Haverly v. Kaytec, Inc.

Annotate this Case

Haverly v. Kaytec, Inc. (96-430); 169 Vt. 350; 738 A.2d 86

[Filed 18-Jun-1999]

NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.

No. 96-430

Philip Haverly Supreme Court

On Appeal from
v. Franklin Superior Court

Kaytec, Inc. December Term, 1997

Linda Levitt, J.

Catherine Roberts-Suskin of Suskin & Roberts-Suskin, P.C. for
Plaintiff-Appellant.

Mark H. Scribner of Carroll & Scribner, Burlington, for
Defendant-Appellee.

Brooke Pearson, Montpelier for Amicus Curiae Department of Employment
and Training.

PRESENT: Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

SKOGLUND, J. Plaintiff Philip Haverly appeals from a jury verdict for
defendant Kaytec, Inc., claiming that the court erred by (1) admitting in
evidence a statement made by him in an application for unemployment
benefits, (2) denying a motion to amend his negligent supervision
complaint, and (3) granting defendant's motion for judgment as a matter of
law on plaintiff's negligent supervision claim. We affirm.

In April 1992, defendant hired plaintiff to work as an electrician's
assistant in its Richford facility. Soon after starting the job,
plaintiff complained to management about vapors and noise levels in the
plant and subsequently filed a complaint with the Vermont Occupational
Safety and Health Office (VOSHA). VOSHA sent an investigator, who
discovered violations of its regulations. After the VOSHA inspection,
plaintiff claimed that in retaliation for filing the complaint, his
co-workers and supervisors began to harass, intimidate, and threaten him,
and that these incidents frightened him to such an extent that he could no
longer work for Kaytec.

He left his job in October 1992.

Plaintiff filed this suit in October 1994, alleging he was
constructively discharged in retaliation for calling VOSHA. Plaintiff
pleaded two claims for recovery: (1) Kaytec violated 21 V.S.A. § 231 by
discriminating and retaliating against him for complaining about work place
health and safety regulations, and (2) Kaytec negligently failed to prevent
its employees from violating 21 V.S.A. § 231.

Plaintiff first argues that the court violated 21 V.S.A. § 1314(d)(1)
by admitting into evidence a statement made by him to the Vermont
Department of Employment and Training a year after he left Kaytec. The
statement was made in support of an application for unemployment benefits
from his subsequent employer, Electronic Hospital. In the statement,
plaintiff referred to his job at Kaytec as a "good paying and secure job
with . . . many benefits." Plaintiff claims that the statement was a
privileged communication under the statute, and was therefore
inadmissible.

Section 1314(d)(1) provides in relevant part:

Except as otherwise provided in this chapter, information obtained from
any employing unit or individual in the administration of this chapter,
and determinations as to the benefit rights of any individual shall be
held confidential and shall not be disclosed or open to public inspection
in any manner revealing the individual's or employing unit's identity,
nor be admissible in evidence in any action or proceeding other than one
arising out of this chapter. . . .

21 V.S.A. § 1314(d)(1) (emphasis added). The purpose behind this section
is to encourage full, free and honest reporting to the Vermont Department
of Employment and Training by protecting the identities and statements of
both employers and employees. Cf. Hinojosa v. Joslyn Corp., 635 N.E.2d 546, 547 (Ill. App. 1994) (state laws prohibiting disclosure of
unemployment compensation are meant to advance the administration of
unemployment compensation laws by encouraging complete and accurate
reporting from claimants and their employers); Simpson v. Oil Transfer
Corp., 75 F. Supp. 819, 822 (N.D.N.Y. 1948) (law may only be properly

administered when interpreted so as to encourage full, free and truthful
reports from both employer and employee).

