Opinion ID: 8414582
Heading Depth: 2
Heading Rank: 2

Heading: On the Employer’s Premises

Text: The Restatement (Second) of Torts provides that employers have “a duty to exercise reasonable care” to control employees who are acting outside the scope of their employment if the employees are on the employers’ premises or using the employers’ chattels. Restatement (Second) of Torts § 317(a) (Am. Law Inst. 1965). (As examples of chattels that could be used in such torts, consider motor vehicles, power tools, or weapons.) Illinois has adopted that rule and has used it to limit employers’ liability for negligent hiring, supervision, or retention. See O’Rourke, 385 Ill.Dec. 782, 19 N.E.3d at 721, citing Hills v. Bridgeview Little League Ass’n, 195 Ill.2d 210, 253 Ill.Dec. 632, 745 N.E.2d 1166, 1179 (2000); Escobar v. Madsen Construction Co., 226 Ill.App.3d 92, 168 Ill.Dec. 238, 589 N.E.2d 638, 639-40 (1992) (explaining that cases holding employers liable for negligent hiring and supervision “fall within the purview” of § 317). The requirement is intended not to be arbitrary or formalistic but to limit recovery to injuries which “occurred by virtue of the servant’s employment.” Doe v. Boy Scouts of America, 378 Ill.Dec. 667, 4 N.E.3d 550, 561 (2014), quoting Carter v. Skokie Valley Detective Agency, Ltd., 256 Ill.App.3d 77, 195 Ill.Dec. 138, 628 N.E.2d 602, 604 (1993). In particular, Illinois applies this rule to avoid holding an employer liable simply because the tortfeasor and the victim know each other through work. See MacDonald v. Hinton, 361 Ill.App.3d 378, 297 Ill.Dec. 162, 836 N.E.2d 893, 901-02 (2005) (premises requirement not met where murderer befriended victim through work); see also Carter, 195 Ill.Dec. 138, 628 N.E.2d at 605-06 (murderer’s negligent employment not the cause of victim’s death, even though victim let him into her car because “she trusted him because she knew him from work”). In Escobar, for example, the defendant employed as a foreman a carpenter with a history of verbal abuse and violent confrontation, both on and off the defendant’s worksites. 168 Ill.Dec. 238, 589 N.E.2d at 638. One night, the carpenter got into a fight with a co-worker in a bar; the next morning, he shot the co-worker. Id., 168 Ill.Dec. 238, 589 N.E.2d at 638-39. The Illinois appellate court affirmed summary judgment for the employer, reasoning that the employment and the assault were not sufficiently connected. Id., 168 Ill.Dec. 238, 589 N.E.2d at 639. The tortfeasor “was not on Madsen’s job site, not doing Madsen’s work, and not using Madsen’s gun.” Id., 168 Ill.Dec. 238, 589 N.E.2d at 640. The employment only “provided a condition” for the attack. Id., 168 Ill.Dec. 238, 589 N.E.2d at 639. Cooper was not on the defendants’ premises when he killed Alisha, nor did he use their chattels. But he used something else the defendants gave him: supervisory authority over Alisha. He threatened to fire her or reduce her hours if she did not go with him to his sister’s wedding. Am. Compl. ¶¶ 49-50. He thus threatened to take what the Supreme Court calls “tangible employment actions.” Ellerth, 524 U.S. at 761, 118 S.Ct. 2257. He could do that only because the defendants made him Alisha’s supervisor. See id. at 762, 118 S.Ct. 2257 (“Tangible employment actions fall within the special province of the supervisor.”). We believe that § 317(a) should be satisfied by a tortfeasor’s use of supervisory authority. We predict that the Illinois Supreme Court would agree, for two reasons: because supervisory authority is in this respect analogous to a chattel, and because other grounds support holding employers liable in tort for misuse of supervisory power.
