When Is a Manager a Managing Agent?

After October 1, 1999, Florida law governs how companies can be held responsible for punitive damages. A court case called Schropp v. Crown Eurocars, Inc. explained two ways a company can be held responsible. The first way is if the company was negligent in hiring or keeping an employee who caused harm. The second way is if a high-level person in the company, like a manager or owner, did something really bad. A new law now also says that a company can be held responsible if they knew about and approved of an employee’s bad actions. The law is a little confusing, so courts and lawyers will still use old cases to understand it better. The Florida Supreme Court’s Schropp opinion might make people think that any employee with a management role can make a company pay punitive damages. But, this is not true. In Florida, a high-ranking employee with real policymaking authority is needed for a company to be held liable for punitive damages. The court in the Schropp case said that a company can’t be held responsible for punitive damages just because an employee did something wrong. The employee must be high-ranking, like a managing agent or policymaker, for the company to be liable. However, the opinion doesn’t actually explain who qualifies as a managing agent or policymaker, which makes it hard for people to know for sure. In Florida, the term “managing agent” can be misleading. A corporation is not usually held responsible for the actions of all managers, only those who manage the corporation as a whole. The Florida Supreme Court clarified that corporations are not automatically liable for punitive damages for the actions of their employees. There must be some separate fault on the part of the corporation. However, if the person causing the damage is the managing agent or primary owner of the corporation, the corporation can be held directly liable. The term “managing agent” is used to refer to a representative of the corporation, and the court treats this person as similar to the primary owner. This is a good policy because it doesn’t hold the whole company responsible for the actions of every supervisor. Punitive damages should only be awarded if the company as a whole, not just a lower-level manager, did something really bad. So it’s fair to only punish the company if the company itself did something wrong. The Florida Supreme Court said that a big grocery store, Winn-Dixie, had to pay extra money to a customer because one of its managers did something really bad. Then another court said that another big store, Montgomery Ward, might also have to pay extra money because its managers did something bad too. But the court didn’t actually decide if the managers were the main bosses of the store or not. So, the issue still needs to be figured out. In Florida, a managing agent is someone in a company who can make important decisions on behalf of the company. Courts have said that not everyone in a high position in a company is considered a managing agent. For example, a sales director, personnel director, or even a company president might not be considered a managing agent. It depends on their level of responsibility and involvement in making company decisions. In a specific case, a manager who was an assistant vice president was not considered a managing agent because he was not involved in making important company decisions. The Florida Supreme Court also said that the term “managing agent” is less restrictive than other courts have said, but this statement was not part of the actual legal decision. The court in the Schropp case made mistakes by misstating the findings of the lower court and mischaracterizing a previous court decision. They did this to limit the impact of the previous decision on the current case. The court’s intention was to narrow the previous decision, not expand it. This means that the previous decision does not apply to this case. Schropp didn’t change the law, it just kept it the same. Since then, no court has said that a regular manager is a managing agent. But there’s still no clear definition of what a managing agent is in Florida. Other courts in different states agree that only top-level employees can make their company responsible for bad behavior.

Hope that helps! Let me know if you have any other questions. The Supreme Court of California says that only top company leaders with the power to make important decisions can be held responsible for paying punitive damages. This means that regular employees or low-level managers can’t be held responsible for the company’s bad behavior. The Florida Supreme Court also said that the same rule applies to people who own the company or make important decisions for the company. This rule is meant to make sure that only the most important people in the company can be punished for its bad behavior. In New York and Florida, for a company to be held responsible for punitive damages, a high-level employee, like a manager or executive, has to be involved in the wrongdoing. Regular employees don’t count. This is because the company should only be held accountable when someone with a lot of authority does something wrong. So, if you want to sue a company for punitive damages, you have to show that someone high up in the company was involved in the bad behavior. These are references to different legal cases in Florida and other states that dealt with the issue of holding companies responsible for the actions of their employees. The courts looked at whether the employees were in positions of authority and whether the company knew about any wrongdoing. The cases show that companies can be held responsible for the bad actions of their employees if the employees are in positions of authority and the company knew about it. It also shows that the courts have different opinions on who can be considered a “managing agent” of the company. Ted C. Craig and Christopher N. Johnson are lawyers at a law firm in Miami. They focus on different areas of law, like defending businesses and handling legal issues related to money. They both went to college and law school to learn about the law. This column was written for a part of the Florida Bar that deals with business law.

Source: https://www.floridabar.org/the-florida-bar-journal/when-is-a-manager-a-managing-agent/