Plaintiff cites to cases from other jurisdictions enforcing the
confidentiality of unemployment information. These cases, unlike this
case, involved either former employees or employers as defendants in
litigation, who used the privilege as a shield against civil and criminal
liability. See id. (holding that statements cannot be used as basis for an
action for libel); Goggins v. Hoddes, 265 A.2d 303 (D.C. 1970) (action for
libel); Hinojosa, 635 N.E.2d at 547 (confirming that privilege applies to
defendant employers as well as employees); People v. Ellis, 470 N.E.2d 524, 526 (Ill. App. 1984) (holding that statements cannot be used as basis
for criminal liability); Ohio Civil Rights Comm'n v. Campbell, 345 N.E.2d 438, 440-42 (Ohio App. 1975) (holding that statements cannot be used in
support of civil rights charges).

Here, plaintiff is not using the privilege as a defense to a civil or
criminal charge, but as a means of precluding relevant evidence from being
introduced in a proceeding initiated by him. To hold that such statements
are protected under this situation would do nothing to further the purpose
of full, free and honest reporting, but might enable litigants to unfairly
secure more than they deserve by bringing collateral litigation. We hold
that by bringing this action and putting his reasons for leaving Kaytec at
issue, plaintiff waived any protection he may have had under 12 V.S.A. §
1314(d)(1) with respect to statements made by him to the Vermont Department
of Employment and Training. See Mattison v. Poulen, 134 Vt. 158, 163, 353 A.2d 327, 329-30 (1976) (applying same principle to doctor/patient
privilege under 12 V.S.A. § 1612). Plaintiff cannot in one breath claim
protection from disclosure under 12 V.S.A. § 1314(d)(1) and in another
bring an action for damages putting the content of those statements
directly at issue. To do so would be to make the privilege not merely a
shield, but a sword as well. See State v. Valley, 153 Vt. 380, 395, 571 A.2d 579, 586-87 (1989).

II.

Plaintiff's final two arguments both pertain to his negligence claim.
On the first day of

trial, defendant brought a motion for judgment on the pleadings under
V.R.C.P. 12(b)(6), requesting that the court dismiss plaintiff's
negligence claim for failing to state a valid claim. Defendant argued
that the Vermont Occupational Health and Safety Act preempted any common
law right of action, including negligence, for "whistleblowing." Plaintiff
contended that the negligent supervision claim was a tort claim, and not
brought under VOSHA. Plaintiff did not elucidate how the negligent
supervision claim was based on the common law. The court deferred ruling
on defendant's motion to dismiss.

Midway through trial, the court sought clarification of plaintiff's
negligent supervision claim. After reviewing plaintiff's pleadings and
requests for jury instructions, the court expressed its understanding that
the negligent supervision action was based on an intentional or
constructive discharge or discrimination claim, i.e., that management
wrongfully allowed a violation of the VOSHA statute to occur. Counsel for
plaintiff initially agreed with the court's description of the claim and
stated that the negligent supervision "caused discrimination or discharge."
The court, however, indicated that if the tort of negligent supervision
was being raised, plaintiff must produce evidence of a wrong done to him
that was different than the statutory violation alleged in Count I of his
complaint. Plaintiff then pointed to evidence of verbal and physical
abuse.(FN1) The court reminded counsel that verbal abuse is not a tort and
that

assault was not raised in plaintiff's complaint. The trial continued.

At the close of plaintiff's case, defendant reasserted its argument
regarding plaintiff's negligence claim in a motion for judgment as a
matter of law under V.R.C.P. 50(a). Plaintiff responded with a motion
under V.R.C.P. 15(b) to amend the complaint to allege a battering by his
supervisors, that the employer negligently allowed to happen. Defendant
objected.

