Under Minnesota law, employers can be held liable for injury or death caused by their employees if the employer was negligent in retaining the employee after the employer knew, or should have known, that the employee was unfit and posed a risk to others. Because of this liability, it is critical for Minnesota employers to carefully monitor the performance of employees, especially those who could injure coworkers or members of the public. Once the employer is put on notice that the employee may pose a risk of injury to others, such as following a DUI conviction, auto accident, or safety incident caused by the employee’s negligence, the employer should take appropriate action which may include training the employee, reassigning the employee to non-safety sensitive duties, or terminating the employee.

The Elements of Negligent Retention
Minnesota courts treat negligent hiring and negligent retention as separate, but closely related, theories of recovery. In order to establish a prima facie case of negligent retention, the plaintiff must generally establish four requirements similar to those found in the negligent hiring context:

1. The employer must have owed a duty to the plaintiff to exercise reasonable care in its retention of the employee in question;
2. The employer must have breached that duty by retaining without appropriate action an employee whom it knew or should have known was unfit for duty;
3. The plaintiff must have been injured; and
4. The employer’s breach of its duty must have been the proximate cause of the plaintiff’s injury.

See generally LM v. Karlson, 646 N.W.2d 537, 545 (Minn. Ct. App. 2002); Bruchas v. Preventive Care, Inc., 553 N.W.2d 440 (Minn. Ct. App. 1996) (requiring there be some threat of physical injury or actual physical injury in claims for negligent retention); Yunker v. Honeywell, 496 N.W.2d 419, 424 (Minn. Ct. App. 1993).

Distinguishing Negligent Retention From Negligent Hiring
The principal difference between negligent hiring and negligent retention claims is the time at which the employer is charged with knowledge of the employee’s unfitness. Negligent hiring occurs when, prior to the time the employee is actually hired, the employer knew or should have known of the employee’s unfitness, and the issue of liability focuses primarily on the adequacy of the employer’s pre-employment investigation into the employee’s background. Robert B. Fitzpatrick, Negligence Claims Against an Employer, C932 ALI-ABA 729 (July 21, 1994). Negligent retention, on the other hand, occurs when, during the course of employment, the employer becomes aware or should have become aware of problems with an employee that indicated his unfitness, and the employer fails to take further action such as investigating, retraining, reassigning, or discharging the employee.

Minnesota Employers May Be Liable for Injury to Customers or Third Parties
In Longen v. Federal Express Corp., 113 F. Supp.2d 1367 (D. Minn. 2000), the plaintiff brought a negligent retention claim against FedEx for the conduct of one of its delivery drivers. The driver told plaintiff to follow him into the truck to assist with boxes, which was against company policy, and then the driver proceeded to grope the plaintiff. The court denied FedEx’s motion for summary judgment on the plaintiff’s negligent retention claims. According to the court, the plaintiff had presented enough evidence for a jury to reasonably conclude that FedEx should have known that the driver “posed a threat of harm to others.” The driver had been involved in previous incidents of sexual harassment directed at female customers. FedEx tried to argue that it did not have actual knowledge of the driver’s previous misconduct. The court countered FedEx’s argument stating that the standard for negligent retention is not actual knowledge, but rather, if the employer should have known about the employee’s misconduct. The court further stated that “a reasonable jury could find that, with minimal diligence, FedEx could have discovered the substance” of the previous allegations.

Examples of Appropriate Employer Action
A critical issue that often arises in the negligent retention context concerns the nature of “appropriate” employer action. Even if an employer learns of an employee’s dangerous propensities, it will only be held liable for negligent retention if it fails to take “appropriate action” to address those activities.

Such appropriate action may include:

1. Disciplining the employee;
2. Removing the employee from a position in which he or she could harm members of the public;
3. Exercising closer supervision over the employee;
4. Providing the employee with additional training; or
5. Terminating the employee’s employment.

See Yunker, 496 N.W.2d at 424. The action to be taken, and the appropriateness of that action, will of course vary from case to case depending upon the nature of the employee’s negative activities, the employee’s job duties and access to members of the public, and other factors.

Takeaways for Employers
Because Minnesota employers can be liable for accidents and injuries caused by their employees, if the employer was negligent in retaining a dangerous worker after the employer knew or should have known the employee was unfit, they should carefully monitor the performance of employees. In appropriate cases, this may include conducting Minnesota criminal background checks, implementing a Minnesota drug and alcohol testing policy, and checking DMV records for prior automobile accidents if the employee will be operating a vehicle on behalf of the employer. Once the employer is on notice that the employee may pose a risk to coworkers or the public, the employer should also take appropriate action.

The employer should comply with the EEOC Guidelines on Criminal Background Checks, the Fair Credit Reporting Act, and Minnesota Drug and Alcohol Testing in the Workplace Act when screening current employees to minimize the risk of negligent retention liability.

If your company needs assistance developing an employee handbook, employee screening program, discipline and discharge guidelines, or drug and alcohol testing policy, contact one of the Minnesota employment law attorneys of Trepanier MacGillis Battina P.A.

About the Author:
Minneapolis employment law attorney Craig W. Trepanier practices extensively in the area of employment law and has experience drafting pre-employment screening procedures, criminal background check programs, drug and alcohol testing programs, and FCRA compliance programs for Minnesota employers. Craig may be reached at 612.455.0502 or craig@trepanierlaw.com. Trepanier MacGillis Battina P.A. is a Minneapolis employment law firm located in Minneapolis, Minnesota.

Additional Information on Minnesota Employer Liability for Employee Negligence:
This is the third in a series of posts about the potential liability of Minnesota employers for accidents and injuries caused by their employees. This series applies to all employers, but is particularly relevant to Minnesota motor carriers, Minnesota household goods moving companies, and all Minnesota employers who require employees to operate vehicles in the course of their employment. The series includes:

Vicarious Liability of Minnesota Employers for Auto Accidents Caused by Employees
Employer Liability for Negligent Hiring Under Minnesota Law
Employer Liability for Negligent Supervision Under Minnesota Law
Employer Liability for Negligent Entrustment of Vehicles Under Minnesota Law