September 12, 2018
Author: Wade W. Herring
Organization: Hunter, Maclean, Exley & Dunn, P.C.
I. At-will Employment
Georgia is an at-will employment state, per statute and case law. O.C.G.A. § 34-7-1. An employer or employee can terminate the employment relationship unilaterally, and at any time, unless there is a controlling contract to the contrary.
Employment for any indefinite period, even if that indefinite period is called “employment for life” or “employment until retirement,” is not employment by contract and is considered at-will employment. Where employment is at-will, there can be no claim for wrongful termination. Balmer v. Elan Corp., 278 Ga. 227 (2004). Because at-will employment does not allow for wrongful termination actions, an atwill employer may terminate an employee with or without cause, without liability. Ekokotu v. Pizza Hut, Inc., 205 Ga. App. 534 (1992). Even in the case of employment as part of a settlement agreement, without a specific term of employment, the relationship is at-will, and the employer or employee can terminate that relationship at any time. Jenkins v. Georgia Dep’t of Corr., 279 Ga. App. 160 (2006). Further, if employment is at-will, the employer may alter the terms of employment at any time. Transkey, Inc. v. Adkinson, 225 Ga. App. 457 (1997).
A. Exceptions to At-will Employment
Oral or written employer promises are not sufficient to overcome the presumption that employment is at-will, unless the alleged contract specifies a definite period of employment. Lane v. K-Mart Corp., 190 Ga. App. 113 (1989). Therefore, an oral promise not to fire an employee for specific behavior is not enforceable. Balmer, 278 Ga. at 228. Further, reference to a two year waiting period for bonus eligibility in an agreement letter between employer and employee does not create a definite period of employment. Hanne v. Miss. Mgmt., Inc., 255 Ga. App. 143 (2002). Nevertheless, employers may be subject to a claim for breach of contract if, by contract, the employer agreed to give notice of termination but did not. Parker v. Crider Poultry, Inc., 275 Ga. 361 (2002).
1. Employee Handbooks (as implied contracts)
Georgia courts routinely find that an employee handbook does not support an action for wrongful termination unless specific language in the handbook defines the duration of employment. Ellison v. DeKalb County, 236 Ga. App. 185 (1999). Even so, an employee handbook may be considered a contract for the purposes of benefits, like severance pay and other earned benefits. Fulton-DeKalb Hosp. Auth. v. Metzger, 203 Ga. App. 595 (1992). Further, if an employee handbook promises reinstatement and back pay if an employee is cleared of wrongdoing, that handbook may give rise to a mutual expectation of continued employment absent any misconduct. Baxter v. Fulton-DeKalb Hosp. Auth., 764 F. Supp. 1510 (N.D. Ga. 1991).
The general contract doctrine of good faith and fair dealing applies to written employment contracts. See O.C.G.A. § 13-4-20. For the doctrine to apply, the claim in tort must be tied to a specific contract provision, and not the contract or relationship generally. Alan’s of Atlanta, Inc. v. Minolta Corp., 903 F.2d 1414 (11th Cir. 1990). For example, the court found that a jury question existed where a corporation may have been motivated to terminate an employee because of a buy back provision in his employment contract that allowed for the corporation to buy back his shares at a lower price if he was terminated for cause. Phillips v. Key Services. Inc., 235 Ga. App. 564 (1998). In that case, the claim for breach of good faith and fair dealing was tied to the buy back provision in the employee’s contract.
2. Public Policy Exceptions
Georgia courts will not create public policy exceptions to the at-will employment doctrine. Such exceptions are to be left to the legislature, and are not to be created by the judiciary. Robins Fed. Credit Union v. Brand, 234 Ga. App. 519 (1998). Many recent decisions re-affirm the courts’ deference to the legislature.
While Georgia courts will not create such exceptions, some exist per statute. For example, an employer may not discipline or terminate a health care worker who refuses to participate in an abortion procedure, provided moral or religious objections are made in writing. O.C.G.A. § 16-12-142. Further, an employer may not discharge an employee because the employee makes a complaint under the Sex Discrimination and Employment Act or the Equal Employment for the Handicapped Act. O.C.G.A.
§§ 34-5-3(c) and 34-6A-5. An employer also may not discharge an employee because that employee was absent from work for the purpose of attending a judicial proceeding in response to a subpoena, summons for jury duty, or other court order or process which requires the attendance of the employee at the judicial proceeding, so long as the employee gives reasonable notice of his absence and is not charged with a crime. O.C.G.A. § 34-1-3(a).
