What Is a Nuclear Verdict?
Nuclear verdicts refer to exceptionally high jury awards—generally, those exceeding $10 million. Such verdicts, like the negligent hiring, retention and supersvision loss, have become increasingly common in the past decade. In fact, the National Law Journal reported the average jury award among the top 100 U.S. verdicts more than tripled between 2015 and 2019, skyrocketing from $64 million to $214 million. Furthermore, 30% more verdicts surpassed the $100 million threshold in 2019 compared to 2015.
A variety of factors have contributed to this trend, including rising litigation funding, eroding tort reform and, above all, deteriorating public sentiment toward businesses. Amid growing corporate distrust, businesses have been not only expected to meet higher standards in their operations but also held more accountable for their wrongdoings. Upon being sued and taken to court, businesses have frequently encountered juries that are sympathetic to plaintiffs. Compounding this issue, there’s a rising perception that businesses (especially large ones) can always afford the cost of damages. This means juries are likely to have fewer reservations when awarding substantial damages to plaintiffs, resulting in nuclear verdicts.
Nuclear verdicts can carry significant consequences for businesses of all sizes and sectors, causing lasting reputational harm, posing underinsurance concerns and wreaking large-scale financial havoc. That’s why it’s vital for businesses to better understand these verdicts and how to prevent them. This case study summarizes a recent nuclear verdict, outlines factors that led to the verdict, highlights associated compliance considerations and provides related risk mitigation measures.
$7.34 Billion Negligent Hiring, Retention & Supervision Loss
In December 2019, an 83-year-old woman was robbed and killed by a Charter Communications (also known as Spectrum) cable technician in her Texas home. When the victim’s family went to check on her in the coming hours, they found her body. The technician was arrested later that month and sentenced to life in prison for capital murder. Following the technician’s arrest, the victim’s family filed a lawsuit against Charter Communications, alleging that the company’s negligence contributed to the fatal incident.
In December 2019, an 83-year-old woman was robbed and killed by a Charter Communications (also known as Spectrum) cable technician in her Texas home. The day before the fatal incident, the technician responded to a service call at the victim’s house while he was on the clock. A day later, he became aware that the victim was still experiencing service issues and leveraged his employee key card to secure a company-owned vehicle and drive it to her home. Although the technician was off duty at the time, he wore his work uniform and gained reentry to the victim’s home by claiming that he was called to fix her ongoing service issues.
Once inside the victim’s home, the technician attempted to steal her credit cards from her purse; however, she caught him in the act. In response, the technician used a company-issued utility knife to stab the victim to death. From there, the technician took the victim’s credit cards and used them to make a series of fraudulent purchases. When the victim’s family went to check on her in the coming hours, they found her body. The technician was arrested later that month and sentenced to life in prison for capital murder.
Following the technician’s arrest, the victim’s family filed a lawsuit against Charter Communications, alleging that the company’s negligence contributed to the fatal incident. Specifically, amid a trial for the lawsuit, the victim’s family’s legal team asserted that Charter Communications failed to verify the technician’s employment history before hiring him—a step that would have revealed he misrepresented his work history. Court documentation also showed that the technician was on a six-month disciplinary action plan at the time of the incident and had previously written to his workplace supervisors regarding “severe distress over financial and family problems.”
Throughout the trial, multiple Charter Communications employees attested that, though he was off duty at the time, the technician’s crimes occurred within the course and scope of his employment. Additionally, these employees described a pattern of thefts and similar crimes being committed by company staff against customers over the past few years—more than 2,500 incidents in total—which Charter Communications declined to investigate or report to the authorities.
Between June and July 2022, a Dallas County jury found the company 90% responsible for the victim’s death, claiming its systemic safety failures played a role in the fatal incident. The verdict also stated that the company was guilty of using forged documents in an attempt to prevent a jury from hearing the lawsuit. As a result, Charter Communications was held liable for $7 billion in punitive damages and $337.5 million in compensatory damages, totaling nearly $7.34 billion in overall damages.
Despite this substantial verdict, the company maintained that the technician’s crimes weren’t foreseeable and, therefore, it wasn’t responsible for the fatal incident. “The responsibility for this horrible act rests solely with [the technician], who was not on duty, and we are grateful he is in prison for life,” Charter Communications said in a statement. Although the company was unable to appeal the jury’s decision, a judge eventually reduced the overall damages to $1.15 billion in September 2022, largely based on precedents set by past verdicts establishing a smaller acceptable ratio between punitive and compensatory damages.
Factors That Led to the Verdict – Negligent Hiring, Retention & Supervision
In taking a closer look at this case, the main factors that contributed to the nuclear verdict were negligent hiring, retention and supervision. Such negligence entails a business failing to exercise adequate care in the employment, retention or supervision of its workforce, thus resulting in reasonably foreseeable harm to another party.
In other words, if a business knew or should have known (had it taken appropriate measures) that an employee was unfit for their role upon hiring them, and this unfitness results in illness, injury or other damages to another party, the business could be held liable for such damages. Similarly, if a business realized or should have realized during the course of a worker’s employment that they presented a foreseeable risk to others and failed to discipline or discharge that worker before they harmed another party, the business may be held responsible for the associated damages. In addition, if a business neglected to reasonably control or monitor an employee’s actions, and this lack of supervision permitted the employee to harm another party, the business could be held liable for the related damages.
As it pertains to this verdict, Charter Communications’ failure to verify the technician’s work history may constitute negligent hiring, whereas the company’s lack of action following the employee’s written pleas regarding his financial and family problems could indicate negligent retention. Further, the company’s record of previous crimes committed by its employees against customers and its refusal to investigate or report these incidents may serve as evidence of both negligent retention and supervision.
This nuclear verdict also poses some compliance considerations related to negligent hiring, retention and supervision. It’s important to note that the laws regarding such negligence vary between states. Given that this particular verdict took place in Texas, here’s an outline of the elements the state utilizes to determine negligent hiring, retention and supervision in the workplace:
- The employer must have a legal duty to hire, supervise and retain competent employees. This may entail the following actions:
- Verifying applicants’ job qualifications, skills and experiences
- Conducting background checks on applicants
- Providing routine training to employees
- Monitoring and reviewing employees within their roles
- The employer’s failure to exercise the previously mentioned duties must be a direct and foreseeable cause of harm to another party.
Risk Mitigation Measures
To avoid nuclear verdicts similar to the one resulting from this case, businesses should follow these risk mitigation tactics:
- Minimize negligent hiring, retention and supervision exposures. Implement vigilant hiring processes for all positions. These processes should include having job candidates fill out detailed applications, verifying their employment and educational history, contacting provided references, leveraging in-depth interviews and conducting sufficient background checks. Upon hiring employees, provide them with proper training and supervision to set them up for success within their roles. Utilize periodic, documented reviews to better gauge employees’ work performances over time and take any complaints filed against staff seriously.
- Ensure compliance. Regularly assess work place policies to maintain compliance with negligent hiring, retention and supervision laws as well as any other applicable federal, state and local regulations. Consult legal counsel for additional compliance assistance.
- Secure proper coverage. In this increasingly litigious environment, it’s crucial to purchase adequate insurance. Reach out to a trusted insurance professional to discuss specific coverage needs.
Reach out to one of our trusted insurance advisors to discuss specific coverage needs, so you can avoid a Nuclear Verdict – regarding Negligent Hiring, Retention & Supervision Loss.