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Can a Corporation be Held Liable for the Actions of its Employees?

When an employee commits fraud or a white collar crime, he or she is not the only one who can be held accountable in court. This is because in certain cases, the person’s employer can also be held responsible for the actions of its employees. Being charged with a white collar offense as the result of an employee’s actions can have devastating consequences for a business, so if your company is being investigated for an employee’s illegal behavior, it is critical to speak with an experienced white collar crime attorney who can help you formulate a defense.

Employer Liability

Corporations can be held liable for the criminal acts of employees as long as:

  • They were acting within the scope of their authority; and
  • Their conduct was for the benefit of the company.

To establish that an employee was acting within the scope of the employment, the prosecutor must provide evidence that the employee had authority to engage in the specific act. Actual authority is granted knowingly by a corporation and delegated to the employee, while apparent authority only exists if a third party could assume that the employee had the authority to take part in the conduct in question.

In order to satisfy the second element and demonstrate a benefit to the company, the prosecutor must show that the employee:

  • Acted with an intent to benefit the company; or
  • Acted for his or her own gain, but the company ended up benefiting as well.

Even when an employee acts in violation of company policy, the business can still be held liable for the employee’s actions if these two elements are satisfied.

Accomplice Theory

Employers and fellow co-workers can also be held liable for another employee’s illegal acts under what is known as the accomplice theory. According to this theory, a co-worker or employer who encourages, instructs, or helps a fellow employee commit a crime can also be held liable for the offense itself. In fact, a supervisor who was aware of the criminal activity, but failed to take action or report it can also be indicted under the responsible corporate officer (RCO) doctrine, which states that an officer is indirectly liable for a subordinate’s criminal conduct if the supervisor:

  • Was in a position of responsibility;
  • Had the ability to stop the offense; and
  • Failed to prevent the offense.

Schedule a Consultation With a White Collar Crime Attorney Today

An employee’s criminal actions can have serious repercussions for his or her employer. For instance, a company held liable for an employee’s white collar crime could be fined, have its license revoked, and suffer significant damage to its reputation. Having the advice of an experienced Miami white collar crime attorney can make all the difference in the outcome of a case, so if your company is being investigated for an employee’s crime, please contact Jeffrey S. Weiner, P.A. Criminal Defense Attorneys by calling (305) 670-9919 today.



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