What Business owners need to know about negligence claims

By: Sam Payne, Member - Meridian Law

Earlier this year, in the case of Melissa Binns v. Trader Joe’s East, Inc., 690 S.W.3d 241 (Tenn. 2024), the Tennessee Supreme Court adopted the minority view on a critical issue under the Tennessee common law for tort cases involving claims of negligence by a business owner’s employee.  This development may have surprised Tennessee attorneys who follow the issue, particularly from a federal court perspective (those courts had predicted the opposite result).

This decision from the State’s highest court will have implications for a variety of negligence lawsuits, including automobile accidents, slip and falls, premises liability cases, and other personal injury cases.

Background

Ms. Binns, a customer of the popular Trader Joe’s store, brought a personal injury suit seeking damages based on a slip-and-fall at a local Nashville store on December 17, 2018. A Trader Joe’s employee was stocking shelves in the “fresh aisle” of the store on the day of the accident. According to the lawsuit’s allegations, this employee “carelessly loaded a stocking cart in a messy and disorganized manner to stock the shelves of the fresh aisle.”[1] Among the food items being loaded and stocked were packages of tofu, which included a clear liquid. Unfortunately, a package of tofu fell on the floor, causing a liquid spill. Although the employee did pick up the tofu package, she left the spill unattended while going to get a “CAUTION” sign. Meanwhile, Ms. Binns, unaware of the spill, continued shopping and slipped, falling to the floor and suffering injuries.

Legal Framework

Ms. Binns’s lawsuit alleged both direct–liability theories and vicarious-liability claims against Trader Joe’s since it employed the worker who created the unsafe condition that caused Ms. Binns to fall – the clear liquid spill.

·      The direct liability theories were based on the idea that Trader Joe’s had been negligent in training and supervising this employee to avoid creating spills in the store and, if so, to clean up those spills or warn unsuspecting customers promptly.

·      The vicarious liability claim (also known under the law as respondeat superior) was based on the legal theory that an employer can be held accountable for negligence or wrongdoing by its employee or agent. The employer is the “master” who must answer for the actions of those acting on its behalf.[2] Notably, the employee must have been acting within the course and scope of their duties and/or acting for the employer’s benefit of the employee at the time of the negligent or wrongful act.

So, Trader Joe’s would not have been subject to legal liability if this same employee had been driving during her lunch hour to pick up dry cleaning and had been involved in an automobile accident. Practically speaking, vicarious liability is an essential legal doctrine because it enables accident victims to pursue a defendant with deeper pockets or with more insurance when an injury occurs.

Trader Joe’s Defense Strategy

Although Trader Joe’s took the position in the lawsuit that it was not to blame for what happened to Ms. Binns, it did admit in Court papers that it would be vicariously liable for the conduct of the specific employee in question, plus any other employees allegedly involved. Based on that, Trader Joe’s then asked the Court to dismiss Ms. Binn’s negligent training and supervision claims – the direct liability claims – based on what courts have called the “preemption rule.”[3] Under the “preemption rule,” claims for negligent hiring, training, supervision, entrustment, and retention are dismissed if the employer is willing to make a specific admission in a Court filing that its employee was acting in the scope of employment. In other words, if the employer is willing to admit vicarious liability, the direct claims against it are preempted. This preemption rule has been adopted by most courts nationwide.

The Trial Court’s Decision & Its Appeal

The Davidson County Circuit Court denied Trader Joe’s motion for a partial judgment on this point but gave permission to file an appeal to a higher court; eventually, the matter came before the Tennessee Supreme Court for review. That Court described the issue as a matter of “first impression,” meaning it was writing on what amounts to a clean judicial slate.

The Tennessee Supreme Court’s Decision

In a surprising move, the Tennessee Supreme Court held that the preemption rule is incompatible with Tennessee's system of modified comparative fault and therefore declined to adopt it as the law of this State.[4] In so doing, it upheld the lower court's order denying Trader Joe’s motion and sent the case back to that court for further proceedings. At that point, Ms. Binns remained free to proceed on both direct liability (negligent training/supervision) and vicarious liability theories. To expound, the Tennessee Supreme Court noted that under modified comparative fault, a plaintiff may recover if the plaintiff’s fault is less than the combined fault of all the involved wrongdoers. But, if the employer is onlyvicariously liable to a plaintiff, a jury is not asked to compare fault between employer and employee, which would improperly conflict with the principles underlying Tennessee’s comparative fault system – that is, to compare the fault of all persons or entities involved. At the same time, the Court noted that while direct liability claims like negligent training and supervision may be derivative in that both require a plaintiff to prove that an employee’s underlying conduct was negligent, the liability stemming from negligent training/supervision is not vicarious.

Takeaways

Before the Binns decision, defense lawyers could assert an affirmative defense that if their clients admitted vicarious liability, any direct claims against the employer could be dismissed based on preemption. Multiple federal court decisions in Tennessee “predicted” that the Tennessee Supreme Court would follow the majority rule and endorse the preemption rule. As it turns out, those decisions were wrong. Plaintiffs can now pursue both vicarious and direct liability claims even if the employer concedes the former. With that, Tennessee employers have one less defense when sued for negligence on the part of an employee who causes personal injury. After Binns, a Tennessee employer can no longer “have its cake and eat it too” on this point and will have to defend against both vicarious and direct liability claims simultaneously.

At the same time, this decision reinforces for all businesses the importance of robust hiring practices and employee training. Training for employees, both at the time of onboarding and on a regularly scheduled basis, aims to educate employees and prevent harmful conduct in the workplace – whether that be unsafe work practices or other misconduct (for example, sexual harassment). Because a business entity can act only through its employees, and employers can be held liable for their employees' actions, it is critical to train employees on various legal issues and employer policies and procedures. Conversely, if a lawsuit is brought, failing to have conducted (and documented) employee training can lead to employer liability and deprive the employer of legal defenses.

If you or your business need assistance navigating the evolving labor and employment compliance landscape, Meridian Law’s team is here to help. Please do not hesitate to contact our team with any questions by telephone at (615) 229-7499, email at info@meridian.law, or through our contact form at www.meridian.law.

Disclaimer: The information in this blog post is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from Meridian Law, PLLC, or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.

[1] See Binns, 690 S.W.3d 241, 244 (Tenn. 2024).

[2] Respondeat superior is a Latin phrase that literally means “let the master answer.”

[3] In fact, Courts nationwide have referred to this rule by various names. See Quynn v. Hulsey, 850 S.E.2d 725, 727 (Ga. 2020) (“respondeat superior rule”); Bogdanski v. Budzik, 408 P.3d 1156, 1160-61 n.4 (Wyo. 2018) (“McHaffie rule” based on Missouri Supreme Court case of McHaffie v. Bunch, 891 S.W.2d 822 (Mo. 1995)); MV Transp., Inc. v. Allgeier, 433 S.W.3d 324, 334 (Ky. 2014) (“preemption rule”).

[4] In McIntyre v. Ballentine, Tenn. 1992, 833 S.W.2d 52 (Tenn. 1992), the Tennessee Supreme Court adopted a system of modified comparative fault, under which a plaintiff guilty of no more than 50% fault may receive a partial recovery, but if plaintiff's fault exceeds 50%, there is no recovery. The purpose of this system is “to link one's liability to his or her degree of fault in causing a plaintiff's damages.” McNabb v. Highways, 98 S.W.3d 649, 652 (Tenn.2003).