The Growth Company, Inc. Reveals Guidance for Managers to Avoid Personal Liability Lawsuits

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Several state and federal court rulings have held supervisors personally liable for their employment actions. Some of these cases involved six-figure judgments. Almost all of them took years to wind their way through the courts.

“if a supervisor violates laws they aren’t aware of, they’re liable.”

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When things go wrong, those harmed or ticked off look around for someone to blame. Whomever they choose may face a lawsuit that they don’t see coming and don’t deserve – particularly if they’re a supervisor who assumes ticked off former employees will only sue the company and not them individually.

Surprisingly, the normal corporate wall limiting personal liability doesn’t completely protect supervisors. Several state and federal court rulings have held supervisors personally liable for their employment actions. According to D.Green as reported on, “Executives, supervisors and human resource employees have been held personally liable in cases involving failure to pay wages or overtime, failure to allow unpaid leave, failure to make pension contributions, wrongful termination, wrongful hiring, infliction of emotional distress, defamation, failure to deposit withholding taxes, and on other theories, as well.” Some of these cases involved six-figure judgments. Almost all of them took years to wind their way through the courts.

Consider these issues:     

Negligent hiring

When “Kevin” applied for a job, the hiring manager listened to his story about his former supervisor. In a rush to fill the position, the hiring manager didn’t call his former supervisor for her side of the story. Because the hiring manager didn’t take “reasonable precautions” by doing a full reference check, the hiring manager finds themself partially liable for what Kevin does once hired.

Never my fault

A manager fires an employee who brings her personal life drama to work and surfs the Internet instead of doing her job. She accuses the manager of creating a hostile environment based on age, sex and parenthood, producing dozens of emails in which the manager asked her not to take calls from her children. She’s the only young, African American mother the manager supervises and she sues the manager personally as well as the company. After the company attorney coldly accuses the manager of mishandling the situation and plans to settle on behalf of the company, the manager’s attorney advises him to settle the claim against him rather than lose time and money fighting a claim of intentionally inflicting emotional distress.    

Negligent referral

    An employer calls a previous manager about references for “John.” When firing John, the previous manager agreed to give him a neutral reference. Although the previous manager terminated John for verbal aggression and he scared that manager, they tell the prospective employer “John was okay.”

    In his first week on his new job, John verbally attacks and aggressively shoves another employee; the previous manager is sued for negligent referral. According to attorney Christine Walters, that previous manager may be liable- “when you say something rather than nothing but the something doesn’t totally disclose what you have knowledge of.”

If a supervisor doesn’t want to end up on the losing side of a lawsuit, what can they do?

Know the laws that protect employees.

Those who park in tow-away zones get towed even if they don’t see the signs. Similarly, if a supervisor violates laws they aren’t aware of, they’re liable. Managers can be personally liable under the federal Fair Labor Standards Act, the federal Family and Medical Leave Act and other laws such as those that penalize negligent referral, negligent hiring or the intentional infliction of emotional distress.

Make sure to know the company’s policies.

Make sure to act within designated responsibilities. If a person acts prematurely to fire or hire someone, they take on unnecessary liability. At the same time, because they can be personally liable for conduct “in the scope of employment” that violates employment laws, they shouldn’t simply follow the lead of a senior manager who asks them to do something they feel wrong.

Due diligence.

Never hire without a full reference check, regardless of how engagingly an applicant explains a former supervisor’s animus. Once a manager hires an employee who harms others, his problems become the manager’s.


Don’t act without documentation. If a manager has a problem employee, they can be sure the employee has documentation in retained emails, journal notes and potentially recorded conversations. The manager’s written records may be invaluable in showing fairness and how they’ve complied with applicable laws.

Keep actions above reproach.

When talking with employees, remain professional and respectful at all times. Never act in anger and never retaliate.

The individual the manager may be protecting – may be themself. Dr. Lynne Curry is a management/employee trainer and owner of the consulting firm The Growth Company Inc. Send your questions to her at

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Human Resources, Training, Development, Organizational Strategy