We see no principled reason to hold employers liable for the tortious abuse of their chattels but not for the tortious abuse of supervisory authority. Defendants’ argument asks us to predict that Illinois courts would treat entrustment with keys or with a truck as more serious than entrustment with control over others’ livelihoods. Cf. Carter, 195 Ill.Dec. 138, 628 N.E.2d at 605 (claim for willful and wanton hiring supported where security guard used his passkey to enter plaintiffs apartment and assault her), discussing Easley v. Apollo Detective Agency, Inc., 69 Ill.App.3d 920, 26 Ill.Dec. 313, 387 N.E.2d 1241, 1243 (1979); Malorney v. B & L Motor Freight, Inc., 146 Ill.App.3d 265, 100 Ill.Dec. 21, 496 N.E.2d 1086, 1088-89 (1986) (question of fact for the jury existed in negligent hiring case, where employer equipped driver with truck in which he raped hitchhiker). Formalistic adherence to the literal terms of § 317(a) would also produce odd, even arbitrary, results. In Kigin v. Woodmen of the World Ins. Co., 185 Ill.App.3d 400, 133 Ill.Dec. 524, 541 N.E.2d 735, 737 (1989), for example, an Illinois appellate court held that the plaintiff stated a claim against the operator of a youth camp for the actions of a camp counselor. The counselor, a 41-year-old man, gave alcohol to a 15-year-old female camper, took her to a remote area of the campground, and sexually molested her. Id., 133 Ill.Dec. 524, 541 N.E.2d at 736. The Kigin court noted that the attack took place on the defendant’s premises, bringing it within the terms of § 317(a). Id. We think it unlikely that the result would have been different if the attacker had taken his victim across the property line of the campground. The employer knew that the counselor had gone “off into the woods at 11:30 at night alone with [a] 15-year-old girl[] after plying” her with alcohol. Id., 133 Ill.Dec. 524, 541 N.E.2d at 737. The employer’s obligation to act on that information surely does not change depending on whether the counsel- or crossed a property line when he took his victim away. Both entrustment with a chattel and entrustment with supervisory authority set employees apart from the general public. Both can enable tortious conduct. In both situations, employers have the ability and incentive to consider and monitor the employees whom they are trusting and how that trust is used. Injuries caused by using a chattel and injuries caused by abusing supervisory authority both occur “by virtue of the [tortfeasor’s] employment,” and not because the tortfeasor and victim merely know each other through their work. Doe, 378 Ill.Dec. 667, 4 N.E.3d at 561.
Principals can often be held liable for the misuse of authority they delegate, whether or not they are negligent. Restatement (Second) of Agency § 219(2)(d) (Am. Law Inst. 1957) (“A master is not subject to liability for the torts of his servants acting outside the scope of their employment, unless ... the servant purported to 'act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation.”). Such vicarious liability rules have traditionally been confined to cases where the employee acts within the scope of his employment or purports to act on the principal’s behalf. See Restatement (Second) of Agency § 219 cmt. a (Am. Law Inst. 1957) (“The conception of the master’s liability to third persons appears to be an outgrowth of the idea that within the time of service, the master can exercise control over the physical activities of the servant.”). But more recently, the law has moved toward holding employers vicariously liable for their supervisory employee’s intentional torts committed outside the scope of their employment but by abusing their supervisory authority, subject to an affirmative defense. The shift can be seen in the Supreme Court’s decision in Burlington Industries, Inc. v. Ellerth, 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998). The issue was whether and how an employer can be vicariously liable under Title VII of the Civil Rights Act of 1964 for supervisors’ sexual harassment of their subordinates. Id. at 754, 118 S.Ct. 2257. The Supreme Court answered those questions by applying the last clause of the Restatement (Second) of Agency § 219(2)(d), holding masters liable for their servants’ torts when the servants are “aided in accomplishing the tort by the existence of the agency relation.” Id. at 759-60, 118 S.Ct. 2257. The Court explained that a supervisor is “beyond question” aided by the agency relation when he takes