Phantom Employees Create a 'Question of Fact' for Notice Defense

In the state of Michigan, premises owners are not liable for a condition that causes injury if they did not have notice of it. In order for a plaintiff to prevail in a lawsuit for damages, they must prove this element, which can be difficult.

Recently, there has been an increase in cases involving “phantom employees” in an attempt to hinder a premises owner’s notice defense. This happens when an unidentifiable employee is alleged to have stated something along the lines of “we have been meaning to fix that,” “that has been leaking for quite some time,” or “someone should have cleaned that up.” 

If the phantom employee’s statement is the only “fact” demonstrating a premises owner knew about a condition, litigators need to be prepared to hold the plaintiff accountable and really test the veracity of the alleged statement.

By definition, the phantom employee can’t be identified and, therefore, the defendant is unable to conduct a proper deposition or investigation into the existence of said employee, or to determine what, in fact, was stated by the employee. The plaintiff will likely try to have the alleged statement admitted into evidence based on Michigan Rule of Evidence 801(d)(2) – admission of a party opponent.

Specifically, the proponent of the statement has the burden to prove the alleged statement came from an agent or representative of the premises owner. Litigators should thoroughly question the description of the phantom employee and circumstances of the alleged statement. 

Many employers require their employees to wear uniforms. This is a good place to start. If a plaintiff is relying on a statement of a phantom employee, defense counsel should inquire what said employee was wearing. Recently, a hospital won a summary disposition motion in the face of an alleged statement of its “phantom employee” because the plaintiff could not establish that the statement was made by an actual employee of the hospital. Specifically, the plaintiff could not recall what color scrubs the phantom employee was wearing nor the color of scrubs worn by nurses or nurse’s aides on the date of the incident. 

The court ruled that the statement was not admissible because the plaintiff could not establish it was, in fact, made by a representative of the hospital. 

Employers also use vendors who, by definition, are not employees. A statement by a vendor is admissible if it is within the scope of their employment.  For example, a city won on summary disposition because the plaintiff could not prove the phantom employee was an agent of the city. While the phantom employee allegedly identified himself as an employee of the city, it was not enough to establish he was and that the statement was within the scope of his employment.

On its face, the “phantom employee” making admissions on behalf of his employer appears problematic from a defense standpoint; a statement from a phantom employee could deter litigators from filing a dispositive motion resulting in additional legal costs and higher settlements. But the statement can be properly defended and inadmissible if the plaintiff cannot meet the requirements of 801(d)(2).

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