The telephone rings. It is your employee calling. He was just involved in an auto accident, and the other party to the accident was badly injured. Is your business at risk? Will your company be liable for the third party’s injuries? The answers to these questions depend on the circumstances of each individual case. However, some general knowledge of the doctrine of respondeat superior—the doctrine by which employers are held liable for the acts of their employees—can help you formulate a plan to protect your business and guard against the unknown.
Arizona Law
Generally, employers are vicariously liable for the tortious or negligent acts of their employees when their employees are acting within the scope and course of employment. Arizona courts look at the facts and circumstances of each individual case to determine whether an employee who harms another is acting within the “scope and course” of his employment. Although an individual determination is made in each case, the courts consider certain factors which provide some standard guidelines to make these determinations. The factors considered are: 1) whether the conduct is the type the employee is employed to perform or that the employer has the right to control, 2) whether the conduct occurs within the time and space limits authorized by the employer, and 3) whether the conduct furthers the employer’s business, even if the conduct is forbidden.
Past decisions of the Arizona courts also provide insight as to how the courts will interpret the law and apply it to the facts of future cases. For example, the courts have determined that an employee is acting within the scope of his employment when he does any reasonable thing that the employment expressly or impliedly authorizes him to do. In addition, an employee may take a personal break without deviating from the course of the employment if the break is not a major deviation and is not “marked and unusual.”
Protecting Your Business
Many determinations of vicarious liability boil down to an analysis of the degree of control the employer exercises over the employee’s actions and what instructions the employer specifically communicates to the employee. Thus, one way to protect your business from liability when your employees may deviate from their usual work, as when running personal errands during the work day, is to clearly and effectively communicate the specific acts that are permissible and impermissible in connection with the employment. This can be achieved through established policies, training, and employee handbooks.
Having concrete policies in place for your employees will provide important protection for your business. Yet these policies are not a safe harbor. In reality, no matter how much you plan, some accidents are bound to happen while your employees are on the job, and conduct that furthers your business may leave you liable even if it was forbidden. Thus, it is important to protect your business in situations where you may be liable for the tortious or negligent acts of your employees that occur within the scope of their employment or in furtherance of your business. One issue that employers often overlook is that general liability policies often exclude coverage for motor vehicle accidents, especially when employees use their personal vehicles for business purposes. In order to protect your business when an employee is involved in an auto accident, be sure your company’s insurance policy includes a rider for hired and non-owned auto liability coverage.
Employer vicarious liability is a serious issue for your business. An experienced attorney can help you protect your business and plan for the future. If you would like assistance with these or any other employment issues, please contact Titus Brueckner & Levine PLC at 480-483-9600.