Supervisors — your wallet is on the line, too!
Employment lawsuits are expensive and inconvenient for everyone involved, especially the aggrieved employee and the person who did the aggrieving, usually his or her direct supervisor. Most supervisors are aware of the potential inconvenience, but take solace in thinking that the employer will cover the expense part, both for defense and for any judgment.
But supervisors also need to know that they face potential individual liability for some employment actions as well. Under California law, a supervisor can be individually liable for harassment, but not for discrimination or retaliation. That means the supervisor him- or herself might be on the hook for part or all of the judgment.
And that’s not all. A recent Florida case upheld a claim for tortious interference with economic relations. (Hat tip to @employeeatty.) In that case, plaintiff claimed her supervisor, acting solely for personal reasons, undermined the plaintiff’s relationship with her employer. The Florida court held that the claim could proceed against the supervisor. The main point of contention was whether the supervisor was the legal equivalent of the employer when she did what she supposedly did. If so, there could be no individual liability. The court held that plaintiff had stated a claim that could proceed.
California courts have reached similar conclusions. The general rule in California is that a manager is not liable for interference with contractual relations. But, if the manager is “acting not for [the employer], but for himself,” he could be on the hook individually. There’s some question in California whether “personnel actions” automatically fall under the general rule — one case says yes, one says (in predictable lawyer fashion) it depends.
Bottom line for supervisors: Recognize your potential personal exposure when dealing with your subordinates, and conduct yourself accordingly. Have a business justification for every significant action. Refrain from bringing personal issues into the workplace. In other words, be a smart, fair, and empathetic boss.
Employers can help by providing quality training, adopting and publishing proper policies and procedures, and having a quality HR staff or a consultant available to advise to supervisors. (Training on some issues, like harassment, is actually required in California and a few other states, and is definitely a good idea everywhere.)