September 2, 2025
In a potentially problematic development for defendants in sexual assault litigation, the American Law Institute (ALI) approved a “Special Rule on Vicarious Liability for Sexual Assault” that endorses a new strict liability stance against employers for certain sexual assaults committed by employees against third parties.
At its 2025 annual meeting, the American Law Institute (ALI) approved the Restatement of the Law Third, Torts: Miscellaneous Provisions, a project that began in 2019 and concluded with the final draft adopted this year. Among its most controversial elements is a newly added rule that imposes strict liability on employers in certain cases where an employee commits sexual assault. The controversy largely stems from the Restatement’s broader endorsement of expanding vicarious liability in the context of employee sexual misconduct.
The New Rule
The Special Rule provides that:
[A] factfinder may find an employer vicariously liable for its employee’s sexual assault of a person if:
(1) the nature or conditions of the employee’s employment creates a reasonably foreseeable risk of sexual assault;
(2) the person is particularly vulnerable, by reason of age, mental capacity, disability, incarceration, detention, confinement, medical need, or other similar circumstance;
(3) the employer facilitates the sexual assault by providing the employee with substantial power, authority, or influence over the person; [and]
(4) the sexual assault occurs when the employee is performing work assigned by the employer or engaging in a course of conduct subject to the employer’s control.
The rule effectively allows for the imposition of vicarious liability on employers when an employee commits sexual assault against a “particularly vulnerable” individual—a category broadly encompassing children, the elderly, individuals with disabilities, and incarcerated persons. Notably, the Restatement concedes that this rule represents a departure from established tort principles, acknowledging that it “did not previously exist” and that it “breaks with traditional tort doctrine” by permitting liability even when the employee acted without any intent to further the employer’s interests.
The New Jersey Supreme Court is presently considering several cases which refused to hold school districts vicariously liable for the alleged misdeeds of their employees.The holdings of the cases before the New Jersey Supreme Court are contradictory to the new Restatement. While this new Restatement provision seeks to impose strict liability for an employee sexual abuse of a third party, there are statutory limitations on its implication as well as pending case law which is in direct opposition to the new provision. Presently, the Restatement is not adopted by New Jersey Courts and as such is not binding legal authority.
The new provision could significantly weaken traditional defenses by allowing plaintiffs to succeed without proving the employer was negligent. Instead, it imposes vicarious liability solely based on an employee’s conduct, regardless of whether the employer met all standards of care. This means an employer could conduct thorough background checks, implement constant monitoring, and maintain robust safeguards—yet still be held liable if an employee manages to bypass those measures and commit wrongdoing.
Industries like healthcare, education, hospitality, and entertainment—where regular interaction with particularly vulnerable individuals is inherent—are especially at risk. Under this provision, they could face liability for an employee’s criminal actions simply due to the nature of their work environment.
For additional information regarding the above, please contact:
Marc Pakrul – mpakrul@mkcilaw.us.com
Gabriel Shvachkin – gshvachkin@mcgivneyandkluger.com