Tennessee Supreme Court Rules Employers Can’t Use Vicarious Liability to Block Negligence Claims (Insurance Journal)

Tennessee Supreme Court Rules Employers Can’t Use Vicarious Liability to Block Negligence Claims

Wednesday, April 10th, 2024 Insurance Industry Legislation & Regulation Liability Risk Management

This week, the Tennessee Supreme Court delivered a landmark verdict that marks a significant shift in how businesses and insurance companies can defend against negligence claims. The court found that employers could no longer use the defense of vicarious liability as a blanket shield against direct negligence claims, particularly in instances where a business admits responsibility for an employee’s actions. This ruling arose from a slip-and-fall case against Trader Joe’s, setting a precedent that reverberates across multiple industries, from retail to trucking.

The case at the center of this ruling began when a customer slipped and fell at a Nashville Trader Joe’s, due to what was claimed as negligent stocking and cleanup by an employee. Trader Joe’s attempted to dismiss the direct negligence claims by admitting vicarious liability for the employee’s actions. However, this approach has been overturned by the Tennessee Supreme Court, emphasizing that the state’s system of comparative fault does not accommodate the preemption rule, which had been used to prevent the exploration of a company’s own negligence in training and supervision.

This decision challenges the previously common practice among businesses to limit discovery and potentially avoid accountability for their training, hiring, and safety practices. Legal professionals and industry organizations had closely watched the case, with groups such as the American Trucking Association and the Tennessee Trucking Association voicing their support for Trader Joe’s position, highlighting the widespread implications of this ruling.

Ultimately, the Tennessee Supreme Court’s decision opens the door for more comprehensive litigation against companies, allowing claims of negligent training, supervision, and other direct negligence to proceed alongside vicarious liability claims. This shift aims to foster greater transparency and accountability, pushing businesses to maintain higher standards of employee training and safety to mitigate future liability risks.

Claims Pages Staff Writers are dedicated professionals covering a broad spectrum of insurance topics, including auto, catastrophe, education & training, fraud, legislation, liability, life & health, litigation, property, risk management, technology, underwriting, and workers' compensation. With over 25 years of distribution, our publication brings you accurate and timely information to keep you informed and ahead in the claims industry.

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