Taking Note of Notary Employees: Employer Liability for Notary Employee Misconduct

The law of agency governs the relations between principals, agents, and third persons. A portion of that body of law deals with the liabilities that arise when an agent causes harm to a third party. Situations in which negligent employees cause harm to their employers\u27 customers are ripe for the application of standard agency principles. Those principles dictate that the employer will be liable for the tort of an employee if the tort is committed in the scope of employment. The Restatement (Second) of Agency and case law provide many illustrations. If an employer directs an employee to perform a certain task and the employee mistakenly completes a different one, and in doing so negligently harms another, the employer is liable. Or if an employee uses a personal car for employment purposes and the employer pays for the car\u27s upkeep, then the employer is subject to liability if the employee, while on the job, causes harm to another while negligently driving the car. An employer would also be liable if it employs a full-time nurse who negligently attends to an injured third party while at work. The employer\u27s liability for a third party\u27s harm arises even though the employer is not negligent. Instead, the law of agency provides that “liability is normally based upon the fact that the tort is brought about in the course of an undertaking for the benefit, and subject to the right, of the principal to control his servant.” It is this type of liability--also referred to as vicarious liability or respondeat superior--with which this Article is concerned. The addition of a notary employee to the factual scenario complicates the legal analysis to a significant extent. For a number of reasons, some courts and state statutes have restricted the application of vicarious liability when the offending tortfeasor is a notary employee. Other courts and at least one state\u27s statute, however, embrace traditional agency principles. The law\u27s inconsistency causes confusion and has undesirable consequences. Jurisdictions that reject the application of agency law may leave injured third parties with an inadequate recovery, and allow notary employers to escape liability while benefiting from having notary services available to customers. The ultimate result is a deterioration in the quality of notary services. A better approach would rely on agency principles to address work-related notary misconduct. There is little question that employers not only have the power to control the scope of the notary services they offer but also derive some benefit from having notaries on staff. The existence of employer control and commercial advantage cannot be minimized or overlooked when resolving the vicarious liability issue. Unfortunately, cases that have been reluctant to impose vicarious liability not only tend to ignore, or at least minimize, employer control and benefit, but often reject vicarious liability with unclear and unpersuasive reasoning. Further, the significant amount of statutory protection afforded employers codifies the negative common-law trends to the ultimate detriment of the public. Although competing interests unquestionably exist, the balance should be tipped in favor of imposing vicarious liability on notary employers through the application of agency principles. To deal with this liability, employers can rely on workplace education and can insure themselves against notary misconduct