Vargas v. Riverbend Management LLC

Maine Supreme Judicial Court · 2024 · Corporations

2024 ME 27 (2024)

Updated August 22, 2026

CorporationsMaine Human Rights ActPublic accommodationsVicarious liabilityAgencyscope of employmentMHRApublic accommodations discrimination

Facts

Vargas and Acevedo, customers at Riverbend's McDonald's, had a dispute at the drive-through with employee Andrew Mosley about obtaining a cup of ice. After the transaction ended and they had driven away from the window, they addressed Mosley in the parking lot, and Mosley angrily cursed at them and used a racial slur. Riverbend had a zero-tolerance anti-discrimination policy, trained employees on it, had no prior complaints about Mosley engaging in discriminatory conduct, and terminated him promptly after receiving Vargas's complaint. Riverbend's owner also contacted Vargas to apologize, and there was no evidence Riverbend practiced or tolerated discrimination.

Issue

Under the MHRA, is a public-accommodation employer vicariously liable when its employee, while at work and on the employer's premises, directs a racial slur at customers? More specifically, was Mosley's conduct within the scope of employment or an independent course of conduct not intended to serve Riverbend's interests?

Rule

For MHRA claims based on an employee's discrimination against a customer, the court applies Restatement (Third) of Agency § 7.07. An employer is vicariously liable only if the employee was performing work assigned by the employer or engaging in a course of conduct subject to the employer's control, and not if the employee's conduct was an independent course of conduct not intended to serve any purpose of the employer. In deciding whether conduct was independent, courts consider both the nature and extremity of the conduct and the employer's own interests and practices, including anti-discrimination policies, training, tolerance or repudiation of discrimination, and foreseeability of the employee's misconduct.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

At a sandwich shop in Bangor, shift manager Lena Ortiz is assigned to resolve customer complaints. During a dispute over a missing order, she begins arguing with customer Devin Cole and, while still at the counter trying to address the complaint, shouts an ethnic slur at him. The shop has a written anti-discrimination policy and later suspends Lena.

Is the shop most likely vicariously liable for Lena's discrimination against Devin?

Explanation. The majority adopted Restatement (Third) of Agency § 7.07. An employer is vicariously liable when the employee is performing assigned work or engaging in conduct subject to the employer's control, unless the conduct is an independent course of conduct not intended to serve any purpose of the employer. Misconduct does not leave the scope merely because it is intentional, careless, or contrary to instructions. Here, Lena was still doing the very task assigned to her—resolving a customer complaint—so the stronger argument is that the slur occurred in the course of assigned work rather than as a separate, independent pursuit. Authorization and ratification are not controlling under the MHRA.