Gallagher v. Tucson Unified School District
No. 2 CA-CV 2014-0124 (Ariz. Ct. App. May 12, 2015)

Under A.R.S. § 12-820.05(B), a public entity cannot be held liable for injuries arising from a felony committed by an employee. This immunity, however, disappears if the entity knew of the employee's propensity for that action. How far does this exception go? What if the public entity should have known, and would have known, if it had thoroughly investigated the employee's background? The Court of Appeals recently determined that only actual knowledge defeats immunity under this statute.

Tucson Unified School District ("TUSD") hired a special education teaching assistant in 2005. In 2011, the Tucson Police Department began investigating the assistant after child porn was found on his computer. The principal of his school helped the police identify one of the children on his computer as a TUSD special needs student. The assistant was arrested and convicted of a felony. The student's parents sued the school district. One of their claims, negligent hiring, rested on the finding that a previous employer had terminated the assistant after he inappropriately touched a patient and made a sexual remark to her.

TUSD argued that it was immune under A.R.S. § 12-820.05(B), which provides: "A public entity is not liable for losses that arise out of and are directly attributable to an act or omission determined by a court to be a criminal felony by a public employee unless the public entity knew of the public employee's propensity for that action."

The Court of Appeals held that actual knowledge is required for the immunity exception to apply. Constructive knowledge of the assistant's past behavior would not defeat TUSD's immunity. The Court also said that good faith was irrelevant to the statute. Even if the principal who hired the employee failed to contact his past employers, in violation of § 15-512, this would not negate TUSD's immunity.

Checking references before hiring an employee is certainly recommended, but public entities can breathe a little easier knowing that, if they miss something during the hiring process or fail to learn about negative behavior during employment, they will not be liable for a felony without proof of actual knowledge.

For more information, please contact one of our employment attorneys below:
Robert D. Haws - 602.257.7976 - rhaws@gustlaw.com
Susan P. Segal - 602.257.7425 - spsegal@gustlaw.com
Jennifer N. MacLennan - 602.257.7475 - maclennan@gustlaw.com
Shelby M. Exposito - 602.257.7498 - sExposito@gustlaw.com

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