in a recent opinion by the 9th District Appellate Court, it was ruled that there is no fiduciary relationship created between a company and its customers when that company hires an employee.

In the case Zanni v. Winfred Stelzer, 2007-Ohio-6215, the employer (a mortgage company) was sued by one of its customers (the homeowners), alleging that the employer’s sales representative illegally induced the homeowners into entering into an improper mortgage agreement, home-equity loan agreement and an “investment scheme”.

While the thrust of the case involved violations of the Ohio Consumer Sales Practices Act, one of the allegations lodged against the employer was that there was a fiduciary relationship between the homeowner and employer which required the employer to maintain duties of good faith, honest and fair dealing as to the customer when it hired its employee.

The Court definitively stated that a fiduciary relationship is not an element of negligent hiring and retention.  All that is necessary to maintain a negligent hiring and retention claim is (1) the existence of an employment relationship, (2) an incompetent employee, (3) knowledge by the employer of the incompetence, (4) the employee’s improper conduct and (5) the causal relationship between the negligent hiring and retention and the injuries alleged.