Morrisons, vicarious liability & the unexpected risks of employees
Employers’ vicarious liability was a “hot topic” in 2018. In particular, the Court of Appeal decision in Wm Morrison Supermarkets Plc v Various Claimants demonstrated a trend in finding employers liable for the wrongful acts of their employees in circumstances which appeared to be increasingly tangential to their employment. With Morrisons recently receiving permission to appeal to the Supreme Court, we take a look back at what the Court of Appeal decided, and why the upcoming appeal matters for employers.
In this case, the Court of Appeal confirmed that Morrisons was vicariously liable for the acts of a vengeful employee, who retaliated against a minor disciplinary sanction by posting the personal data (including bank details, addresses and salary information) of almost 100,000 Morrisons employees online.
In reaching its decision, the Court of Appeal decided that:
1. the handling of the employee personal data fell squarely within the nature of the employee’s role (as he had been specifically assigned the task of dealing with that data); and
2. the tortious acts remained “within the field of activities assigned to [the employee] by Morrisons” (on the basis that the employee’s wrongful acts (downloading and subsequently distributing the data) all formed part of a “seamless and continuous sequence”).
However, perhaps the most unusual feature in this case is that Morrisons has been held liable for an employee’s acts in circumstances where the primary motivation was to harm Morrisons. By holding Morrisons liable the court has indirectly helped the employee to achieve his aim. Nonetheless, the Court of Appeal maintained that an employee’s motivation is irrelevant to the question of vicarious liability.
It is clear from the Court of Appeal’s judgment that policy arguments in favour of the employees injured by the release of their data influenced its decision. The judgment hints at a desire to make an effective remedy available to the injured employees, and expressly points to insurance as a way for employers to manage the risk of destructive employees.
This case does not expand the tests for establishing vicarious liability. However, it does demonstrate the broad interpretation that the courts are prepared to give to those tests. Whilst insurance is hardly a perfect solution, it is certainly an avenue for employers to consider. Employers can also take some comfort from the unusual facts in this particular case – we suspect that most employees will not respond to a verbal warning by exposing themselves to an 8 year prison sentence!
Ultimately this case serves as reminder that there are unavoidable risks inherent in hiring staff, which employers need to monitor and manage as best they can. It remains to be seen whether the Supreme Court takes a different approach.