Employment practices liability insurance provides coverage for a company for wrongful employment practices, which in general is a defined term and often includes negligent hiring, wrongful termination, discrimination, negligent evaluation of an employee, sexual harassment, retaliation and many other actions. (Credit: chrisdorney/Shutterstock)
Recently, a Dallas jury found Charter Spectrum (Spectrum), the cable company, liable in connection with the 2019 murder of Spectrum customer Betty Thomas.
Roy Holden performed a service call to the home of Betty Thomas the day before her Dec, 2019 murder. Although Spectrum contended that Holden had the following day off of work, somehow Holden discovered that Thomas had reported that she was still having trouble with her service. Holden, while wearing his company uniform, used his company key card to enter a Spectrum secured vehicle lot, and drove his Spectrum van to the Thomas home where he gained entry under the guise of fixing the fax machine. While inside, Thomas caught Holden stealing credit cards from her purse. Holden then brutally stabbed the 83-year-old with a company-issued utility knife and went on a spending spree with her stolen credit cards. Holden is currently serving a life sentence for the murder.
Trial testimony revealed that Spectrum hired Holden without verifying his employment history, which would have revealed that he was dishonest about his work history. Further, in the weeks prior to the murder and robbery, Spectrum supervisors ignored a series of red flags, including Holden's own written pleas to upper management for help due to severe distress over financial and family problems. Spectrum employees admitted at trial that there was a pattern of more than 2,500 thefts in the previous few years by Spectrum employees against customers, which the company refused to investigate or report to police. Jurors agreed that Spectrum's actions were the "proximate cause" of Thomas' death, finding the company 90% liable and Holden 10% liable.
The jury also found that after Thomas' grieving family filed the lawsuit, Spectrum attorneys used a forged document to try to force the lawsuit into a closed-door arbitration where the results would have been secret and damages for the murder would have been limited to the amount of Thomas' final cable and internet bill. The jury found that Spectrum committed forgery beyond a reasonable doubt, which constitutes a first-degree felony under Texas law.
The company was hit with a combined $7.37 billion verdict (including $7 billion meant to punish the company) for the systemic safety failures that led to the robbery and stabbing death of Thomas.
Insurance Coverage Law Center editor's note: Companies have certain responsibilities when hiring and managing employees, many of which are legal requirements under federal, state or local employment statutes. Ignoring the employee's plea for help was just one of many missteps by the company.
Employment practices liability insurance provides coverage for a company for wrongful employment practices, which in general is a defined term and often includes negligent hiring, wrongful termination, discrimination, negligent evaluation of an employee, sexual harassment, retaliation and many other actions.
However, there are always exclusions, and criminal, fraudulent or malicious acts or omissions are generally excluded. Likewise, violation of federal, state or local employment statutes is excluded as well. When an employer hires someone who presents an unreasonable risk of harm to others, be it other employees or customers, this increases the employer's claims liability.
A commercial general liability form would offer the insured-employer defense and coverage payments if necessary, if a customer's suit is based on negligent employment, and in this case, bodily injury was sustained. The duty to defend exists until the acts are proven to be criminal.
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