There is no public policy exception that provides for the protection of “whistleblowers” in private employment. Eckhardt v. Yerkes Reg’l Primate Ctr., 254 Ga. App. 38 (2002). Similarly, there is no public policy exception that prevents employers from terminating employees who assert their rights under the Georgia Workers’ Compensation Act. Evans v. Bibb County, 178 Ga. App. 139 (1986). There is also no “constructive discharge” doctrine in Georgia. See generally Jellico v. Effingham County, 221 Ga. App. 252 (1996).
II. Written Agreements
A. For Cause Termination
Where the written agreement requires termination “for cause” and does not define that term, it is the duty of the terminating party to exercise good faith when determining what constitutes “cause” for termination. Phillips, 235 Ga. App. 564. One jury found that, absent evidence that an employee defectively or deficiently performed his duties or obligations, they could not find that he was terminated for good cause. Toncee, Inc. v. Thomas, 219 Ga. App. 539 (1995).
Broadly worded “for cause” standards may be enforceable. In a case in which the terms under which an employee could be terminated were broad, the court found that the actions fell within those terms, and the termination was upheld as lawful. Suwanee Pediatrics, LLC v. Fan, 274 Ga. App. 456 (2005). Further, procedural breaches of employment agreements will not void an otherwise valid termination under the terms of the agreement. For example, failure to provide the proper notice in advance of termination did not void the termination, did not entitle the employee to recover the full value of the employment contract, and the employee was entitled to only nominal damages for breach of contract in the absence of any actual damages.
Botterbusch v. Preussag Int’l Steel Corp., 271 Ga. App. 190 (2004). As to remedies, at least one court has awarded costs of litigation to the employee where it found that he was not terminated for good cause. In that case, the employer pointed to excessive personal phone calls as the reason for termination, even though the employee offered to reimburse the company for the expense of the phone calls. Bldg. Materials Wholesale, Inc. v. Reeves, 209 Ga. App. 361 (1993).
B. Arbitration Clauses
The Georgia Arbitration Code (O.C.G.A. §§ 9-9-1 et seq.) applies to all disputes in which the parties have agreed in writing to arbitrate. O.C.G.A. § 9-9-2(c). Under Georgia law, arbitration provisions in employment contracts are valid only if the arbitration clause is initialed by all signatories to the contract, at the same time the employment contract is executed. O.C.G.A. § 9-9-2(c)(9). If the arbitration clause is not initialed by all the necessary parties, it may be held to be unenforceable. Columbus Anesthesia Group P.C. v. Kutzner, 218 Ga. App. 51 (1995). However, such initialing requirements do not apply to an independent contractor relationship, as an independent contractor is not an “employee” for the purposes of the statute. O.C.G.A. § 9-9-2(c).
If the arbitration clause is found to be invalid, as long as the agreement is supported by legal promises to do a number of things (rather than just a promise to do one thing), the invalid clause may be severed from the agreement, even in the absence of a severability clause. ISS Int’l Serv. Sys., Inc. v. Widmer, 264 Ga. App. 55 (2004). If the transaction out of which the arbitration clause arose involves interstate commerce, then the Federal Arbitration Act (“FAA”) may control, in which case state law must yield to the controlling federal law. Primerica Fin. Services, Inc. v. Wise, 217 Ga. Ap. 36 (1995). Federal law favors arbitration, and the employment relationship is no exception. Under federal law, arbitration agreements need not be signed, let alone initialed. See generally Caley v. Gulfstream Aero. Corp., 333 F.Supp. 2d 1367 (N.D.Ga. 2004), aff’d, 428 F.3d 1359 (11th Cir. 2005), cert. denied, 547 U.S. 1128 (2006).
III. Oral Agreements
An alleged oral promise implying additional compensation (i.e., promotion contingent on meeting of certain conditions) is not enforceable by the at-will employee. Moore v. BellSouth Mobility, Inc., 243 Ga. App. 674 (2000). However, an at-will employee has a cause of action for breach of contract for unpaid compensation based on an oral promise, where the employee is seeking compensation for work already performed (as opposed to future work). Walker Elec. Co. v. Byrd, 281 Ga. App. 190 (2006).