Plaintiff did not seek to amend the allegations that comprised Count
II of the complaint but merely sought to add an averment to the body of
the complaint claiming a battery. At trial, plaintiff's testimony
concerning the offensive touching was as follows. With regard to the
incident that occurred when plaintiff went into his supervisor's office to
get ear plugs, plaintiff testified that the supervisor "came right towards
me and he bumped me in the chest against the door that was right behind
me. I reached up to the file cabinet, grabbed a handful of ear plugs and
left." Plaintiff further testified that "it wasn't painful or anything,
but it was scary." The second incident with this supervisor happened when
plaintiff went to open a garage door for ventilation. He testified that
the supervisor "put his hand on my shoulder, pushing me away." Plaintiff
made no claim of harm resulting from this incident. Finally, plaintiff
claimed that another supervisory employee "raised his hand at me" after
plaintiff continued to re-open a garage door for ventilation that the
other employee apparently wanted closed because of the cold weather. In
this instance, there was no claim of any contact between the two men and no
claim of any harm resulting.

In assessing plaintiff's motion to amend under V.R.C.P. 15(b), the
court reasoned that, because the amendment came so late in the
proceedings, it was unfair to require defendant to shift focus and defend
a new claim for negligent supervision based on a battery. Further, the
court opined that plaintiff had failed to prove that defendant knew or
should have known about

the violent propensities of the supervisor.(FN2) The court simultaneously
denied plaintiff's motion to amend and granted defendant's motion for
judgment as a matter of law on the negligent supervision claim as pleaded.

A denial of a motion to amend pleadings under V.R.C.P. 15 is reviewed
only for an abuse of discretion. See Brown v. Whitcomb, 150 Vt. 106,
108-09, 550 A.2d 1, 3 (1988). Under V.R.C.P. 15 (b), issues not raised by
pleadings, but tried with the implied consent of the parties, are treated
as if they had been raised by the pleadings. See V.R.C.P. 15(b). We have
previously stated that, in order to find implied consent to an unpleaded
issue, it must appear that both parties understood that evidence was
introduced to prove the unpleaded issue. See Vineyard Brands, Inc. v. Oak
Knoll Cellar, 155 Vt. 473, 485, 587 A.2d 77, 83-84 (1990); 6A C. Wright,
A. Miller, & M. Kane, Federal Practice and Procedure § 1493, at 19-20
(1990) (implied consent seems to depend on whether parties recognize that
issue not presented by pleadings entered case at trial; if not, there is no
consent and amendment not allowed).

A review of the record indicates that defendant did not interpret, nor
should it reasonably have interpreted, plaintiff's Count II to set forth a
claim of negligent supervision by defendant of its supervisors on the
basis of battery. During the presentation of his case at trial, plaintiff
continued to assert that the negligent supervision claim resulted in
discrimination, not a touching. In response to plaintiff's motion to
amend, defendant argued that if, in fact, plaintiff had tried the claim of
negligent supervision outside the context of 21 V.S.A. § 231 during trial,
a claim

based on a battery, defendant would have retained experts and called
witnesses to assess whether plaintiff had suffered any emotional or
physical harm. Further, even with the offered amendment to include a
battery, defendant credibly professed confusion as to what plaintiff was
pleading in Count II.

Under the circumstances, defendant did not impliedly consent to try
the claim of negligent supervision resulting in a battery. The mere
mention in the complaint of some of the alleged retaliatory actions of the
co-workers that plaintiff claimed resulted in a constructive discharge was
insufficient to put defendant on notice that the claim of negligent
supervision was based on anything other than a violation of 21 V.S.A. §
231. Given the early notice by the court of the tenuous validity of Count
II, plaintiff's continuing reliance on a claim of discrimination as the
basis of Count II, the timing of the motion to amend, and the fact that
only with the motion to amend did plaintiff clearly articulate a claim for
negligent supervision based on a resulting battery, it was not an abuse of
discretion to deny the motion to amend the complaint.

III.

Plaintiff next contends that the court erred in granting defendant's
motion for judgment as a matter of law on plaintiff's negligent
supervision claim.

