee was either (a) performing work assigned by the employer or (b) engaging in a course of conduct subject to the employer’s control. Employers are not liable when an employee acts independently or in a manner that does not serve any goal of the employer. “In other words,” the court noted, “there must be a nexus between the employee’s workplace responsibilities and the offensive act.”

The Supreme Court of Virginia has held that an employee’s act falls within the scope of his employment only if (1) the act “was expressly or impliedly directed by the employer, or is naturally incident to the business, and (2) it was performed…with the intent to further the employer’s interest.” Kensington Assocs. v. West, 234 Va. 430, 432 (1987). If a tort does not further an employer’s interests, the employer can only be held liable if the tort can be fairly and reasonably traced to the employee’s workplace responsibilities. Gina Chin & Assocs., Inc. v. First Union Bank, 260 Va. 533, 542 (2000). Sometimes, vicarious liability will exist even where the employee acted out of self-interest and in violation of the employer’s policies, if the tort was committed through the execution of professional responsibilities.

In this case, the comment was made at work, but that fact alone was not dispositive and did not end the inquiry. The court held that although Try’s remarks were made at work, his statements had nothing to do with Remedi’s business interests. Try was hired to help send medications to long-term care facilities and to manage Remedi employees. “Gossiping to his co-workers” was outside the scope of his employment. The gossiping did not occur in the course of carrying out any task on Remedi’s behalf, and did not relate in any way to Remedi’s commercial interests.

Because Try’s comments were not made within the scope of his employment, the court held that Remedi could not be held vicariously responsible for them, even if they were defamatory. For that reason, the court affirmed the dismissal of the case with prejudice.

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