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November 2013

Gordon & Rees Houston Team Wins Summary Judgment in Negligent Hiring and Supervision Case

On Nov. 15, Gordon & Rees Houston partner Laura De Santos and senior counsel Christopher Raney obtained final summary judgment on behalf of several former nationwide staffing companies and their principal in a $15 million negligent hiring and supervision case.

The plaintiff, an oilfield products manufacturer, alleged the staffing companies were negligent in hiring and placing an employee with a criminal history in an administrative role at the plaintiff’s facility. Over a number of years, the plaintiff promoted the staffed employee from an administrative position to the head of its accounting department, where she embezzled more than $15 million, resulting in her incarceration. The plaintiff alleged the staffing companies were negligent in hiring the employee by failing to detect her criminal background, which included two prior misdemeanor theft offenses. The plaintiff also alleged that the staffing companies were negligent in supervising the employee and breached contractual and fiduciary duties to the plaintiff.

In defense of the staffing companies, Gordon & Rees developed evidence that the plaintiff, though in a joint employer relationship with the staffing companies, had the right to control the staffed employee’s assignments and job duties and was solely responsible for her transfer to the accounting department, her promotions within that department, and ultimately supervising her there. Further, the evidence developed in discovery showed that the plaintiff gave the staffed employee access to its operating accounts and authorized her to draw checks on that account.

In moving for summary judgment, the staffing companies asserted they owed no duty, as a matter of law, to perform criminal background checks on prospective hires at the plaintiff’s facility. There was no obligation to perform criminal background checks in the staffing contracts between the parties. The staffing companies also argued that there was not a special relationship under Texas common law that would impose an independent duty to perform criminal background checks. Moreover, the staffing companies contended they were not fiduciaries of their customer under Texas law.

The trial court agreed with the staffing companies, granted the staffing companies’ motions for summary judgment in their entirety, dismissed the multimillion-dollar lawsuit and entered final judgment.

Laura E. De Santos
Christopher M. Raney



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