Sotomayor’s District Court Decisions on Employer Liability to Third Parties

Occasionally, an employer will be sued by a third party (customer, client, member of public) for liability allegedly caused by one of the employer’s employees. There is one such case for Judge Sotomayor in her role as a district judge. It’s perhaps the most off-the-wall case being covered in this series of posts, but it’s important in terms of how she deals with precedent and applicable state law.

Haybeck v. Prodigy Services Co.,944 F. Supp. 326 (SDNY 1996)
Barbara Haybeck was a customer of the defendant employer, Prodigy Services. Prodigy sold time on its computer service, and Haybeck bought time. Haybeck met an employee of Prodigy in an online chat room. By using his position, the employee spent countless hours online with Haybeck while he was at work. He gave Haybeck months of free time and allowed her to use his own Prodigy account. As it turned out, this was for the sole purpose of enticing Haybeck to have a sexual relationship with him.

The employee had AIDS and transmitted the disease to Haybeck during the course of their relationship. According to Haybeck, she asked the employee if he had AIDS, and he said no. Haybeck sued Prodigy for damages under the legal theories of respondeat superior, negligent hiring and negligent retention.

In applying New York state law, Sotomayor ruled that in order for an employer to be liable for an employee’s negligent conduct, the employee must be acting within the scope of his employment. She found that New York courts had routinely found, even in cases involving sexual misconduct, that acts taken and decisions made on an employee’s personal time can’t be imputed to the employer.

According to Sotomayor, the wrong done to Haybeck wasn’t the employee’s having sex with her, because that was done on a consensual basis. The wrong was the employee’s concealment of his HIV status, something purely personal to the employee. Sotomayor determined that even if Prodigy knew that its employee had AIDS and that he was having sex with customers, the company still couldn’t be liable to Haybeck if it didn’t know that the employee wasn’t disclosing that he had AIDS. Significantly, Prodigy couldn’t “reasonably have anticipated” that the employee was having sex without revealing his medical condition.

Sotomayor refused to set a precedent under which employers would be forced to monitor and, in some cases, control not only the health of their employees, but also the most intimate aspects of their lives. Such a finding would require employers to inquire into the HIV status of employees and control their off-duty conduct, something that would contravene the law and public policy. Thus, there was no liability under respondeat superior.

In order for Haybeck to prevail under the theories of negligent hiring and negligent retention, it wasn’t necessary to show that the employee was acting within the scope of his employment. Haybeck argued that if Prodigy knew its employee had AIDS and was having sex with its customers, the company could be liable for negligent hiring or retention. Not so fast, said Sotomayor.

In order for there to be liability under either theory, Prodigy not only had to know of the employee’s condition and of his sexual activity, it also had to know that the employee was having unprotected sex with Haybeck without informing her that he had AIDS. Haybeck didn’t allege that Prodigy knew of the employee’s failure to disclose, and there was no proof that Prodigy had such knowledge.

There was nothing in this Sotomayor opinion indicating how she personally felt about all this. She was certain what New York allowed and didn’t allow, and her dismissal of Haybeck’s suit without a trial was based strictly on that.

It could be that in another state where the law is somewhat different, Haybeck might have prevailed or, at least, been given the opportunity of having a trial. If an employer knows that an employee has AIDS and is having sex with customers, it’s not too much of a stretch to conclude that the employer had reason to believe the employee wasn’t telling customers about his medical condition. That’s not what the law in New York says, ruled Sotomayor, and that’s what controlled in this case.

We’ll next begin looking at labor and employment opinions authored by Sotomayor in her current role as a judge on the Second Circuit Court of Appeals.