Employers Can Face Direct and Vicarious Liability Claims, Even if Course and Scope Is Stipulated, High Court Rules
The Louisiana Supreme Court rejected the "stipulation rule" in vicarious liability lawsuits.
By Bradley C. Guin
On review by the Supreme Court, the defendants argued that Louisiana jurisprudence prevents a plaintiff from maintaining both a negligence claim against an employee and a separate negligence claim against the employer if the employer stipulates to the fact that the employee was in the course and scope of employment. This “centuries-old tort rule” is known as the “stipulation rule.” Natalie R. Earles, Stipulating Vicarious Liability to Avoid Direct Negligence Claims: Why This Relic of the Past Should be Abandoned in Louisiana, La. L. Rev. Lagniappe (Oct. 27, 2021), https://lawreview.law.lsu.edu/2021/10/27/stipulating-vicarious-liability-to-avoid-direct-negligence-claims-why-this-relic-of-the-past-should-be-abandoned-in-louisiana/. “The rule provides that when an employer assumes vicarious liability for its employee’s negligence, the plaintiff may not pursue additional theories of liability against the employer.” Id.
After acknowledging that the case “present[ed] an issue of first impression,” the Supreme Court rejected the stipulation rule as incompatible with Louisiana law. Martin, 2022 WL 2339095, at * 3. The Court explained: “Under Louisiana law, fault is compared, not ‘subsumed’ due to the application of the theory of respondeat superior after fault has been determined.” Id. at *8. In a concurring opinion, one justice emphasized that “the vicarious liability claim for which an employer may be responsible by law – regardless of causation – and the negligent hiring claim for which an employer may be liable by its own acts of negligence are ‘two theories of liability [that] are separate and independent.’” Id. (Crichton, J., concurring) (quoting Roberts v. Benoit, 605 So. 2d 1032, 1037 (La. 1991) (on rehearing).
The effect of Martin is clear: employers can no longer stipulate that an employee was in the course and scope of employment to escape independent negligent claims, such as negligent hiring, supervision, training, retention, or entrustment. Instead, plaintiffs are permitted to maintain both a negligence claim against an employee and an independent negligence claim against the employer under Louisiana law, even if the employer is vicariously liable for the employee’s torts.