A claim of negligent supervision is addressed by § 213 of the
Restatement (Second) of Agency, which provides:

A person conducting an activity through servants or other agents is
subject to liability for harm resulting from his conduct if he is
negligent or reckless . . . in the employment of improper persons or
instrumentalities in work involving risk of harm to others: in the
supervision of the activity; or . . . in permitting, or failing to
prevent, negligent or other tortious conduct by persons, whether or not
his servants or agents, upon premises or with instrumentalities under
his control.

Restatement (Second) of Agency § 213 (1958). Pursuant to § 213, liability
exists only if all the requirements of an action of tort for negligence
exist. See Brueckner v. Norwich Univ., 10 Vt. L.W. 33, 35 (1999). In the
case at bar, plaintiff had to prove that: (1) the employer had a duty to
forbid or prevent negligent or other tortious conduct by persons upon its
premises; (2) the

employer breached that duty; (3) such a breach was the proximate cause of
plaintiff's injury; and (4) there was actual loss or damage as a result of
the injury.

Thus, the tort of negligent supervision must include as an element an
underlying tort or wrongful act committed by the employee. A wrongful act
may well be a tort, but not necessarily. If the act of the employee is
contrary to a fundamental and well-defined public policy as evidenced by
existing statutory law, it is sufficient to sustain the cause of action.
See Miller v. Wal-Mart Stores, Inc. 580 N.W.2d 233, 239 (Wis. 1998). In
the case at bar, based on the pleadings, the wrongful act underlying the
claim of negligent supervision is discrimination and retaliation resulting
in constructive discharge. Like the trial judge, we fail to see a
distinction between Count I and Count II.

In Count I, plaintiff claimed that the actions of defendant, by and
through the actions of the co-workers, were in retaliation for plaintiff's
protected activities and thus a violation of 21 V.S.A. § 231(a). In
Count II, plaintiff alleged that the employer had a duty to comply with the
health and safety laws of the State of Vermont, including the prohibition
against discrimination of an employee who files a VOSHA complaint, and
that the employer breached that duty by failing to supervise its employees
to prevent "the abusive, hostile and discriminatory conduct of its
employees towards Plaintiff specified in Count I above." As a result of
"the negligence and discriminatory conduct of the Defendant," plaintiff
claimed damages, "including loss of back and front pay, lost employment
opportunities, pain and suffering, emotional and physical distress,
anguish and anxiety." Thus, plaintiff's claim in Count II is that Kaytec
negligently failed to supervise its employees who retaliated against
plaintiff for making a complaint to VOSHA, causing plaintiff to be
constructively discharged and suffer damages.

The trial court ruled that, without an amendment to the cause of
action in Count II alleging negligent supervision resulting in a battery,
Count I -- wherein plaintiff claimed that defendant discriminated against
him in violation of 21 V.S.A. § 231(a) -- subsumed Count II. We agree.
Because Count II presented the same claim of discrimination as set forth in
Count I,

it was not error for the court to grant judgment as a matter of law on
Count II . See V.R.C.P. 50(a) (court may grant motion for judgment as a
matter of law against party if claim cannot be maintained under
controlling law.)

Nor was the claim of damages, including "pain and suffering, emotional
and physical distress, anguish and anxiety," sufficient to infuse Count II
with an action premised upon a battery. First, the court agreed that
damages for emotional distress were available to plaintiff under Count I,
and so charged the jury. Second, as noted above, there was no evidence of
any pain or suffering, physical or emotional, as a result of any physical
battery against plaintiff. Plaintiff's testimony of alleged retaliatory
actions taken against him by co-workers focused primarily on numerous
incidents of ostracism, verbal abuse and ridicule. The alleged batteries
were obviously not the factual centerpiece of the claim for relief for
constructive discharge under 21 V.S.A. § 231. Viewing the evidence as a
whole, the incidents of offensive touching were offered to support the
claim of discrimination, not as evidence of a battery.

The complaint did not plead, nor did the evidence support, a claim of
negligent supervision based on an underlying tort of battery. There was
only one cause of action properly pleaded and actually litigated, and it
was described in Count I.

