What is an employee's liability for defective work?

Question

Employee E works as part of a development team for company C, which has a contract with customer F. Suppose that F is dissatisfied with the work product that C submits. Under what circumstances would F succeed in suing E (as opposed to C) for the allegedly defective work?

Answer 1

To sue the employee the customer would have to show that the employee was personally involved in negligently causing the work to be defective, on a negligence theory, and the information necessary to establish this claim would be hard to obtain.

In contrast, the company, C, would have strict liability for both breach of warranty (which is a contract theory) and under a tort based (i.e. non-contractually based) product liability theory. The employee would not have liability under either of these theories.

Answer 2

Probably only in the event of malpractice by a licensed professional

In general, the situation of Customer F suing Employee E when their contract is with Company C is pretty much not feasible. Customer F has no contract with Employee E, their contract is with Company C, which is a legal entity that they are transacting with when creating the initial contract.

If Customer F is dissatisfied with the work product provided by Company C, then they need to complain and take action against Company C. Company C can then proceed to try to remedy the situation in any fashion they deem acceptable including having Employee E fix the work; having Employee E2 fix the work; hire Subcontractor S to fix the work; or numerous other options.

Assuming Company C does not fix the issue, Customer F could sue pursuant to the terms of the original contract they have.

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The second issue that impedes the scenario you described is a legal concept called 'corporate veil'. Attempting to take action against the employees of a company is generally not legally permissible unless the the corporate veil is pierced, which is generally only allowed when a company is proven to have been created for the purpose of shielding bad actors from consequences.

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All of that said, there are cases where directly suing an employee could occur and that is in the situation of work being performed by licensed professionals. In my personal experience as a professional engineer, were I to put forth a design that failed to meet the standards of care for my profession, I could be personally sued (and so could my company).

This becomes relevant when we see the fallout from civil engineering disasters like the recent Florida Pedestrian Bridge Collapse wherein the Engineer of Record (EoR) failed to properly address multiple issues during the design and construction process resulting in the collapse.

FIGG Bridge Engineers was the company responsible for the design and Denney Pate was the EoR. Both FIGG and Pate were penalized by USDOT which barred them from participating in federal contracts for 10 years.