A. Promissory Estoppel
An employee’s detrimental reliance on oral assurances that are not sufficiently specific to alter the at-will employment relationship fails to give them contractual effect. Balmer, 278 Ga. App. 277 (2004). The following kinds of oral assurances are not sufficiently definite to alter the at-will employment relationship in order to form contracts: promise to reinstate an employee to her position (White v. Int’l Tel. & Tel. Co., 718 F.2d 994 (11th Cir. 1983)); promise that the employer would alter the terms of the written contract which contained a no oral modifications clause (Gerdes v. Russell Rowe Communications, Inc., 232 Ga. App. 534 (1998)); promise that the employee would remain employed until the company became insolvent (Barker, 199 Ga. App. 742); promise that employee would be employed “for the rest of [his] working life” (Ely v. Stratoflex, Inc., 132 Ga. App. 569 (1974); promise that employee would be employed for “lifetime,” which meant “until death or retirement” (Land v. Delta Air Lines, 130 Ga. App. 231 (1974).
Where plaintiffs have asserted fraud claims against their employers, the claims have failed when the issue involved alleged just cause termination. Under Georgia law, a claim of fraud cannot be predicated on an unenforceable promise of job security, such as an oral promise to reinstate an employee after maternity leave. White, 718 F.2d 994. Further, claims of fraudulent misrepresentations regarding future job security do not hold up when employment is at-will. Edwards v. Cent. Ga. HHS, Inc., 253 Ga. App. 304 (2002). Merger clauses also generally preclude any fraud actions, provided those actions rely on the oral contract made before and not included in the written contract. Reichman v. S. Ear, Nose & Throat Surgeons, P.C., 266 Ga. App. 696 (2004).
However, where fraud is based on existing facts, there may be a cause of action. Tart v. IMV Energy Sys. of Am., Inc., 374 F.Supp.2d 1172 (2005). At least one Georgia court has found that a jury question existed on the issue of fraudulent inducement where the plaintiff alleged that the defendant’s false statements induced him to leave his former employer. Plane v. Uniforce MIS Services of Ga., Inc., 232 Ga. App. 757 (1998).
C. Statute of Frauds
Any agreement that is not to be performed within one year from its making must be in writing and signed by the party to be charged with the obligation or some person lawfully authorized by him. O.C.G.A. § 13-5-30(5). An oral contract of employment for a term beyond one year is therefore unenforceable under the statute of frauds.
Edwards, 253 Ga. App. 304.
However, the statute of frauds does not apply where there has been performance on one side, accepted by the other in accordance with the contract. O.C.G.A. § 13-5- 31(2). Part performance of an oral employment contract takes such a contract out of the statute of frauds, if the part performance is consistent with the presence of a contract and inconsistent with the lack of a contract. Such part performance that is consistent with the presence of a contract is a difficult burden to establish. For example, mere entry of employment is insufficient part performance to satisfy this requirement. Also, moving residence and refusing another employment offer is insufficient part performance. O’Neal v. Home Town Bank of Villa Rica, 237 Ga. App. 325 (1999); see also Johnson v. Univ. Health Services., Inc., 161 F.3d 1334 (11th Cir. 1998) (performance of a condition precedent, such as speaking to current employer about the possibility of leaving, does not constitute sufficient partial performance). Also insufficient is traveling to Japan, facilitating sale of business to future employer, finding office space for that future employer, referring customers to future employer, and providing client list to future employer. Ikemiya v. Shibamoto Am., Inc., 213 Ga. App. 271 (1994). Further, showing up for work to participate in scheduled client appointments is not sufficient to show part performance, as such activities are not inconsistent with at-will employment, without an express contract.
Ford Clinic, Inc. v. Potter, 246 Ga. App. 320 (2000).
The essential elements, therefore, of an employment contract are the nature and character of the services to be performed, the place of employment, and the amount of compensation to be paid. All of these elements must be stated with sufficient definiteness. Zager v. Brown, 242 Ga. App. 427 (2000). An employment contract may be based on a series of documents, rather than one specific document. For example, a valid written employment contract existed between a professor and the Board of Regents based on a series of letters in which the parties exchanged mutually interdependent promises containing all the essential terms of a contract. Bd. Of Regents of the Univ. Sys. of Ga. v. Doe, 278 Ga. App. 878 (2006).
