Best Practices

Protect Your Cannabis Business From The Bad Acts Of Your Employees: Part 2

You are responsible for their actions

Sometimes, our clients are surprised to learn that a cannabis business can be held liable for the bad acts of its employees. This includes: 1) liability to the general public, and 2) state administrative sanctions, including license forfeiture. We previously discussed the importance of having a strong sexual harassment policy and action plan to avoid liability for harassment suits. But what about other bad acts committed by employees? Employers can be found liable under a few different tort theories. Today’s post will discuss the tort of negligent hiring and retention.

Negligent hiring or retention arises when an employee commits a bad act against another employee or a third party. The injured party, usually in addition to bringing suit against the bad actor, will bring a negligent hiring or retention claim against you, the employer. These claims are not always persuasive or even justified, but they can be stressful and expensive, so it is important to take precautions where possible.

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