RESPONDEAT SUPERIOR CRIMINAL LIABILITY

RESPONDEAT SUPERIOR CRIMINAL LIABILITY

It may be no surprise a company can be held not just civilly, but also criminally liable, for the unlawful acts of its employees under the doctrine of respondeat superior, or “let the master answer.”

Indeed, vicarious criminal liability makes sense if we are talking about an officer of a company, or maybe even a manager; after all, a company can only act through its agents. Without vicarious liability, a company would benefit from hiring of unscrupulous agents who conspire to violate the law. Unfortunately, criminal liability goes much deeper than the key members of the organization, to the lowest echelon employees.

The United States Supreme Court has long held that Congress has the ability to punish a company for the criminal behavior of all employees. The prosecutor need only prove that the employee responsible for criminal conduct acted within the scope of his employment.

This legal standard does not require the company authorize or direct the employee to conduct the criminal act. A corporate defendant can be held criminally liable for the conduct of a low-level employee, even one who acted in violation of company policy.

For example, in a recent federal case, low-level employees were illegally dumping waste and then cooking the books to cover up the criminal act. The ownership and officers of the corporation had no idea employees were engaged in this illegal conduct. Further, the company had a policy to prevent the illegal dumping of waste as well as a strong compliance program to enforce the policy. Regardless, the Court reaffirmed the company was guilty of a crime based on the acts of insubordinate, lower echelon employees.

Fortunately, when a corporation is facing a federal indictment for the criminal acts of employees, the government does not necessarily dismantle the company. Often, the matter is settled with fines and sometimes government monitoring for a period of time. Of course, if a high-level officer is involved in the crime, things get a little more complicated, especially for the officer who will likely face individual criminal charges in addition to any crimes charged against the corporation.

In contrast, government officials may not be held liable for the unconstitutional or unlawful conduct of their subordinates under a theory of respondeat superior. Just another example of the double standard between those who make laws and those who live under them.

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