Seyfarth Synopsis: A recent Georgia judgment for $64 million dollars provides a vivid illustration that failing to adequately supervise employees can be a business-ending mistake.

“Did you adequately supervise your employees today?” This can be a $64 million dollar question. A Wilkinson County, Georgia court recently found a residential care facility’s employees and several other corporate defendants jointly and severally liable for negligent conduct, breach of contract, and invasion of privacy. The complaint also raised several claims against state government departments.

The complaint alleged that a care facility providing services to individuals with mental disabilities utterly failed to supervise its employees, leading to abuse and neglect of the residents. A mother and guardian of one of the residents filed the complaint, which claimed that the facility’s employees physically beat her son on multiple occasions, neglected to properly care for his needs, and required him to vote for the owner’s sister in a local election even though he lacked the mental capability to do so. The plaintiff also claimed that the defendants knew about the abusive acts but failed to stop the abuse.

While some of the defendants were dismissed from the lawsuit, several others failed to respond to the complaint.  Subsequently, the judge entered a default judgment and imposed damages totaling $64,606,240 in the plaintiff’s favor against the remaining defendants. The defendants later asked the court to vacate the default judgment, and the parties entered into a confidential settlement before the court ruled on the motion.

While the facts alleged in this case are extreme, and the court’s damages award may be excessive, the case illustrates that judges will not hesitate to impose immense liability when a care facility fails to adequately supervise its employees and ensure appropriate care is provided.

This decision also serves as an important reminder that employees may be held personally liable for their own improper conduct. Although many statutes such as Title VII of the Civil Rights Act of 1964 do not provide for personal liability, employees can be sued in their individual capacity under common law claims such as negligence and intentional infliction of emotional distress.

Particularly when dealing with vulnerable populations, care facilities should be especially vigilant to ensure appropriate supervision, training and policies are in place to prevent this type of situation from occurring. Further, when dealing with residents or patients who may lack the ability to report and raise their own mistreatment, facilities should take particular care when investigating and responding to any internal complaints or concerns regarding care or alleged mistreatment.

Absent such procedures to prevent egregious conduct like the allegations in this complaint, a care facility and its employees might be subject to a life-changing and business-terminating judgment.