Safe Harbor

As if it weren't bad enough to have someone "go postal" at your workplace, you can be held liable for the injury and death.

Just after Christmas, a programmer at Edgewater Technology, an Internet consulting firm in Wakefield, Massachusetts, grabbed three guns, strode down the hall and shot seven co-workers. Two weeks later, an angry convenience store owner in Houston showed up at Amko Trading, one of his wholesalers, and shot the couple who owned it, their daughter and himself. All four died.

The scenario is frighteningly common. The Bureau of Labor Statistics reports more than 1,000 homicides in American workplaces occurred from 1992 to 1996. During the same time period, according to the U.S. Department of Justice, 2 million American workers per year were victimized while working. That in itself is worrisome for employers, whether they become targets themselves or have to cope with repercussions and remorse if an employee or customer is injured or killed. But then there's the legal side. When there's violence in the workplace, employers can be held liable for failing to screen job applicants carefully enough, failing to recognize problem employees and take action, or failing to maintain adequate security.

Consider a North Carolina case decided in May 1999. Four years earlier, ex-employee James Davis returned to a warehouse/manufacturing plant owned by Union Butterfield Corp. and Dormer Tools Inc. and started shooting. He murdered three em-ployees and wounded another. An Asheville County jury ordered the companies to pay $7.9 million to the families of two of the dead employees for failing to protect the workers. Although employees had told the man-agers of both companies that they thought Davis would return to murder people, the managers determined that he posed no significant threat and elected not to hire armed security guards for protection. After discussing the possible danger, they decided to simply lock the front door and tell the receptionist to keep an eye out for him-but no one ever relayed even that message.

The Union Butterfield case is unusual in that families of employees were able to recover damages in a civil suit. Normally, employees receive only workers' compensation for workplace injuries, whether accidental or criminal. Because two employers shared management of the same facility, the attorneys could hold one company liable for the death of employees at the other. In other cases, the injured employee would have to show that the employer intentionally ignored a known risk, or would have to go after another potentially liable party, such as a franchisor, landlord or property manager.

What if an employee injures or kills a customer, passerby or other third party? For instance, suppose a business sends a carpet cleaner to a private home and the man rapes the customer. Mark E. Brossman, an employment attorney with Schulte, Roth & Zabel in New York City, notes that, in the past, the law would not have held the employer liable because the employee acted outside the scope of his duty. But over the years, there's been a strong move to make employers more responsible, Brossman says. OSHA requires employers to maintain safe workplaces, and several states have similar statutes. Employers who knew or should have known there was danger yet did nothing to prevent it can be held liable. Likewise, courts are much more likely these days to hold companies liable for negligent hiring or retention of employees.

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This article was originally published in the April 2001 print edition of Entrepreneur with the headline: Safe Harbor.

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