As the Scope of Employment Expands, So Does Employer Liability

    Generally, employers are only liable for the torts of their employees committed within the scope of employment. Unfortunately, the scope of employment doctrine has never had clearly defined edges, and now, with the blurring of the line between personal and professional lives, employers are exposed to ever-increasing liability. Courts have historically looked to three factors when determining if a tort falls within the scope of employment: (1) whether the employee committed the tort within the general time and place of his employment; (2) whether the employee was performing tasks he was employed to perform when the tort occurred; and (3) whether the employee’s acts were motivated, at least in part, by the employer’s interests when the tort occurred.

    Although the analysis of these factors has the potential to be fact-intensive, employers were historically able to avoid liability in cases which involved vehicle accidents that occurred while an employee was going to or coming from work. Traditionally, an employer was not liable for accidents that occurred while an employee was driving to or from work unless the employee was running a special errand for his employer. Therefore, an employer was not liable for an accident that occurred during an employee’s normal commute. Because of the blurring of the line between personal and professional lives, employers are more often being held liable for accidents that occur during an employee’s normal commute. There are two types of cases in which employers face liability: (1) those in which the accident occurred while the employee was driving a company-provided vehicle to or from work; and (2) those in which the employer provided the employee with a cell phone or PDA which the employee had with him when the accident occurred.

    In the first type of case, employers are being held liable for accidents that occur in a company vehicle regardless of whether the employee is actually performing any work-related tasks at the time the accident occurs. In these cases, courts are presuming that the accident occurred within the scope of employment and are requiring the employer to rebut this presumption in order to escape liability. Even minimal evidence showing that the employer has benefited in any way from the employee’s use of the vehicle may cause a court to deny summary judgment, forcing the employer to either settle or take its chances at trial. For example, if an employee expresses the intention of working after a personal social event where alcohol is consumed, the employer is not likely to be shielded from liability by its general policy against drinking and driving.

    If an employer decides to provide an employee with access to a vehicle, there are several policies employers can adopt to minimize their liability. First, the employer can charge the employee for any personal use of the vehicle. Alternatively, the employer can simply prohibit the employee from using the vehicle for any personal purpose. If an employee does have an accident while driving a company-provided vehicle, the employer should, at minimum, require the employee to submit a thorough accident report in order to help establish whether the employee was driving the vehicle for a purely personal purpose at the time of the accident. Establishing these facts at the time of the accident will help prevent an employee from manipulating his story if he is later disciplined or terminated. An employer must also train it supervisors and investigators to ensure that this information is captured at the time of the accident.

    In the second type of case, courts have imposed liability on employers based primarily on the fact that the employee had a company cellular phone or PDA with him at the time of the accident. Different courts have come to widely different conclusions regarding an employer’s liability for such accidents. In the most obvious of these cases, a court found an employer liable when it provided an employee with a cellular phone, the employee had an accident while driving and using the phone, and the employer had no clear policy against using the phone while driving.

    If courts limited employers’ liability to such situations, employers could easily impose policies prohibiting cell phone use while driving and properly instruct their employees as to the policies in order to shield themselves from liability. However, it is not that simple. Some courts have gone much farther in holding employers liable. In one such case, an employer provided an employee with a cellular phone and pager to keep with him while the employee was "on call." The court upheld a jury verdict that found the employer liable after the employee had a car accident while driving with a blood alcohol content of 0.24 percent. The employee happened to have the cellular phone and pager with him when the accident occurred and claimed to have the devices because he was the contact person if something went wrong at the employer’s restaurant chain. The court upheld the verdict even though there was no evidence that the employee was responding to either a page or call, performing any work-related task, or benefiting his employer in any way by his actions.

    In another case, the employer was denied summary judgment even though it did not actually provide the cellular phone at issue. In that particular case, the employee gave out his own personal cellular phone number to his co-workers for work-related calls. At the time of the accident, a co-worker was calling the employee on his personal cellular phone. The employee did not answer the phone but was involved in an accident at the same time that his phone rang. The court denied the employer’s motion for summary judgment because it found that the employee might have been distracted by his co-worker’s phone call at the time of the accident, which could bring the accident within the scope of employment.

    As these scenarios illustrate, courts have greatly expanded the doctrine of scope of employment. In this subcategory of cases, employers are being denied summary judgment in cases that fall far outside the traditional sphere of liability. Employers may need to rethink their policies on providing employees with these mobile devices. Although frequent contact with employees is often desirable or convenient, employers should strongly consider providing such devices only when actually necessary. In addition, where such contact is absolutely necessary, the employer should enact a strong policy against the use of mobile devices while driving. Although some states already require the use of a hands-free headset while driving, employers cannot rely on a vague policy against breaking the law. Employers should go a step further and enact a policy completely banning the use of such devices while driving, whether or not hands-free. The policy must also make clear that the employee must turn off the mobile device or place it in silent mode while driving to avoid being distracted. Implementing a strict policy should be helpful in shielding the employer from liability, but the policy must be enforced.

    In addition, employers should enact a policy against using or even carrying such devices when the employee is out on personal business or pleasure. While this diminishes the value of a mobile device as a perk because the employee will then likely need to have a personal cell phone or PDA, it does draw the line between equipment used for business versus personal equipment.

    Employers must be aware of the increasing risk of expensive litigation and liability in this technological age. Accordingly, employers should develop conservative policies with respect to providing equipment such as vehicles or mobile devices to their employees and equally conservative policies regarding their use in order to minimize their risk of liability.

Workforce Management Online, December 2008 -- Register Now!