Can companies sue employees for making costly bad decisions?

Discussion in 'Community Discussion' started by tzhu07, Dec 17, 2015.

  1. tzhu07 macrumors regular


    Nov 12, 2008
    With the recent news regarding Marissa Mayer, it got me thinking...

    Can companies sue employees for making costly bad decisions? I would assume that they can't, otherwise I'd be hearing about it frequently within the news.

    I'm guessing the only way a company could successfully do so is if they can prove that the employee was maliciously trying to sabotage the company.
  2. maflynn Moderator


    Staff Member

    May 3, 2009
    If they could that would paralyze all business as people would be afraid to make any decisions that would land them in court.

    If they're not doing a good job, then the company has recourse, such as reassigning them, demoting them, suspending and of course terminating them.
  3. Scepticalscribe Contributor


    Jul 29, 2008
    The Far Horizon
    Exactly. Well said.

    To the OP, @tzhu07, if the introduction of such a culture of litigation - penalising people for making mistakes - became the norm, employees would fear to be proactive, to offer suggestions, or to take responsibility or ownership of anything.

    For that matter, the very last thing they would want in such an environment is any sort of responsibility, and the last thing they would offer would be an idea which might seem in any way challenging, or original, because the consequences could be so negative.

    Fear of making mistakes - even costly mistakes - would death - or end - of creativity, difference of opinion, imagination, invention and originality. This, too, could have commercial effects, long term (rather than short term) commercial effects as creativity would be stymied. Not only that, it could also encourage a culture of conformity, and group-think, which can lead to its own egregious errors.

    Anyway, how a company chooses to deal with mistakes - and the questions that get asked in the wake of mistakes - can be rather revealing.

    Such as: Were the mistakes avoidable? Are they admitted? Are they denied? Are they learned from? Is there proper oversight and accountability? What set of circumstances and people combed to create the set of circumstances which gave rise to these errors?

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