A. General Rule
Georgia law recognizes two forms of action for defamatory publications: libel, which applies to written or printed words, and slander, which concerns oral communications. Hayes v. Irwin, 729 F.2d 1466 (11th Cir. 1984). Defamation is actionable only when the communication is both false and malicious. Further, the plaintiff bears the burden of proving the falsity of the communication. See Cox Enterprises., Inc. v. Nix, 274 Ga. 801 (2002). The Georgia legislature has codified the common law definitions of libel and slander. O.C.G.A. § 51-5-1 et. seq. Generally, whether a statement is defamatory is a question for the jury. Hayes v. Microcomputer Products., Inc. v. Franza, 268 Ga. App. 340 (2004).
In determining whether a statement is defamatory, a court should read and construe the publication in its entirety and in the sense in which the reader, to whom the publication is addressed, would understand it. Hoffman-Pugh v. Ramsey, 312 F.3d 1222 (11th Cir. 2002). Further, a publisher is responsible not only for the actual words published, but for innuendo suggested by such words. Franza, 268 Ga. App. 340.
An employer may be vicariously liable for libel produced by its employees within the scope of employment under the doctrine of respondeat superior. John D. Robinson Corp. v. S. Marine & Indus. Supply Co., 196 Ga. App. 402 (1990). Libel is a false and malicious defamation of another, expressed in print, writing, pictures or signs, tending to injure the reputation of the person and exposing him to public hatred, contempt, or ridicule. The publication of the libelous material is essential to recovery, and publication is accomplished as soon as it is communicated to any person other than the party libeled. O.C.G.A. §§ 51-5-1(a)-(b) and 51-5-3. Actions for injuries to reputation must be brought within one year after the right of action accrues. O.C.G.A. § 9-3-33.
An intra-corporate communication heard by someone with authority to hear such information is not considered publication for purposes of defamation, and in such a situation, the intent of the communicator is immaterial. Kramer v. Kroger, Inc. 243 Ga. App. 883 (2000); Kurtz v. Williams, 188 Ga. App. 14 (1998). Further, the intracorporate exception is not limited to individuals who are above the plaintiff in the organization’s hierarchy. Rather, the question is whether because of his duty or authority, that person had reason to receive the information. Terrell v. Holmes, 226 Ga. App. 341 (1997). In a recent case, a court has found that there was no showing made by employer to justify sending an email to all company employees stating that the plaintiff was terminated for cause. Franza, 268 Ga. App. 340.
An intra-corporate communication made in good faith subsequent to a public, legal or moral duty is not actionable for defamation. McClesky v. Home Depot, 272 Ga. App. 469 (2005). Further, where a supervisor has a duty to report a matter, the report is not considered published for defamation purposes because it has been placed in the employee’s personnel file. Cartwright v. Wilbanks, 247 Ga. App. 187 (2000).
An oral publication of a written defamation, as in reading a defamatory document over the phone to a third party, constitutes libel, not slander. Garren v. Southland Corp., 237 Ga. 484 (1976).
Slander, or oral defamation, consists of:
--imputing to another a crime punishable by law;
--charging a person with having some contagious disorder or with being guilty of some debasing act which may exclude him from society;
--making charges against another in reference to his trade, office, or profession, calculated to injure him therein; or
--uttering any disparaging words productive of special damages which flow naturally from those disparaging words.
O.C.G.A. § 51-5-4(a). Like an action for libel, actions for injuries to reputation by slander must be brought within on year after the right of action accrues. O.C.G.A. § 9-3-33.
Radio or television broadcasters or their employees may be liable for any damages for
any defamatory statements when the broadcaster failed to exercise due care to prevent the publication or utterance of the statement in the broadcast. O.C.G.A. § 51-5-10. For example, a the Georgia Supreme Court found that a trial court correctly allowed a jury to consider a slander per se claim, where the crimes of adultery and/or fornication were imputed to plaintiff by a caller to a radio call-in show. Wolff v. Middlebrooks, 256 Ga. 268 (2002).
Vague statements or derogatory comments do not rise to the level of slander per se when the hearer cannot reasonably conclude from what is said that the comments impute a crime upon the plaintiff. Taylor v. Calvary Baptist Temple, 279 Ga. App. 71 (2006). Summary judgment is properly granted on a claim of slander per se where the words at issue were not recognizable as injurious on their face, and did not cast aspersions on the plaintiff’s professional reputation. Bellemead, LLC v. Stoker, 280 Ga. 635 (2006).
