One of the hazards of having employees use vehicles to perform work for you is possible respondeat superior liability. Unlike some of the other liabilities of having employees use your vehicles, you face respondeat superior liability even if your employees get into accidents while driving their own vehicles. In fact, you'll find that respondeat superior liability can come into play after any unfortunate incident — not just auto accidents — where an employee has harmed someone else or someone else's property.
Respondeat superior liability explained
The phrase respondeat superior is a Latin term that lawyers sometimes use. The term may be "translated" as:
If your employee,
- is at fault for an accident (or an incident); and
- was doing work for you at the time of the accident/incident (lawyers will often refer to this as "acting within the scope of employment"); then
- you may be held liable for damages arising from the accident/incident.
The first reaction many people have after respondeat superior is explained to them is to exclaim something like, "That doesn't sound fair! Do you mean to tell me that if a painter runs a red light on the way to do a job and gets into an accident that the painter's employer is liable? A boss can't sit in the passenger's seat next to every employee and tell them how to drive! What will those lawyers think of next . . . "
Why it's the law. The idea of respondeat superior may make more sense to you if you think about this: suppose the painter in our example showed up at your house and instead of painting the house white, like you ordered, painted it in a nice florescent lime? Would you be more willing to hold his employer liable now? Probably. Yet a boss can't always afford to sit and watch an employee brush each stroke of paint onto a building. Clearly, at some point the law has to draw a line. In most states, this "line" is that employers will be held liable for wrongful acts committed by their employees if those acts were committed within the scope of employment.
Employer defenses against respondeat superior liability
The key to reducing your liability under respondeat superior is found in the words "within the scope of employment." (Some courts prefer wording like "furthering a purpose of the employer.") Thus, defending a respondeat superior claim typically involves one of the following options:
- Establishing that an employee committed an intentional wrong, which makes it unlikely that he or she was acting within the scope of employment. Be careful about relying too much on this type of defense. Most people would say slugging a customer is intentional, that it's wrong, and that it probably couldn't serve any purpose for a business owner. But think about a bouncer working in a bar and you realize that such issues aren't always clear. And while running a red light is arguably an intentional wrong, if it is done to get a few gallons of paint before the hardware store closes, it unquestionably creates a liability issue.
- Establishing that the employer had a policy prohibiting employees from doing whatever it was that the employee was doing that resulted in an accident. This defense usually works best, but it has some obvious limitations. You can't get away with making a policy against something after it has happened. And a "policy" against "skidding out of control when driving a company vehicle" would probably not fly with a court if you tried using that as a defense either. However, it's possible that a vehicle policy requiring employees to obey all traffic laws at all times — even if it means arriving at a job late, or losing some business — could be useful in the case where an employee runs a light.
Moreover, a policy restricting or prohibiting personal use of your vehicles may be useful. Many accidents occur in such circumstances. After all, employees who are off duty may be more likely to have been drinking. Or they may try to do something with a vehicle that the vehicle was not intended to do, such as moving a dinette set and chairs with a plumbing supply van so that the rear doors are left wired shut with a chair ready to fall out of the back.
- Depending on good vehicle insurance to cover damages resulting from accidents and unfortunate incidents. In many respondeat superior cases, this may be your most viable option because accidents do happen while employees are performing duties within the scope of their jobs. While you can't always avoid such accidents, the right insurance coverage can go a long way to avoid a devastating financial loss.