Employees found personally liable
Author:
Rockliffs Solicitors and IP Lawyers
Publish Date: May 7, 2007
The courts have recently found employees personally liable for misleading conduct, even though it was conduct in the course of their employment and on behalf of their employer.
Two employees of an internet company had represented that a website operated by their employer was “perfect” for Mr X’s business, and that the facility would permit customers to pay online using major credit cards with funds directly clearing to Mr X’s account.
Mr X signed up for the online service only to find there were significant bank requirements before the facility could go ahead. Meanwhile, he had to pay a higher mark-up and sales tax at a higher rate.
To preserve credibility and goodwill with his customers, Mr X operated on the commission basis he would have charged if the representations of the two employees had been true. He conducted his business at a loss for 12 months, but then moved to a different cost structure which returned a profit to his business.
The two employees, as well as the internet company, were held liable to the tune of $60,000.
The courts did not consider it necessary to prove that the employees had knowledge of a breach to find them liable.
Reproduced with the permission of the Law Society of New South Wales.
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