New York Governor Kathy Hochul signed into law an amendment to the CPLR that expands the admissibility of statements made by a party’s agent or employee. This new CPLR provision will now significantly expand the “speaking agent” exception to the rule against hearsay by codifying that statements of an employee/agent are admissible as a party admission of the principal/employer if they are: (1) made about a matter within the scope of their agency/employment; and, (2) made during the existence of the agency/employment relationship.

Previously, New York Courts followed the rule that an employee’s hearsay statement is only admissible as a party admission where “the making of the statement is an activity within the scope of his [or her] authority.” See Loschiavo v. Port Auth. of N.Y. & N.J., 58 N.Y.2d 1040, 1041 (1983). In practice, this common-law rule limited speaking authority to only high levels of management. The Appellate Divisions held that the proponent of the hearsay statement need to make the sometimes difficult showing of express authority to speak on behalf of the employer. See Boyce v Guinley-Haft, Inc., 82 A.D.3d 491 (1st Dep’t 2011); see also Alvarez v. First National Supermarkets, Inc., 11 A.D.3d 572 (2d Dep’t 2004); Scherer v Golub Corp., 101 A.D.3d 1286 (3d Dep’t 2012). This strict view regarding speaking authority, as the case law indicates, held that an employee or agent who is not in charge of the business will have no implied authority to speak on behalf of the employer — even if the statement made relates to an activity the person was charged to undertake. See Tyrrell v. Wal-Mart Stores, Inc., 97 N.Y.2d 650, 652 (2001) (Wal-Mart employee’s statement “I told somebody to clean this mess up” was not a party admission because plaintiff failed to establish that the unidentified employee was authorized to make the alleged statement); see also Gordzica v. N.Y.C. Transit Auth., 103 A.D.3d 598, 598 (1st Dep’t 2013) (statement by defendant’s ticket booth clerk that she reported the defective condition prior to plaintiff’s accident was inadmissible because the statement was not within the clerk’s authority as a speaking agent on behalf of defendant).

Under the new CPLR 4549, New York’s hearsay rule is now more in line with the approach followed by Federal Rule of Evidence 801(d)(2)(D) by lessening the extent of authority that the proponent of the statement must show in order to make the hearsay statement of an opposing party’s agent or employee admissible. Under the new CPLR 4549,

A statement offered against an opposing party shall not be excluded from evidence as hearsay if made by a person whom the opposing party authorized to make a statement on the subject or by the opposing party’s agent or employee on a matter within the scope of that relationship and during the existence of that relationship.

The Legislature’s intent here is to avoid circumstances where reliable proof is excluded even though the employer, as a party, might not be treated unfairly by a statement’s admissibility, either because: (1) the statement is true and made by a person with relevant knowledge; or, (2) because the employer is able to introduce other proof in opposition to the hearsay statement. In practice this new rule of evidence – beyond lowering the bar for the proponent of such a hearsay statement – will significantly increase the pool of employees whose statements regarding an event will become admissible in support of a dispositive motion or at the time of trial. This could prove particularly vexing for employers, who may now be held to the statements of lower level employees who the employer never intended to entrust with speaking authority. Moving forward, employers will be well served to train employees on the proper scope and extent of any comments following a personal injury accident of which an employee has knowledge.

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.