The rule discussed under libel actions regarding intra-corporate communications does extend to slander actions. Terrell, 226 Ga. App. 341 (1997).
The doctrine of respondeat superior does not extend to slander actions in Georgia. Kramer, 243 Ga. App. 883. It must be alleged and shown that the employer “expressly ordered or directed” the employee to speak the words in question before the employer can be held vicariously liable. Sires v. Luke, 544 F.Supp. 1155 (S.D.Ga. 1982).
While an employer is not liable for unauthorized and ungratified slander by one of its agents, the employer may be liable for tortious misconduct when a customer on the premises for business purposes is subjected to abusive, insulting, or slanderous language by an agent of the employer. Carter v. Willowrun Condo. Ass’n, Inc., 179 Ga. App. 257 (1986).
Statements made about a current or former employee by the current or former employer to a prospective employer have qualified privilege status because the prospective employer has a legitimate interest in the information. Kenney v. Gilmore, 195 Ga. App. 407 (1990). However, if the reference statements are made with malice or ill will toward the plaintiff employee, the defendant employer loses its qualified privilege.
The Georgia Code lists nine examples of privileged communications:
1. statements made in good faith in the performance of a public duty;
2. statements made in good faith in the performance of a legal or moral private duty;
3. statements made with a good faith intent on the part of the speaker to protect his interest in a matter in which he is concerned;
4. statements made in good faith as part of an act in furtherance of the right of speech or the right to petition the government for a redress of grievances under the Constitution of the United States or the Constitution of the State of Georgia in connection with an issue of public interest or concern, as defined in O.C.G.A. § 9-11-11.1(c);
5. fair and honest reports of the proceedings of legislative or judicial bodies;
6. fair and honest reports of court proceedings;
7. comments of counsel, fairly made, on the circumstances of a case in which he or she is involved and on the conduct of the parties in connection therewith;
8. truthful reports of information received from any arresting officer or police authorities; and
9. comments upon the acts of public men or public women in their public capacities and with reference thereto.
O.C.G.A. § 51-5-7.
The privilege defense is not perfected unless the employer can show good faith, an interest to be upheld, a statement properly limited in its scope, a proper occasion, and publication to proper persons. McClesky v. Home Depot, Inc., 272 Ga. App. 469 (2005). Proof that the defendant acted with actual malice in making the statement will defeat the privilege defense. Rabun v. McCoy, 273 Ga. App. 311 (2005).
The privilege defense is perfected in court pleadings where the charges, allegations and statements made are in a court of competent jurisdiction and are pertinent and material to the relief sought, whether they are legally sufficient to obtain that relief or not. “However false and malicious such charges, allegations, and averments may be, they shall not be deemed libelous.” O.C.G.A. § 51-5-8. The absolute privilege given by this provision has been broadly interpreted to cover many court documents, but has not been extended to publishing contents of official court documents outside of the judicial process. O’Neal, 237 Ga. App. 325.
Communications made in connection with laws concerning unemployment compensation benefits are absolutely privileged. O.C.G.A. § 34-8-122(a). Similarly, defamatory information uncovered in the course of job performance investigations conducted by the employer may be considered privileged. Williams v. Cook, 192 Ga. App. 811 (1989). Communications to the Georgia Department of Labor for the purpose of reporting an employee’s termination are absolutely privileged, as well. Shannon v. Office Max N. Am., Inc., 291 Ga. App. 834 (2008).
Hospital administrators and other authorized persons are immune from civil or criminal liability for disclosure of the denial, restriction, or revocation of medical staff privileges when the information is distributed only to employees with a need to know the information. O.C.G.A. § 31-7-8(d). Similarly, doctors are protected from liability for defamation when reports are made to internal medical peer review committees.
O.C.G.A. § 31-7-133.
A hospital, healthcare institution, school, public health facility, daycare center, childcare center, bank, licensed home healthcare provider, home health agency, savings and loan association, or credit union who discloses information concerning an employee’s or former employee’s job performance; discloses any act committed by such employee which would constitute a violation of Georgia law if such an act occurred in Georgia; or, discloses ability or lack of ability to carry out the duties of such job, is presumed to be acting in good faith. The information may only be disclosed upon request of a prospective employer or the person seeking employment. Lack of good faith must be shown by a preponderance of the evidence, unless the information disclosed was otherwise considered confidential according to applicable federal, state, or local law. O.C.G.A. § 34-1-4.
