Who is Liable When an Employee is a Negligent Driver?

  Often employers require their employees to operate personal automobiles during the course of the business day.  In our mobile world, it is often imperative that an employee utilize his own personal automobile to travel and service business clients.  Unfortunately, employees are occasionally involved in motor vehicle accidents.  It is important to know in New Jersey that when an employee is operating his own motor vehicle during the course of the business day, his negligence may be imputed on his employer under certain circumstances.
  The issue of whether an employer can be held liable for an employee’s negligence during the operation of a personal automobile was addressed by the Supreme Court of New Jersey in Carter v. Reynolds, 175 N.H. 402 (2003).  In Carter, an employee was involved in an automobile accident on her way home from work.  Her job required her to work in the firm’s Neptune, New Jersey, office and also visit clients.  Since the firm had no office automobile available to her, the employee was required to use her own vehicle for travel, with business mileage reimbursed by the firm under IRS guidelines.  With respect to billing, on the days that the employee traveled from her home to a client she would begin billing when she arrived at the client’s destination.  On the days that she went directly home after meeting with a client she would stop billing when she left the client, not when she actually arrived at home.  If she had to return to the office after meeting with a client, she would bill for her travel time to the firm.
  On the date of the subject accident, the employee spent the morning at the firm and then traveled to a client location.  She worked the remainder of the day at the client’s location and then traveled home.  She was only reimbursed for mileage from the client location to her home office.  However, on this day, she went directly home after visiting the client.  On her way home, she was involved in an automobile accident.  In light of the accident, the injured party filed an automobile negligence action against both the employee and her employer alleging that she was in the scope of her employment at the time accident even though she was traveling home.  After reviewing the case, the Supreme Court of New Jersey agreed with the plaintiff that under the circumstances of the case the employee was acting within the scope of her employment thus making the firm liable under the doctrine of  respondeat superior (Latin for let the master answer).
  Generally, an employee who is going to or coming from his or her place of employment is not considered to be acting within the scope of employment.  This is known as the “coming and going rule.”  However, the Supreme Court recognized that the employer can be held responsible if (1) the employee is engaged in a special errand or mission on the employer’s behalf; (2) the employer requires the employee to drive his or her personal vehicle to work so that the vehicle may be used for work-related tasks; and (3) the employee is “on call.”  This so called “dual purpose” exception to the general rule covers cases in which, at the time of the employees’ negligence, he or she can be said to be serving an interest of the employer along with a personal interest.  New Jersey has adopted this dual purpose exception which provides a basis for employer liability when an employee is furthering employer’s business as well as his or her private interest.  It makes sense that these exceptions to the going and coming rule exists.  Unlike ordinary commutation in which an employer really has no interest, each of the noted exceptions involves some control over the employee’s actions and a palpable benefit to be reaped by the employer.
  In our highly mobile society, it is important for employers to understand potential liability that they undertake when permitting their employees to operate personal automobiles during the course of their business day.  As a result, we suggest that employers analyze how employees are traveling and make sure they have the proper insurance coverage.     
 
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Laurence T. Bennett is a Weber Gallagher Partner based in the firm’s Mount Laurel office. He defends clients against property and casualty claims. He can be reached at lbennett@wglaw.com.  Darren C. Audino is an associate in the Weber Gallagher’s Mount Laurel office. He defends clients in general liability and commercial transportation matters. He can be reached at daudino@wglaw.com.