Affirmed.

FOR THE COURT:

_______________________________________
Associate Justice

------------------------------------------------------------------------------
Footnotes

FN1. At the bench conference, the trial judge stated: "I just want to
discuss the negligence count. The way I have it . . . the count would be
negligently supervising, that the defendant negligently supervised
management who intentionally constructively discharged or discriminated
against the plaintiff. I don't like the way that sounds. . . . [I]t's
putting a negligence layer on top of an intentional layer and . . . why
don't we just simply get around that by saying that anything that
management did is attributable to the defendant. . . . You seem to be
implying that there was negligent supervision in that management allowed a
violation of the statute." She went on in a dialogue with plaintiff's
counsel to state "[Y]ou said negligent supervision but then you need to
have a wrong. Okay. So you negligently supervise. Then what happens?"
Plaintiff's counsel replied: "That negligent supervision caused
discrimination . . . or discharge . . ." To which the court replied
"Right. Caused a violation of statute. . . ." Finally, plaintiff's counsel
attempted to broaden the alleged wrong by claiming that "management
allowed . . . them to run roughshod" and mentions the physical and verbal
abuse.

FN2. The dissent analyzes the trial court ruling on lack of employer
knowledge of the supervisor's violent propensities under § 317 of the
Restatement (Second) of Torts and suggests that § 317 is inapplicable to
the situation. We agree and therefore do not address it. Instead, we
analyze the trial court's ruling under § 213 of the Restatement (Second) of
Agency and note that while § 213 contains no explicit knowledge
requirement, the principal may be negligent if he has reason to know that
the servant or other agent, because of his qualities, including
incompetence because of his reckless or vicious disposition, is likely to
harm others in view of the work or instrumentalities entrusted to him.
See Restatement (Second) of Agency § 213 cmt. d (1958). This distinction
is of no great moment under our view of the case. We see the issue to be
not what constitutes a valid claim of negligent supervision, but rather
whether a claim of negligent supervision based on an alleged battery was
pleaded and tried by plaintiff.

------------------------------------------------------------------------------
Dissenting

No. 96-430

Philip Haverly Supreme Court

On Appeal from
v. Franklin Superior Court

Kaytec, Inc. December Term, 1997

Linda Levitt, J.

Catherine Roberts-Suskin of Suskin & Roberts-Suskin, P.C. for
Plaintiff-Appellant.

Mark H. Scribner of Carroll & Scribner, Burlington, for
Defendant-Appellee.

Brooke Pearson, Montpelier for Amicus Curiae Department of Employment
and Training.

PRESENT: Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

JOHNSON, J., dissenting. Today the majority affirms a decision of the
trial court that an employee assaulted in the workplace by his supervisor
cannot sustain a claim of negligent supervision because the corporate
employer purportedly did not know of the supervisor's propensity for
misconduct. The trial court's decision flies in the face of both the facts
and the law. The majority avoids engaging with the trial court's
reasoning by raising a red herring: the supposed inability of plaintiff to
amend his complaint to include particular allegations of battery.
Plaintiff did not need to amend his complaint, however, to have his claim
presented to the jury, and the trial court's rationale for not allowing
the claim to go to the jury was error. Therefore, I respectfully dissent.

The majority affirms the trial court's decision to grant judgment as a
matter of law on plaintiff's negligent supervision claim, reasoning that
(1) plaintiff's motion to amend his complaint

