The Case
A Flick of the Switch
Toby is an employed manager of a local butcher store. Aside from keeping the store organized and in good running order, his responsibilities include the opening and closing of the store each day. During the holiday season, Toby’s workload was overwhelming and one Friday morning, he wrongly consumed alcohol while on the job. By late afternoon, he was well intoxicated and at the time of closing he accidentally flicked off the switch of the freezer while busy closing the lights and machinery of the store before leaving for the weekend. By Monday morning, all the meat prepared for next week’s customers was spoiled, and with no meat in stock the store sustained a substantial financial loss. In Bet Din, Fred, the storeowner, claimed that Toby owed him the full anticipated retail price of the spoiled meat. Toby sincerely apologized for his negligence and misconduct, though he was only willing to reimburse Fred for the wholesale purchase price of the meat. Fred explained that at the time it was high season, and it was impossible for him to receive a new shipment from his supplier. He is therefore unwilling to forfeit his very anticipated profits because of Toby’s grossly negligent behavior. Fred withheld payment of Toby’s weekly salary and yearly bonus due him after the holiday season as collateral for payment for his loss.
Is Fred entitled to collect from Toby the retail price of the meat Toby caused to spoil? Can Toby satisfy his obligation by paying Fred for the out-of-pocket loss that is the wholesale price? How should the Bet Din rule and why?
Torah Law
According to the ruling of the Shulhan Aruch, one who damages another’s property is required to compensate the victim for his loss. When appraising the damage sustained, a Bet Din will estimate the monetary value of the property at the time it was damaged. Hence, even if the property appreciated after it was damaged, nevertheless, the offender is only responsible for the appraised value at the time the damage was inflicted.
Additionally, by rule of the Shulhan Aruch, the appraisal is done according to the wholesale value of the property. Hence, although the property is designated for retail sale, the offender is not liable for the anticipated profit of the property he damaged, but rather its wholesale value.
Leading halachic authorities differentiate between an unaffiliated party that inflicts damage and an employee that negligently causes damage to his employer. It is the employee’s fiduciary responsibility to perform his job in a manner that is not reckless or counterproductive to the interest of his employer. Failure to maintain a minimal level of responsibility, and the subsequent violation of trust of an employer, can often result in costly out-of-pocket expenses to an employee. In such instances, an employee is responsible to compensate his employer the predicted appreciated value of the property he carelessly damaged based on the retail price. These stringencies imposed on an employee follow the view of many leading halachic authorities. Although a minority view challenges the above ruling, in instances in which the employer is in possession of funds owed to the employee, the ruling and decision of a Bet Din is in alliance with the majority.
By contrast, in the event an employee fulfils his fiduciary responsibilities, he is extended specific leniencies and exemptions for consequential damages. In such instances, not only is the employer’s claim dismissed, he is required to pay his worker his wages in full. Our sages extended such leniencies to an employee to protect his status and general welfare. If an employee does not violate the trust and interest of his employer, it is only just and proper to pay him his wages and free him of specific liabilities.
In instances in which an employee acts with negligence and is required to pay for damages at retail price, nonetheless, various reductions do apply. A store owner incurs multiple expenses to operate his business and the loss of gross profits does not reflect his actual net loss. Without merchandise to sell on account of the damage, the store theoretically can be closed for a duration of time, enabling the savings of substantial operating expenses. The cost of saved electricity, labor, and raw material used to operate is to be deducted from the amount an employee is required to pay. Furthermore, merchandise that can be timely purchased to replace the loss of retail sales is a serious factor to be considered. The employee is only responsible to pay the wholesale price for any merchandise that can be replaced and made available to the retail customer in an expedited manner.
VERDICT: Financial Consequences of Misbehavior
Our Bet Din ruled in favor of Fred, the employer, and instructed Toby to pay the retail price for the meat he recklessly damaged. Nevertheless, Toby is entitled to a substantial reduction off the retail price since Fred is saving multiple operating expenses. Without meat for retail sale, Fred can theoretically close his store and save on electricity, labor, and raw materials. Furthermore, although Fred’s supply of meat for the upcoming week was unavailable, he could have expedited an order from his main supplier and salvaged a day or so of his retail sales. Toby is only responsible to pay retail price for the days that were inevitably lost on account of the damage he caused. Other than the unavoidable lost retail sales, Toby is only required to pay for the cost of the meat he damaged.
Upon review of the financials, our Bet Din instructed Toby to pay Fred a 20 percent charge above wholesale price, which represents the estimated total net loss sustained by the damage. We instructed Fred to forward to Toby his much-needed salary and yearly bonus, and designed a slow pay out plan for Toby to satisfy his debt owed for damages.
As mentioned in Torah law, Toby is obligated to pay retail price after deducting the saved expenses, and not the wholesale cost of damage since he violated his fiduciary responsibilities to his employer. By wrongly consuming alcohol while on the job, he negligently breached his responsibilities as an employee and is required to bear the consequences of his misbehavior.
YOU BE THE JUDGE
A Missing Wedding Ring
Sally lost her engagement ring and she and her family spent over a week searching for her precious diamond. When the continued search proved to be futile, her husband purchased a wedding band to replace her diamond ring. Six months later, Sally and her husband hired the services of Avi, a contractor, to reconstruct their bathroom. Avi tore out a built-in vanity of the bathroom and disassembled it outside in front of the house. A hidden surveillance camera caught Avi pocketing the ring that he found wedged behind the drawer of the vanity. Before Sally called the police, she reached out to our Bet Din to assist her in collecting her valuable ring in an amicable manner. In Bet Din Avi defended his position claiming that since Sally lost the ring, she apparently despaired from ever retrieving it. Furthermore, he was in the process of trashing the contents of the bathroom and if not for him finding the ring, it would have been lost. Avi expressed that he is graciously willing to give back the sentimental ring to Sally if she monetarily reimbursed him with its market value. Sally was livid and her violent reaction to Avi’s claim caused the hearing to end abruptly.
Is Avi entitled to monetary compensation for the value of the ring or not? How should the Bet Din rule and why?