F. Other Defenses
Truth is always a defense to defamation. O.C.G.A. § 51-5-6. Thus, an unfavorable employment reference, if true, will not support a claim for defamation. Hickson Corp v. N. Crossarm Co., Inc., 357 F.3d 1256 (11th Cir. 2004).
Defamation is also not actionable unless the defamatory communication is published to a third party, as discussed above. Shannon, 291 Ga. App. 834. Further, for publication to occur, the third party must understand the communication. Sigmon v. Womack, 158 Ga. App. 47 (1981).
Georgia courts reject the concept of self-publication, finding it insufficient to satisfy the publication element of defamation. Thus, an employer is not liable for making defamatory comments to the employee alone if it is the employee who later communicates the defamatory matters to third persons, including prospective employers. Sigmon, 158 Ga. App. 47. For example, it is not slander for an employee to tell his coworkers the reason for his termination. Bass v. Colonial Banking Co., 158 Ga. App. 232 (1981).
If an employee requests or consents to the presence of a third party and then solicits the publication of a matter which he knows or has reasonable cause to suspect will be unfavorable to him, the employee cannot then complain of defamation. Such action by the employee is considered “invited libel” and is not actionable in Georgia. Terrell, 226 Ga. App. 341.
Statements which are expressions of opinion cannot form the basis of a defamation action. Fuhrman v. EDS Nanston, Inc., 225 Ga. App. 190 (1997). However, Georgia courts have been clear to reject the opinion defense as applied to statements that imply an assertion of objective fact. The pivotal questions concern whether the statements can be reasonably interpreted as either stating or implying defamatory facts about the plaintiff, and if they can be so interpreted, whether the assertions are capable of being proved false. Mathis v. Cannon, 252 Ga. App. 282 (2001).
G. Non-Disparagement Clauses
A defamation cause of action is distinct from a cause of action arising from the breach of a non-disparagement clause contained in an employment contract. In a recent case, the non-disparagement clause prohibited both “disparaging or defamatory remarks or comments.” In such a case, whether the statements were true or not was irrelevant to a determination of whether the statements were disparaging.
In addition, the court noted that the privileges afforded in regards to defamation actions were not available in the disparagement action. Eichelkraut v. Camp, 236 Ga. App. 721 (1999).
V. Negligent Hiring/Negligent Retention
Georgia employers are responsible for maintaining a safe workplace and may be liable for negligent hiring or negligent retention of a dangerous employee. To recover for a negligent hiring and retention claim, a plaintiff must prove that:
--an employee was incompetent;
--the plaintiff’s injury resulted proximately from the incompetency; and
--the employer knew, or in the exercise of ordinary care should have known, of such incompetency.
Am. Multi-Cinema, Inc. v. Walker, 270 Ga. App. 314 (2004).
A. Duty of Ordinary Care
An employer “is bound to exercise ordinary care in the selection of employees and not to retain them after knowledge of incompetency.” O.C.G.A. § 34-7-20. Generally speaking, the ordinary care standard does not require an employer to investigate an employee’s past before hiring. For example, an employer was not liable for negligent hiring when an employee parking attendant struck a customer while on duty. The employer knew that the attendant had a non-violent criminal past, but did not know of his propensity towards violence. Worstell Parking, Inc. v. Aisida, 212 Ga. App. 605 (1994).
Hiring for certain kinds of employment, such as safety sensitive jobs, may require greater effort to meet the standard of care. Examples of those types of employment include security guards, police officers, and construction site managers. C.K. Sec. Sys., Inc. v. Hartford Accident & Indem. Co., 137 Ga. App. 159 (1976); Govea v. City of Norcross, 271 Ga. App. 36 (2005); Piney Grove Baptist Church v. Goss, 255 Ga. App. 380 (2002).
In the health care context, this duty has given rise to a separate action. “A cause of action for negligent credentialing is an independent cause of action arising out of a health care institution’s direct responsibility to its patients to take reasonable steps to ensure that medical care providers are qualified.” Wellstar Health Sys., Inc. v. Green, 258 Ga. App. 86 (2003).
