NY Court Expands Employer Liability for Economic Harm Due to Negligent Supervision

Historically, negligent supervision claims under New York law have primarily involved personal injury or property damage rather than economic loss. For that reason, they are only rarely asserted in commercial cases. In Moore Charitable Foundation v. PJT Partners, Inc. (Moore), however, the New York Court of Appeals (Court) revived a negligent supervision claim in a decision with potentially far-reaching implications for New York employers, including hedge fund managers. This guest article by Anne E. Beaumont, partner at Friedman Kaplan Seiler Adelman & Robbins LLP, explains negligent supervision claims under New York law, summarizes the fraud that led to the litigation in question, reviews the history of the Moore case and assesses the significance of the Court’s opinion. For more insights from Beaumont, see “What Hedge Fund Managers Need to Know About Arbitration of Disputes” (Feb. 10, 2022).

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