came so late in the proceedings that to grant it would have unfairly
prejudiced defendant and (2) plaintiff did not plead or present evidence
to support a claim of negligent supervision based on the torts of assault
and battery. The result reached by the majority is contradicted by both
the facts and the law relevant to this case. First, whether plaintiff was
permitted to amend his complaint is irrelevant to the question of whether
plaintiff's negligent supervision claim should have been disposed of as a
matter of law. Second, contrary to the conclusions of the trial court,
plaintiff did present evidence that defendant was aware of the assailant's
propensity for violence, and this evidence was sufficient to allow
consideration of his negligent supervision claim by the jury. Plaintiff
presented evidence that the vice-president of Kaytec had received numerous
complaints about the assailant's behavior. Plaintiff also presented
evidence that supervisory employees were aware of the assailant's
ill-temper, and their knowledge is imputed to the employer, defendant
Kaytec. Third, in a cause of action based on negligent supervision, a
plaintiff is not required to show that an employer had knowledge of an
employee's propensity for misconduct; rather, a plaintiff may show that an
employer was negligent in its duty to supervise the workplace. The trial
court erred in applying the knowledge requirement.

The complaint amendment issue, focused on by the majority, is a red
herring that does not resolve this appeal or even help its resolution.
The amendment, whether granted or not, is irrelevant to whether the case
should have reached the jury on a negligent supervision theory.

The complaint allegations at the center of this appeal stated:

27. Defendant negligently failed to supervise its employees to
prevent or to take such action to stop the abusive, hostile and
discriminatory conduct of its employees toward plaintiff . . .

28. As a result of the negligence and discriminatory conduct of the
defendant, plaintiff suffered damages including loss of back and
front pay, lost employment opportunities, pain and suffering,
emotional and physical distress, anguish and anxiety.

Defendant never attempted to amend, expand or supplement this
allegation. The complaint

amendment focused on by the majority related solely to the statement
of alleged facts that opens the complaint before the specific counts that
contain the claims for relief. Included in these factual statements are
allegations that plaintiff's supervisor, Duane Jewett, ridiculed and
humiliated plaintiff, that Jewett physically threatened plaintiff by
raising a closed fist and screaming in a menacing manner, that Jewett
screamed profanities at plaintiff, and that the production manager
threatened plaintiff. The proposed amendment would have added that on at
least three occasions plaintiff was physically battered by Jewett and the
production manager. By the time that the amendment was proposed, evidence
of battery had already been admitted.

When he framed his complaint for negligent supervision, plaintiff was
obligated to provide "a short and plain statement of the claim showing
that [he] is entitled to relief." V.R.C.P. 8(a). This requirement is "the
very essence of modern notice pleading," Lemnah v. American Breeders
Serv., Inc., 144 Vt. 568, 577, 482 A.2d 700, 705 (1984), and "does not
require a specific and detailed statement of facts constituting the cause
of action. Rather, the test of whether a particular pleading is
sufficient under Rule 8(a) is whether it gives fair notice of the claim and
the grounds upon which it rests," Levinsky v. Diamond, 140 Vt. 595, 600,
442 A.2d 1277, 1280 (1982). In other words, "[s]ufficient detail must be
given so that the defendant, and the court, can obtain a fair idea of what
the plaintiff is complaining, and can see that there is some legal basis
for recovery." Mancini v. Mancini, 136 Vt. 231, 234, 388 A.2d 414, 416
(1978) (citation omitted). To satisfy Rule 8(a), a claim of negligence
should allege the traditional elements of duty, breach, causation and
harm, but they may be pleaded with "simplicity and generality." 5 C.
Wright and A. Miller, Federal Practice and Procedure § 1249, at 227-28
(1969) (construing identical federal rule).

Under notice pleading rules, the addition of another unnecessary
factual allegation cannot make or break a complaint. Here plaintiff
pleaded negligent supervision that failed to prevent abusive and hostile
acts that resulted in pain and suffering. These allegations were certainly
broad enough to cover physical touchings that resulted in pain and
suffering and put defendant on notice

from the outset that plaintiff suffered the kind of injury the evidence
eventually disclosed. The allegations were not limited, as the majority
states, to a negligent supervision claim under the VOSHA statute.
Defendant claims it would have hired experts had it known that plaintiff
claimed to have suffered emotional or physical harm. I find this claim
incredible. From the outset, plaintiff alleged that he suffered such
harm.

