Our office manager occasionally runs errands during the day such as delivering something to a customer or picking up lunch for a meeting. We reimburse her at the IRS rate for mileage. Yesterday, on her way home, she rear-ended the car in front of her causing substantial damage. She has asked for the company’s insurance information. We told her the company is not liable because we are not liable for anything that happens during her normal commute. Are we on solid ground? We are in California.
It depends on whether she is expected to have a car available to her for these job related errands. Several recent California cases illustrate factors you will need to consider.
The Going and Coming Rule
Generally speaking, an employee is not acting within the scope of their employment (and therefore, the employer is not liable for their actions) while they are going to or coming from work. However, courts will make an exception to this rule if the employer will realize an incidental benefit from the employee’s commute beyond the ordinary benefit of simply having the employee at work. These exceptions fall into two categories: the required-vehicle exception, and the special-errand exception.
The Required-Vehicle Exception
Under the required-vehicle exception, an employer is liable where an employee is required to use their vehicle to benefit the employer. The requirement for use can be as clear as an express condition of employment, or as nebulous as an employee making the vehicle available for employment purposes and the employer relying on such use.
In Lobo v. Tamco, 182 Cal.App.4th 297 (2010), a metallurgist was driving home from work in his personal car when he struck and killed a deputy sheriff. His job description required him to use his car to visit customers, but he only used it for that purpose a few times in the two years prior to the accident. He was reimbursed for mileage for such trips. Despite the infrequency with which the employee used the vehicle for work purposes, the fact that the employer required such use and derived an incidental benefit from its availability was enough to trigger employer liability.
In Moradi v. Marsh, 219 Cal. App. 4th 886 (2013), an insurance salesperson left work for the day and began a series of personal errands including stopping for frozen yogurt and attending yoga class. As she entered the yogurt store parking lot, she hit and injured a motorcycle rider, who subsequently filed suit against both the employee and the employer. The employer argued that under the going and coming rule, she was not in the course and scope of employment because the accident took place during her normal commute and while she was running personal errands.
The Court of Appeals rejected this argument finding that an exception to the going and coming rule existed where an employee’s job duties require frequent use of her car during the day. Because an employer which requires an employee to have a personal vehicle accessible to them for job-related travel derives a benefit from the employee having the vehicle at work, the employer is liable for accidents that occur while the employee is bringing the vehicle to and from work. Furthermore, the Court held that the stop for yoga class and yogurt was not a significant enough deviation from the employee’s commute to defeat employer liability.
Major deviations from a normal commute are generally sufficient to take the employee out of the scope of employment, and to therefore negate employer liability. In Halliburton Energy Services, Inc. v. Department of Transportation, 220 Cal. App. 4th 87 (2013),an employee was involved in an accident while driving a company vehicle. The employee had traveled approximately 140 miles from work to help his wife purchase a vehicle and to eat dinner with his family, and the accident occurred on his return trip to work. He had not traveled home at any point on his trip. The court found that he had substantially deviated from his normal commute and the employer derived no incidental benefits from the employee’s trip. Therefore, Halliburton had no liability for damages arising from the accident.
The Special-Errand Exception
The second important exception to the “going and coming” rule is the special-errand exception, which holds an employer vicariously liable for accidents occurring while an employee is engaged in a special errand for the employer, including the employee’s commute to or from the special errand.
In Jeewarat v. Warner Brothers, 177 Cal.App.4th 427 (2009),the court held that an employer was liable for an accident which occurred while an executive was returning home from an out of town, three-day business conference. The executive was on his way home from the airport when he struck three pedestrians, killing one of them.
While the trial court had granted summary judgment for the employer, holding that the executive was not acting in the course and scope of his employment under the going and coming rule, the appellate court reversed, relying on the special-errand exception.
Because he was returning home from a business trip, the employee in Jeewarat was acting within the scope of his employment when he killed one person and injured two others. Therefore, the employer was liable for the employee’s actions.
Special errands can occur when:
An employee travels on business trips. The special errand does not end until the employee returns home or deviates from the commute for strictly personal errands.
An employee goes on a business errand for their employer, leaving from the workplace and returning to the workplace.
An employee is called to work for a special task at an irregular time. The entire commute to and from work is within the scope of employment.
An employee runs an errand for the employer after work. The entire trip to the errand and then to the employee’s home is within the scope of employment.
As you can see from the cases described above, there is a substantial risk that your insurance policy will pay for the accident depending on the facts surrounding her use of her vehicle at work. Steps you can take to minimize the likelihood that the company is liable in the future include having a company vehicle available for errands (or a rental vehicle contract), use delivery services or messengers for lunch and office supply deliveries, and enact clear policies as to when employees should be asked to use their personal vehicles. Consider reviewing driving records and the insurance policies for those individuals you select to drive on company business and prohibit personal errands while in company vehicles. These steps may help determine liability for non-company related errands and minimize liability if it exists.