In a recent decision, the Court of Appeal for Ontario overturned the order of a motions judge striking the plaintiff’s claim against two employees of the corporate defendant. The employees were a barista and a manager of the coffee shop at which the plaintiff allegedly sustained burns to her hand when the barista poured hot water on her. The plaintiff claimed that the two employees had breached their duty of care toward her, and personally named them in an action in which she also sought damages against their employer.
The employer brought a motion to strike the plaintiff’s claim as against the personal defendants on the basis that: a) the claim did not disclose a reasonable cause of action against either personal defendant; and b) suing the personal defendants was an abuse of process. The motion judge held that the general rule was that employees were not personally liable for their conduct when acting in the scope of their authority and in the course of their duties on behalf of their employer. The motion judge also held that the pleading against the personal defendants was an abuse of process because they were named parties solely for the purpose of obtaining the right to examine them for discovery.
The plaintiff appealed the motion judge’s order to the Court of Appeal, which found that the motion judge had erred in law in holding that the claim did not disclose a reasonable cause of action against the personal defendants and amounted to an abuse of process. The Court of Appeal found that the plaintiff had pleaded specific acts of negligence against each individual defendant for which each might be held personally liable. Significantly, the Court of Appeal stated as follows at paragraph 14 of its decision:
The motion judge held that the claim against the individual defendants did not disclose a reasonable cause of action because “the general rule remains that employees are not liable for what they do within the scope of their authority and on behalf of their corporation”. Respectfully, the general rule is the opposite. […] Put in the negative, there is no general rule in Canada that an employee acting in the course of her employment cannot be sued personally for breaching a duty of care owed to a customer.
The Court of Appeal noted that the motion judge had conflated two separate concepts that coexist in Canadian law: an employer’s vicarious liability for its employees acting within the scope of their employment; and employees’ personal liability for their own negligence.
The Court of Appeal also rejected the defendant’s argument that the pleading against the individual defendants was an abuse of process because they were named as parties solely for the purpose of obtaining discovery. The Court of Appeal found that it was not an abuse of process to bring a suit against the personal defendants for the purpose of obtaining discovery provided that the plaintiff has pleaded a proper cause of action against those defendants.
This case serves as a reminder to employers that their acceptance of vicarious liability on behalf of an employee will generally not be sufficient to oust the employee as a party to the litigation. Accordingly, employees who are personally named in a lawsuit should always be encouraged by the employer to obtain independent legal advice. This is so even if it appears that the interests of the employee and employer are aligned, and the employer is willing to offer representation to the employee.