If I understand the majority's position, it is that plaintiff failed
to identify the specific tortious conduct committed by the employee which
gave rise to defendant's liability. I find nothing in the letter or
spirit of our notice pleading rules that requires the pleader to identify
specifically the subsidiary tort. Indeed, in this case, plaintiff
identified no employee tort by name; therefore, under the majority's
theory the case should have been dismissed long before the trial. More
importantly, the liability theory relied upon by the trial court does not
require that the employee commit a specific tort. It requires only that
the employee intentionally harm others or conduct himself as to create an
unreasonable risk of bodily harm to others. See Restatement (Second) of
Torts § 317 (1965).

Like the majority, I find no error in the denial of the motion to
amend the complaint, because I believe such a motion was unnecessary. It
was error, however, to fail to allow plaintiff's case on negligent
supervision to go to the jury on the evidence submitted.

II.

Despite the fact that the majority declines to address the substance
of plaintiff's negligent supervision claim, the majority nonetheless
implicitly adopts the second element of the trial court's reasoning: that
defendant could not be found liable for negligent supervision because
plaintiff failed to present evidence that defendant possessed actual or
constructive knowledge of its employee's propensity for misconduct. From
this I must also dissent.

The knowledge of a corporation's supervisory employees is imputed to
the corporation for purposes of finding negligence under Section 317 of
the Restatement (Second) of Torts. See Davis v. United States Steel
Corp., 779 F.2d 209, 212 (4th Cir. 1985) (once supervisor becomes

aware of misconduct, knowledge automatically imputed to employer).
Defendant, as a corporation, cannot possess knowledge itself; rather, a
corporation "knows" only through its agents. It is for this reason that,
in a corporate environment, the knowledge of supervisory employees is
automatically imputed to their employer, the corporation. In the absence
of such a rule, corporations could render themselves frighteningly
unaccountable simply by virtue of willful ignorance and multiple levels of
managerial bureaucracy.

In this case, the fact that the supervisory employees were the
perpetrators does not prevent their knowledge of their own misconduct from
being imputed to the corporation. To hold otherwise, as the trial court
did, is to create an inexplicable gap in liability. Under such a rule,
supervisors who observe the misconduct of non-supervisory employees are
responsible for taking corrective action, see id. (supervisor has
responsibility flowing from employment as supervisor to take action upon
observing harassment of employee by co-employee), but when the supervisors
commit the misconduct themselves, the law ignores the wrongdoing that has
occurred. This creates a perverse scheme in which an employer is least
responsible for monitoring the conduct of those persons who have the most
power over other employees.

It is obvious that supervisors engaged in misconduct will have little
incentive to report their own misdeeds. This, however, is not a risk that
should be born by the victim of the misconduct. Rather, the employer, who
chooses to cloak particular individuals in supervisory authority, must
bear the risk of their being ill-suited for the responsibility that
accompanies that authority.

Furthermore, in this case, episodes of the alleged misconduct (and
hence the propensity for such misconduct) were also observed by a
third-party supervisory employee. James Hemond was plaintiff's immediate
supervisor. He observed Jewett bullying employees and threatening
plaintiff in particular. Because Hemond was a supervisory employee, his
knowledge of this behavior is imputed to the corporation. Thus, there was
evidence that defendant Kaytec had knowledge of Jewett's propensity for
misconduct and there was sufficient evidence to proceed to

the jury on the issue of defendant Kaytec's negligence.

The trial court also erred in concluding that plaintiff had to show
that defendant Kaytec was aware of actual incidents of past violence by
Jewett. Under Section 317, knowledge of Jewett's ill-temper was
sufficient to trigger Kaytec's duty. See Bradley v. H.A. Manosh Corp.,
157 Vt. 477, 482, 601 A.2d 978, 982 (1991) (plaintiff need not show that
employer knew of specific past acts of negligence on part of employee,
only a predisposition to careless behavior with respect to
instrumentalities made available to employee by employer).