tangible employment action against a subordinate. Id. at 760, 118 S.Ct. 2257. A tangible employment action is “a significant change in employment status,” such as firing or reduced hours and compensation. Id. at 761, 118 S.Ct. 2257, citing Crady v. Liberty Nat’l Bank & Trust Co., 993 F.2d 132, 136 (7th Cir. 1993) (“A materially adverse change might be indicated by a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits, significantly diminished material responsibilities, or other indices that might be unique to a particular situation.”). If a supervisor takes tangible employment action against an employee, the employer is vicariously liable. Id. at 762-68, 118 S.Ct. 2257. But what if the supervisor only threatens to take tangible employment action but does not actually take it because the threat has worked? Ellerth answered that question by adopting a two-step holding: an employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with authority over the employee. However, if no tangible employment action is taken, an employer may raise an affirmative defense by proving both that the employer exercised reasonable care to prevent and corrected promptly any sexually harassing behavior, and that the employee unreasonably failed to take advantage of preventive or corrective opportunities provided by the employer or to avoid harm otherwise. 524 U.S. at 765, 118 S.Ct. 2257. Ellerth drew on general principles of agency and tort law to interpret a federal statute, Title VII. That development of the law was then made more general in the Restatement of Employment Law, which applies the Ellerth framework beyond the sexual harassment context to intentional torts committed “by the tortious abuse or threatened abuse of a supervisory or managerial employee’s authority.” Restatement of Employment Law §§ 4.03(c) & 4.06 (Am. Law Inst. 2015). Thus expanded to the more general tort and agency law that was itself the foundation of Ellerth, the Ellerth framework fits the facts alleged in the complaint here. Cooper’s threats to fire Alisha or cut her hours were exactly what the Ellerth court addressed: threats to take tangible employment actions that were not carried out, because the threat worked. Under the principles of the Restatement of Employment Law, Anicich would be able to pursue a claim under §§ 4.03 and 4.06. There is good reason to think that the Illinois Supreme Court would adopt those principles. It has already adopted § 219 of the Restatement (Second) of Agency, which lies at the root of the Ellerth framework. See Wright v. City of Danville, 174 Ill.2d 391, 221 Ill.Dec. 203, 675 N.E.2d 110, 118 (1996) (citing § 219). And that court often looks to the Restatements of the Law for advice and guidance. See Hudson v. City of Chicago, 228 Ill.2d 462, 321 Ill.Dec. 306, 889 N.E.2d 210, 216 (2008) (“This court then adopted the exceptions to claim-splitting set forth in section 26(1) of the Restatement (Second) of Judgments (1982).”); Olson v. Etheridge, 177 Ill.2d 396, 226 Ill.Dec. 780, 686 N.E.2d 563, 569 (1997) (“[W]e hereby adopt the vesting rule set forth in section 311 of the Second Restatement [of Contracts].”); Cult Awareness Network v. Church of Scientology International, 177 Ill.2d 267, 226 Ill.Dec. 604, 685 N.E.2d 1347, 1353 (1997) (“We regard the Restatement [ (Second) of Torts]’s treatment of the favorable termination requirement as more balanced than our appellate court’s interpretation.”). It might find the Restatement of Employment Law persuasive. But we need not and do not hold here that the Illinois Supreme Court would adopt that framework. The Ellerth vicarious liability framework is harder on employers than Illinois’s traditional negligent retention tort. For example, it places the burden on employers to show non-negligence rather than on plaintiffs to show negligence, and it applies whether or not the employer should have known that the supervisor was unfit for his position. We discuss it to show that our holding is (1) part of a broader trend toward recognizing employer liability for supervisors’ intentional torts committed outside the scope of employment; and (2) only an incremental shift, when there are good grounds to go much further. We confine ourselves to predicting that intentional torts committed by the abuse of a supervisory employee’s authority satisfy the requirements of the Restatement (Second) of Torts § 317(a), and thus that Anicich’s complaint states a claim for negligent hiring, supervision, or retention.