Employer Direct Negligence Actions: Martin, McQueen, and Recent Erosion of the McHaffie Rule

August 1, 2022 • Source: Kristopher M. Gould, Perrier & Lacoste, LLC

May a plaintiff maintain causes of action against an alleged tortfeasor’s employer under both vicarious liability and direct negligence (i.e., negligent hiring, training, supervision, and retention) theories, after the employer stipulates that the alleged tortfeasor was in the course and scope of employment at the time of the subject incident?   

Logic dictates concurrent claims against an employer under direct negligence and vicarious liability theories should not be allowed post-stipulation.  Once an employer stipulates that an alleged tortfeasor employee was in the course and scope of employment at the time of an accident, the employer is liable for all damages caused by the employee’s conduct.  Further, if the alleged tortfeasor employee was not negligent in causing the accident, then no amount of negligence on the part of the employer itself could make the employer liable to the plaintiff.  For example, if an employee brings a company vehicle to a complete stop at a red light and is subsequently rear-ended by a plaintiff, fault should rest with the plaintiff alone.  Allegations that the employer hired an employee with a bad driving record or failed to provide required training to the employee would be irrelevant because those allegedly negligent acts by the employer could not be proximate causes of the rear-end accident.1 

The rule that an employer's admission of vicarious liability for an employee's negligence bars a plaintiff's direct negligence claims against the employer is often referred to as the “McHaffie Rule,” named for the Missouri Supreme Court’s opinion in McHaffie v. Bunch, 891 S.W.2d 822 (Mo. 1995).  Though the McHaffie Rule is a majority view, its support is eroding.  In the past few months, state Supreme Courts in Illinois and Louisiana reached the opposite result, holding plaintiffs may simultaneously pursue direct negligence and vicarious liability claims against employers, despite course and scope stipulations.  See McQueen v. Green, 2022 IL 126666, ____ N.E.3d ____, 2022 WL 1180648; Martin v. Thomas, 2021-01490 (La. 6/1/22), ____ So.3d ____, 2022 WL 2339095.  This new jurisprudence will subject employer defendants to more extensive corporate discovery and “reptile” attacks at trial designed to shift the jury’s focus away from the facts of the accident at issue.   

On June 29, 2022, the Louisiana Supreme Court issued a ruling in Martin v. Thomas, holding a plaintiff can maintain claims against and employer under both vicarious liability and direct negligence theories even if the employer has stipulated to the course and scope of employment.  Martin v. Thomas, 2021-01490 (La. 6/1/22), ____ So.3d ____, 2022 WL 2339095. Though Martin presented an issue of first impression for the Louisiana Supreme Court, the decision rejected a growing consensus across Louisiana’s State Courts of Appeal and its Federal District Courts that simultaneous claims post-stipulation would not be permitted.  The State Supreme Court agreed “an employer can only be liable under theories of negligent hiring, supervision, training and retention, and negligent entrustment if the employee is at fault, and that the employer cannot be liable if the employee is not at fault.”  Id. (emphasis in original).  However, the Court noted, “[t]he possibility that both the employee and employer may be at fault is not thus foreclosed or “subsumed” and “if fault is shown on the part of an employee, then the issue of whether there is fault on the part of the employer remains an open question which must be decided according to the evidence on a case by case basis.”  Id. (emphasis in original).   

Two months earlier, on April 21, 2022, the Illinois Supreme Court issued its ruling in McQueen v. Green, holding “so long as a good-faith factual basis exists for a plaintiff’s claim of direct negligence against an employer, the plaintiff should be allowed to pursue such a claim in addition to a claim of vicarious liability.”  McQueen v. Green, 2022 IL 126666, ____ N.E.3d ____, 2022 WL 1180648, ¶ 43.  The Court reasoned “A potentially meritorious cause of action should not be barred simply because the employer acknowledges vicarious liability for its employee's misconduct in a separate cause of action.”  Id. at ¶ 45.  The Illinois Court went a step farther in McQueen than the Louisiana Court in Martin, holding “a plaintiff may seek to hold an employer responsible for its own misconduct even if the jury finds that its employee is not negligent.”  Id. at ¶ 49 (emphasis added).   

The Martin and McQueen decisions came on the heels of the Colorado General Assembly’s 2021 legislative reversal of the Colorado Supreme Court’s “holding in Ferrer v. Okbamicael, 390 P.3d 836 (Colo. 2017), that an employer's admission of vicarious liability for any negligence of its employees bars a plaintiff's direct negligence claims against the employer.” Colo. Rev. Stat. § 13-21-111.5 (effective 9/7/2021).

