The client sued the law firm over the stolen funds, alleging among other legal claims that the law firm was negligent in hiring the administrator in the first place. The client claimed that if the law firm had done the appropriate background check on the employee prior to hiring him, it would have discovered that he and his family had several unsatisfied monetary judgments against them. Therefore, the employee should not have been entrusted with a position that entailed handling large sums of client money and the law firm was negligent in bringing him on board. The law firm countered that it had no reason to suspect that the employee would end up being a thief, and therefore, the firm was not negligent in hiring him.
A federal judge in Alexandria recently dismissed the client’s negligent hiring claim against the law firm. The judge stated that, in Virginia, the test for negligent hiring is whether the employee has negligently placed an unfit person in an employment situation that could cause unreasonable risk of harm to others. The judge concluded that even if the administrator had money troubles in his past, causing financial harm to others is not enough to raise a claim for negligent hiring. There must be actual physical injuries inflicted by an employee before an employer can be held liable for negligent hiring. It should be noted that the client made several other legal claims against the law firm related to the theft, and some of those claims are still pending.
Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.
