Employer Liability for Employee Car Accident

Employer Liable for Employee Car Accident

I believe most of my employer clients were shocked when I informed them of the Moradi v. Marsh, decision, where a California court of appeal found an employer liable for an employee’s car accident during her commute home.

Interpreting the Moradi case, another California appellate court in the case of Halliburton Energy Services, Inc. v. Department of Transportation, (Oct. 1, 2013, F064888) clarified that when an employee runs a personal errand that is so lengthy as to be unforeseeable, the employer will not be liable for an accident that occurs during the errand.

In the Halliburton Energy Services case, the employee, who  drove a company pickup to and from work, had signed Halliburton’s company-car policy, which stated that he could use the vehicle to drive to and from work and could use the vehicle to run personal errands that happened en route to or from work. Halliburton’s policy otherwise prohibited the employee from using the company car for personal errands.

The employee was, at the time of the accident, assigned to an oil rig located in Seal Beach, California.  He was temporarily staying at a hotel near his worksite.  On the date of the accident, rather than returning to his hotel, the employee drove 140 miles to Bakersfield where he met his wife at a car dealership where he and his wife shopped for a new car. On the drive back to his employment site, the employee was involved in a traffic accident that injured six passengers of another vehicle, which resulted in the passengers’ lawsuit against Halliburton.  The injured passengers asserted in their lawsuit that Halliburton was responsible for the actions of its employee. Halliburton countered that it was not liable, alleging that the employee was acting OUTSIDE the scope of his employment when the accident occurred.

The Halliburton court held that if an accident occurs during a foreseeable stop on the employee’s way home, the employer will be liable; however, if the detour is so lengthy as to be unforeseeable, the employer will avoid liability.  In other words,  in a “substantial “ deviation from an employee’s normal commute, such as the one made by the Halliburton employee, the action cannot be considered an activity in pursuit of the employer’s business and therefore not within the scope of that employment.   The court therefore ruled that Halliburton was not liable for any injuries the employee caused during his detour.

In either case, an employer should avoid providing company vehicles to employees when it is not essential or necessary to do so.  Nonetheless, whether an employee drives a company vehicle or that employee’s personal vehicle, employers can  reduce their exposure to liability by: (i) Creating vehicle use or driver agreements for their use of company vehicles; (ii) checking driving records of employees who drive for work purposes; (iii) establishing and enforcing a crash reporting and investigation process; (iv) developing a strategy to determine the course of action after the occurrence of a moving violation and/or a “preventable” crash; and, (v) promoting safe driving practices.