Employer Protection Plan From Vicarious Liability

Written by Brian Clarry, Esq.

Edited by Bill Pfund, Esq.

“[C]ommon-sense is opposed to making one man pay for another man’s wrong.”

~Oliver Wendell Holmes, Jr., Agency, 5 Harv. L. Rev. 1, 14 (1891).

Sadly, this is not the law in Virginia.

If you own (or insure) a business that requires your employees to do some form of traveling, whether in a company vehicle or their own, it is important to be aware of your potential liability and take proactive measures to reduce risk.

Whether you are a traditional freight carrier, a home services company, a residential or commercial cleaning company, a medical transporter, a provider of roadside assistance services, or even a food truck owner—it is necessary to prepare a plan for handling liability arising out of motor vehicle accidents involving employees.

Plaintiffs will sue you, the entity-employer, under a theory of “respondeat superior,” which is a form of vicarious liability that holds an employer responsible for the wrongful acts of its employees, if the wrongful act was done in the course and scope of his or her employment.

The question, then, is whether your driver was in the scope of his employment when involved in a motor vehicle accident (or other allegedly wrongful conduct).

Obviously, the answer to that question depends on the driver’s itinerary. See Bryant v. Bare, 192 Va. 238, 245 (1951) (“In any case, it has been said to be clearly impossible to formulate a general rule governing all cases…”). The Virginia Supreme Court called it a “vexatious and perplexing” task to determine whether an employer should be held liable based on his employee’s negligence. Kidd v. De Witt, 128 Va. 438, 442-443 (1920).

Nonetheless, the Court has provided this generic guide:

Generally, an act is within the scope of the employment if (1) it was expressly or impliedly directed by the employer, or is naturally incident to the business, and (2) it was performed, although mistakenly or ill-advisedly, with the intent to further the employer’s interest, or from some impulse or emotion that was the natural consequence of an attempt to do the employer’s business . . . .

Kensington Associates v. West, 234 Va. 430, 432 (1987) (emphases added).

The Court has also described vicarious liability as existing if the employee’s act arose out of the “very transaction, or service or task, that the employee was being paid to perform. This is true, although the employee was using the master’s property and the injury would not have been caused without the facilities afforded the employee by reason of his relation to his employer.” Majorana v. Crown Cent. Petroleum Corp., 260 Va. 521, 526-527 (2000) (internal citations omitted).

In a recent case, the Court determined: “[The employee must have committed the tort while actively engaged in a job-related service. Respondeat superior liability cannot be established merely by showing that the employee was ‘on the clock,’ using the employer’s property, or on the employer’s premises at the time of the alleged tortious acts or omissions.” Parker v. Carilion Clinic, 2018 Va. LEXIS 158, *21 (2018).

In the context of your employee using a company vehicle or travelling for work, factors have developed over time. It’s more likely your driver was in the scope of his employment if driving a company vehicle, the incident occurred during normal work hours, the employee was being paid for that time or was in some fashion promoting the company’s interests, or the employee was acting under specific direction.[1]

It’s less likely if your employee was doing something purely on his own accord for his own benefit, or if he was doing an activity that he was not hired and paid to do, or if he was simply commuting to or from work.[2][3]

Here’s the kicker: You, not the Plaintiff, will likely have to show that your driver falls into the “less likely” category mentioned above. Once a Plaintiff establishes merely that the driver was employed by you at the time of the accident, a rebuttable presumption arises that the driver was acting in the scope of his employment. See Crowell v. Duncan, 145 Va. 489, 501(1926); McNeill v. Spindler, 191 Va. 685, 694 (1950). It is then the employer’s burden to produce facts and evidence that the employee was not acting in the scope of his employment when the accident occurred. Kavanaugh v. Wheeling, 175 Va. 105, 108 (1940).

Establishing that an employee was outside the scope of employment at the time of the incident can be a daunting task if you are unprepared. But there are several steps employers can take to not only rebut the presumption in the course of litigation, but also to more effectively value a claim at an early juncture, thereby reducing exposure and costs of litigation.

  1. Utilize GPS tracking in all company vehicles. Here is a buyer’s guide: https://www.businessnewsdaily.com/8290-gps-fleet-tracking-guide.html. For a Virginia-based alternative, go to https://www.trackyourtruck.com/. In addition to knowing when and where your drivers are, tracking systems also offer a host of other logistical and efficiency benefits. Taking this step not only helps solve thorny evidentiary issues at trial, it also helps to ward off frivolous “negligent entrustment” and “negligent supervision/retention” claims, which are direct torts against the employer.
  2. Establish clear protocols in company vehicle use agreements that specify what activities are and are not compensated activities. The more detail and specificity the better in terms of narrowly defining what a “job” or a “dispatch” or a “call” or an “assignment” entails. These protocols must be clearly explained to employees.
  3. Use an established, consistent, and preferably cloud-based system for documenting employee activities. This should go beyond job assignments to include ancillary employee activity, such as meetings at a company site as well as drivers’ trips for vehicle repairs. Proper documentation is essential.

These steps are critical because they provide evidence, and these issues are often determined on the basis of evidence, rather than the law. Having this information, and being able to finding it efficiently, is an enormous tool in preventing the time drain involved in dealing with these issues haphazardly. These steps may seem unnecessary, until you are hit with a lawsuit years down the road arising from an obscure accident of which you have no personal knowledge, that was allegedly caused by a now-former employee whose whereabouts are unknown. It will be your burden to produce evidence that you should not be held liable because that former employee was outside the scope of his employment when the incident occurred. Without adequate preparatory steps taken on the front-end, good luck.

[1] As to this last factor, the Court has distinguished between a chauffeur being dispatched to a specific job vs. a street-side taxi driver being at the will of ride-hailing customers.

[2] See Smith v. Landmark Commun. Inc., 246 Va. 149, 153 (1993) (“The mere act of travelling to work was not a natural incident of [the employer’s] business,” which was delivering newspapers). See also Bryant v. Bare, 192 Va. 238, 245 (1951) (“the relation of master and servant is not restored until he has returned to the place where the deviation occurred, or to a corresponding place, some place where in the performance of his duty he should be.”); Master Auto Service Corp. v. Bowden, 179 Va. 507, 513 (1942) (“He was no more engaged in his master’s business while returning to, than while departing from, his zone of duty.”).

[3] It should be noted that the law is similar, but not the same, in the context of a Workers’ Compensation claim. See https://www.kpmlaw.com/4087-2; https://www.kpmlaw.com/asleep-at-the-wheel-when-does-exhaustion-while-driving-arise-out-of-the-employment

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