Are employers liable for their employees' misdeeds even if done on the clock? I don't know how I feel about them being liable. A background check was probably run on this dude, but a background only shows past deeds. If he'd never been accused/convicted of being a nonce, a background check would have been useless in this case. If the daycare didn’t run a background check, then there might be a case for liability despite the lack (I'm assuming) of any red flags.
You and I know that most men who want to work with children in an intimate setting like a daycare are probably nonces, but the majority of people have never paid attention to things like this and are always surprised Pikachu when it happens.