In addition, plaintiff was not even required to show that Kaytec had
knowledge of its employee's propensity for misconduct to establish a prima
facie case of negligent supervision. The trial court erroneously treats
plaintiff's claim as being exclusively governed by Section 317 of the
Restatement (Second) of Torts, which deals with a master's duty to control
the conduct of a servant when the servant is on the premises of the master
but acting outside the scope of employment. Section 317 requires that the
master know that he or she has the ability to control the servant and that
there is a need for such control. See Restatement (Second) of Torts § 317
(1965).

Plaintiff, however, termed his cause of action "negligent
supervision," which is addressed by Section 213 of the Restatement
(Second) of Agency and is defined as follows:

A person conducting an activity through servants or other agents is
subject to liability for harm resulting from his conduct if he is
negligent or reckless . . . in the supervision of the activity . . . or
. . . in permitting, or failing to prevent, negligent or other tortious
conduct by persons, whether or not his servants or agents, upon
premises or with instrumentalities under his control.

Restatement (Second) of Agency § 213 (1958). In contrast to a cause of
action based on Section 317, negligent supervision contains no explicit
knowledge requirement. Negligent supervision is a form of direct
liability (FN1) stemming from the employer's duty to supervise the
activities of the

workplace in an effective manner. The prerequisites for a negligent
supervision claim are (1) that the defendant conducts an activity through
agents, and (2) that the defendant is negligent or reckless in fulfilling
the supervisory duty. "One who engages in an enterprise is under a duty to
anticipate and to guard against the human traits of his employees which
unless regulated are likely to harm others." § 213 cmt. g. Delegation of
the duty to supervise does not eliminate liability. See § 213 cmt. j.

In this case, Mitchell Coleman, the vice-president of Kaytec,
testified that he was too busy to supervise the goings-on of the factory
floor himself, and so he entrusted Jewett, among others, to be his "eyes
and ears" on the factory floor. This act of delegation did not relieve the
corporation as an entity of its duty to supervise the activities of
workplace effectively. Put another way, a corporation's vice-president
should not be able to eliminate the corporation's duty to supervise simply
by delegating the duty to unqualified, lower-level supervisors. It is both
ironic and unjust that Coleman's negligence in delegating the supervisory
function excuses Kaytec from liability for that negligence, and yet this
is the result the majority reaches today.

Plaintiff did not need to amend his complaint for there to be
sufficient evidence to go to the jury on either the Section 317 or Section
213 theories of liability, and therefore judgment as a matter of law on
plaintiff's negligent supervision claim was error.

I am authorized to state that Justice Dooley joins in this dissent.

_______________________________________
Associate Justice

------------------------------------------------------------------------------
Footnotes

FN1. Negligent supervision is distinct from respondeat superior liability,
though the two may co-exist. See § 213 cmt. h. Because negligent
supervision is not a form of vicarious liability there does not need to be
a finding that the tortfeasor was acting within the scope of employment.
See § 213 cmt. a ("The rule stated in this Section is not based upon any
rule of the law of principal and agent . . . ."). This is made clear by
the fact that negligence may be found in connection with the activities of
persons "whether or not [the employer's] servants or agents" who commit a
tort "upon premises or with instrumentalities under [the employer's]
control." § 213.

Though plaintiff in this case did not argue respondeat superior
liability, evidence was submitted that could have supported this theory of
liability. Acts may be within the scope of employment even if they are
criminal or tortious as long as the conduct is foreseeable. See Restatement
(Second) of Agency § 231 and cmt. a. Additionally, an employer may be found
liable for the unauthorized tortious conduct of an employee if the conduct
is committed in furtherance of the interests of the employer. See § 216
and cmt. a. When a supervisor observes misconduct and does nothing to
correct it, the factfinder may assume that the conduct is not contrary to
the interests of the employer. See Davis, 779 F.2d at 211.

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.