B. Actual or Constructive Knowledge
An employer must have known, actually or constructively, of its employee’s incompetency in order to be held liable for negligent hiring or negligent retention. O.C.G.A. § 34-7-23. For example, one court found for the defendant employer where the plaintiff failed to show evidence that an employee who hit a patron posed a reasonably foreseeable risk of harming customers. Dowdell v. Krystal Co., 291 Ga. App. 469 (2008) (summary judgment granted to employer). Additionally, a court has found for an employer who could not have known either before or during employment of an employee’s propensity to commit adultery. Poole v. N. Ga. Conference of the Methodist Church, Inc., 273 Ga. App. 536 (2005). One court ruled in favor of the plaintiff, where the employer retained a supervisor after receiving multiple complaints from the plaintiff regarding the supervisor’s violent harassment, when that supervisor eventually raped the plaintiff. Simon v. Morehouse Sch. of Med. 908 F.Supp. 959 (N.D. Ga. 1995) (summary judgment for the defendant precluded).
The employer does not have to have knowledge of the specific act. In one case, the court made this clear when it stated that while the defendant did not know specifically that the police officer it hired would give his service weapon to a thirteen year-old child without supervision, it had reason to know of the police officer’s carelessness and disregard for safety procedures, and the city’s negligence was therefore actionable. Govea, 271 Ga. App. 36.
C. Scope of Liability
Potential plaintiffs under a theory of negligent hiring and retention include customers and clients of the employer, other employees, invitees and third party bystanders. Typically, the employer is liable for the tortious act of an employee if that act is committed during working hours or under the color of employment. Herrin Bus. Products., Inc. v. Ergle, 254 Ga. App. 713 (2002).
Employer liability for negligent hiring is distinct from that derived from the theory of respondeat superior. Negligence based on the hiring or retention decision of the employer allows the injured person to place liability on the employer, even where the employee’s conduct was intentional or criminal and did not occur within the scope of employment. Dowdell, 291 Ga. App. 469. For example, the fact that a bartender was not authorized to intervene in a physical altercation with the tavern’s patrons did not preclude the tavern owner from being liable for a patron’s injuries. Brown v. AMF Bowling Ctrs., Inc. 236 Ga. App. 277 (1999).
A common rationale for the negligent hiring theory is that it provides a remedy to injured third parties who would otherwise be foreclosed from recovering under the respondeat superior doctrine when the employee’s acts were outside the scope of employment. Durben v. Am. Materials, Inc., 232 Ga. App. 750 (1998).
Notably, the employer is liable for the tortious acts of an employee even if the act is committed outside the scope of employment, where there is a relationship between the employer and the tort victim. TGM Ashley Lakes, Inc. v. Jennings, 264 Ga. App. 456 (2003). Liability for a claim of negligent hiring and retention may fail, however, if the plaintiff knows of the employee’s incompetency. Strickland v. Foughner, 63 Ga. App. 805 (1940). In a related context, employers have a duty to exercise reasonable care not to hire an employee that the employer knew or should have known posed a risk of harm to others, where it is reasonably foreseeable from the employee’s tendencies that the employee could cause the type of harm sustained by the tort victim. Munroe v. Universal Health Services, Inc., 277 Ga. 861 (2004).
VI. Unemployment Insurance
Payment of unemployment insurance tax is due quarterly to the Georgia Department of Labor, unless the amount owed is less than $5.00 for the quarter. In such case, the payment due may be deferred until first payment of the next calendar year. O.C.G.A. § 34-8-150. The current tax rate on annual employee wages is 2.62 percent for new employers, and that rate shall remain in effect until December 31, 2011. O.C.G.A. § 34-8-151(c). The standard rate of contribution is 5.4 percent of annual employee wages, but such rate is variable according to statute. O.C.G.A. §§ 34-8-152, 34-8-155. There is also a mechanism for making unemployment payments in lieu of tax payments, set forth by statute. O.C.G.A. § 34-8-158.
The burden of disqualifying a former employee from receiving unemployment benefits is on the employer. O.C.G.A. § 34-8-194(2)(C). Such employer must show that the employee failed to obey orders, rules or instructions, or failed to discharge the duties the employee was to perform. O.C.G.A. § 34-8-194(2)(A). Whether or not the employee receives unemployment benefits is irrelevant to any other claim or determination, although, and information gathered in the course of investigating an unemployment claim is absolutely privileged by statute. O.C.G.A. § 34-8-253.