Opinion ID: 2099916
Heading Depth: 2
Heading Rank: 1

Heading: The Rationale

Text: Over the years, commentators have offered various justifications in support of respondeat superior liability. For instance, Judge Posner explained that the principle has sometimes been thought of as an example of the law's sympathy to deep-pocket arguments. Richard A. Posner, Economic Analysis of Law § 6.8, at 204-05 (5th ed. 1998) [hereinafter Posner, Economic Analysis ]. Simply put, because employees often lack sufficient assets to pay tort judgments, respondeat superior is necessary to allow victims to reach into employers' deep-pockets for compensation. Ultimately, however, this is an unsatisfactory, or at least incomplete, explanation, id., especially since the principle of respondeat superior evolved during a period in which the common law was not noted for its sympathy toward accident victims. Moreover, there are now limits on the employer's liability. The employer is strictly liable only for damages resulting from the tortious acts of his employees. A victim injured by an employee who is exercising due care and who has not acted intentionally has no claim against the employer. And the employer is only liable for acts of his employee committed in the scope of the employment. See id. (specifically noting this requirement as proof of the inadequacy of a pure deep-pocket explanation for respondeat superior). Thus, it is clear that the justification for the rule has to be more than just forcing the employer to compensate victims because he can afford to do so. Various judges and commentators have recognized this inadequacy and have offered myriad alternate, or at least supplemental, and more robust rationales for the rule. See W. Page Keeton et al., Prosser and Keeton on the Law of Torts 500 (5th ed. 1984) [hereinafter Prosser and Keeton] (discussing the multitude of very ingenious reasons in support of vicarious liability). One of these supplemental rationales for respondeat superior liability can be found in the field of economics. The economic explanation for respondeat superior focuses first on the complete helplessness of the accident victim to avoid incorrect employment decisions by exercising care or by altering his activity. This in itself would be an insufficient reason for imposing strict liability if the employer could always or at least most of the time prevent negligence by his employees simply by exercising care in his selection and supervision of them. But employees will sometimes be careless even if they are carefully screened and supervised, if only because their lack of ready assets reduces their financial incentives to take care. And there are a number of activity measures (as distinct from care measures) that an employer can take to reduce accident behavior by his employees, including delegating more work to independent contractors and giving employees simpler tasks requiring less care. However, the most important reason for respondeat superior is the fact mentioned that employees often cannot pay a tort judgment against them. Our point is not a deep-pocket point; it is that the employer can use the threat of termination as a substitute for employee tort liability in inducing employees to act with due care, and that he will do so only if the employee's carelessness is a cost to him. Making the employer liable for his employee's tort serves to enlist the employer as a substitute enforcer of tort law where the primary enforcement mechanism, a tort action against the immediate tortfeasor, is unworkable. William M. Landes and Richard A. Posner, The Economic Structure of Tort Law 120-21 (1987) [hereinafter Landes and Posner]; see also Posner, Economic Analysis § 6.8, at 204-05 (The rationale for [respondeat superior] is that most employees lack the resources to pay a judgment if they injure someone seriously. They therefore are not very responsive to the threat of tort liability. The employer, however, can induce them to be careful, as by firing or otherwise penalizing them for their carelessness. . . . Making the employer liable for his employees' torts will give him an incentive to use such inducements.); Alan O. Sykes, The Boundaries of Vicarious Liability: An Economic Analysis of the Scope of Employment Rule and Related Legal Doctrines, 101 Harv. L.Rev. 563 (1988) (discussing the economic efficiency of vicarious liability). The Prosser and Keeton treatise offers a similar explanation: What has emerged as the modern justification for vicarious liability is a rule of policy, a deliberate allocation of a risk. The losses caused by the torts of employees, which as a practical matter are sure to occur in the conduct of the employer's enterprise, are placed upon that enterprise itself, as a required cost of doing business. They are placed upon the employer because, having engaged in an enterprise, which will on the basis of all past experience involve harm to others through the torts of employees, and sought to profit by it, it is just that he, rather than the innocent injured plaintiff, should bear them; and because he is better able to absorb them, and to distribute them, through prices, rates or liability insurance, to the public, and so to shift them to society, to the community at large. Added to this is the make-weight argument that an employer who is held strictly liable is under the greatest incentive to be careful in the selection, instruction and supervision of his servants, and to take every precaution to see that the enterprise is conducted safely. Notwithstanding the occasional condemnation of the entire doctrine which used to appear in the past, the tendency is clearly to justify it on such grounds, and gradually to extend it. Prosser and Keeton at 500-01 (footnotes omitted). In 1936, our own predecessor court explained the purpose of the doctrine as follows: The doctrine of respondeat superior is at best a harsh rule, dictated by considerations of public policy and the necessity for holding a responsible person liable for the acts done by others in the prosecution of his business, as well as for placing on employers an incentive to hire only careful employees. Johnson v. Brewer, 266 Ky. 314, 98 S.W.2d 889, 891 (1936). In Ira S. Bushey & Sons, Inc. v. United States, 398 F.2d 167 (2d Cir.1968), one of the most cited respondeat superior cases involving an intentional tort, Judge Friendly rejected many of the traditional justifications for the doctrine, focusing instead on the activities of the business enterprise. In Bushey, a drunken sailor returned to his ship and opened valves that flooded a drydock, damaging both the ship and the drydock. Judge Friendly rejected many of the traditional policy arguments that have been offered in support of respondeat superior liability. Id. at 170-71. He noted that even though the drunken sailor was not motivated by a purpose to serve his employer, respondeat superior liability was proper. This liability rested on the fact that the business enterprise cannot justly disclaim responsibility for accidents which may be fairly said to be characteristic of its activities and that the sailor's conduct was not so unforeseeable as to make it unfair to charge the government with responsibility. Id. at 171 (internal quotation marks omitted).