Here is a question asked by NBFAA'a president, and my response:
Question:
Ken, Every now and then I come across an industry member who say's that say's or asks if the alarm company installer, the employee, is additionally liable for his actions in the installation.
Here is the scenario, I own an alarm company, I sell a couple of smoke detectors as part of a burglar alarm system which is what the customer was originally calling for. The NFPA has standards for type of wire that is to be used with fire alarm components, but as the company owner I don't either know the requirements or want to spend the couple of extra dollars for the required wire type or upgraded sirens. Also according to the "codes" there is no such thing as a non compliant system or the ability to install under any circumstances a fire alarm device in a substandard way.
I give the employee the equipment for the job and sent him/her out to install it. The employee doesn't know that they are installing sub standard wiring but there is a loss sometime there after.
The people that ask me about this are assuming that the installing company has a liability because they should have known what the requirements are, but does the installer employee or sub contractor have any liability as well? What is the reasonability that the tech who has made this their choice as a profession has liability as well? Or are they shielded as an employee of the installing company.
Maybe this should not be an article because if you believe that the employee has some liability we may further harm the ability of alarm companies to keep or attract qualified employees, or we will have to sign employee contracts that we agree to indemnify the employee for the life of the systems. Then if we have to indemnify the employee for the life of the system what happens to the value of the alarm company when the companies assets are sold. Does the indemnification remain with the seller or does it ride with the assets? And how long does it ride?
A lot of questions? And difficult as to how and if to disseminate?
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Answer:
There are several different causes of action available to a subscriber damaged as a result of inferior non compliant equipment. Breach of warranty, breach of contract and negligence come immediately to mind. The alarm company undertakes by contract the obligation to install a proper fire alarm system; not only does the contract require a compliant system, but the local laws undoubtedly do as well.
So under the facts presented the alarm company intentionally decides to install a non compliant system, in order words deviate from NFPA standards, which is likely the building code standard. A subscriber can suffer damages as a result of having to reinstall the system, or as a result of a fire that went undetected. What liability does the employee face?
A breach of contract claim would be made only against the contracting party, in this case the alarm company. The employee is not sued.
In negligence however every "player" can be sued, and includes the employee who committed the negligence. Of course there would have to be proof that the employee knew of his own negligence, or should have known. This could be established by showing that the employee had to be trained, licensed or certified to do the installation. There is no shield of immunity for the employee. There is also no obligation by the employer to indemnify the employee, unless there is some contract to that effect, which is unlikely.
I guess the bottom line is, at least under the facts presented, that if there is negligence in installation and damages result, all "players" including employees can be sued. So, try not to do things you know are wrong, or ask your employees to expose themselves to personal liability. (I haven't even touched upon potential criminal liability.)