To claw back the McHaffie Rule defense where Courts allow simultaneous claims and protect the defense where they are excluded, employers’ counsel should refocus on the public policy arguments favoring application of McHaffie rule.

In McHaffie, the Court emphasized public policy rationale ranging from judicial efficiency, confusion of the issues, and – perhaps most significantly – the danger of unfair prejudice through improper allocation of fault, if a plaintiff were allowed to bring the claims simultaneously post-stipulation. 

Vicarious liability or imputed negligence has been recognized under varying theories, including agency, negligent entrustment of a chattel to an incompetent, conspiracy, the family purpose doctrine, joint enterprise, and ownership liability statutes. If all of the theories for attaching liability to one person for the negligence of another were recognized and all pleaded in one case where the imputation of negligence is admitted, the evidence laboriously submitted to establish other theories serves no real purpose. The energy and time of courts and litigants is unnecessarily expended. In addition, potentially inflammatory evidence comes into the record which is irrelevant to any contested issue in the case.

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it is possible that an employer's negligent hiring or negligent entrustment of a vehicle to an employee would result in assessment of a greater percentage of fault to the employer than is attributable to the employee. That is plainly illogical. It is little wonder that these cases are and properly should remain cited as contrary to “the overwhelming weight of authority.”

McHaffie, 891 S.W.2d at 826, 827 (emphasis added) (citations omitted)

The Court in Ferrer expanded on the risk of improper allocation of fault if the separate theories against employers are allowed to proceed simultaneously.

[T]here is a danger that a jury will assess the employer's liability twice and award duplicative damages to the plaintiff if it hears evidence of both a negligence claim against an employee and direct negligence claims against the employer. This is incompatible with the theory of respondeat superior liability, in which the liability of the employer (upon acknowledgement of a respondeat superior relationship) is fixed by the amount of liability of the employee, and the plaintiff's comparative fault does not differ based on the number of defendants. The McHaffie rule prevents the fault of one party from being assessed twice and thereby avoids a “plainly illogical” result.

Ferrer, 390 P.3d at 845 (citations omitted).

Further, allowing plaintiffs to proceed with direct negligence claims against an employer can be unfairly prejudicial to the alleged employee tortfeasor. The Maryland Court of Appeals provided an example and analysis in Houlihan v. McCall.

When called by the plaintiffs, Houlihan admitted that on November 4, 1948 he was convicted of exceeding fifty miles per hour in one of his employer's trucks, failing to drive in the designated lane, and failing to have his chauffeur's license in his possession. The court declined to strike out his answer. He also testified that he told the plant manager about these convictions. The answer might have some probative force as one of a chain of circumstances tending to prove a habit of recklessness known to the employer, although it was irrelevant to establish negligence at the time of the accident. Where a driver's known incompetence is in issue, the exclusionary rule must yield, no doubt, to the necessity of permitting proof of previous misconduct. But where agency is admitted it can serve no purpose except to inflame the jury.

Houlihan v. McCall, 197 Md. 130, 140, 78 A.2d 661, 666 (1951) (emphasis added).

The U.S. District Court for the District of Columbia reached a similar result in Hacket v. Washington Metropolitan Area Transit Authority, ruling the plaintiff “should not be allowed to proceed on these alternative theories of liability where, as here, agency has been conceded because it would be unfairly prejudicial to the defendant. Hackett v. Washington Metro. Area Transit Auth., 736 F. Supp. 8, 9 (D.D.C. 1990). The Hackett court specifically addressed the admissibility of the employee’s past driving record, noting it would have been admissible to prove negligent entrustment, but would not be admissible to prove a respondeat superior claim and admission of the driving record would be unfairly prejudicial to the employee.

Time will tell if other states following Louisiana, Illinois, and Colorado, in moving away from the McHaffie rule. A focus on public policy issues may hold the key for preventing further erosion of this defense.

1 An exception to this rule should exist for negligent maintenance claims. Consider the same example, but assume the company vehicle did not have working brake lights. The plaintiff may not have stopped in time because the company vehicle’s brake lights did not activate when approaching the traffic light. Under those facts, the employee may be free from fault, but fault could be shared between the plaintiff as the rear-ending motorist and the employer for failing to maintain its vehicle with working brake lights.