PERILS OF EMPLOYEES USING COMPANY CARS

It is a fundamental concept of law that an employer can be held liable for the negligent acts of his employee committed while the employee is "within the scope of his employment." (For the purposes of this article, the term "employee" does not include "independent contractor.") This fundamental concept began long ago with the idea that, during work, the employer has the ability to exercise control over the physical activities of the employee. It naturally followed that, because of this element of control, the employer (i.e., one who has chosen to perform his work through the hiring of others) should be held liable for the negligent acts of his employees. Indeed, with the growth of large enterprises starting in the 19th Century, it became increasingly apparent that it would be unjust to permit an employer to gain from the cooperation of others without there being some corresponding responsibility for the mistakes and errors of judgment of those working for his benefit.

Thus, the operative question often becomes: When is an employee "within the scope of his employment?" When there is sufficient evidence to support either conclusion, the question is always a question of fact to be determined by a jury (as opposed to a question of law which is determined by the judge). Several factors are usually considered, including whether the conduct was actuated, at least in part, by a purpose to serve the employer, whether the conduct occurred substantially within the authorized time and space limits, whether the conduct is of the kind the employee was employed to perform, and whether the instrumentality by which the harm is done has been furnished by the employer to the employee. It is this last factor (i.e. whether the employer furnished the "instrumentality" by which the harm is done) which has particular significance in Oklahoma.

Many employers permit their employees to drive the employer's vehicle, not only during business hours, but while the employee is allegedly "off duty" as well. These employers usually rely on the belief that as long as the employee's use occurs after business hours, the employee will not be considered to be "within the scope of his employment," and thus the employer cannot be held liable for the employee's negligent acts. However, reliance on this belief could be costly if adequate preventive measures are not taken.

In this state, evidence that an employee was driving his employer's vehicle at the time of the accident establishes a presumption that the employee was acting within the scope of his employment. However, this presumption is rebuttable by the employer; once the injured party proves that the employee was driving his employer's vehicle, the burden then shifts to the employer to come forward with evidence to the contrary which is sufficient to overcome this presumption of law (which would then create an issue of fact for determination by a jury). Although lacking in specifics, the Oklahoma Supreme Court has characterized the level of evidence necessary to dispel the presumption as "some evidence."

For an example of a case in which this "presumption" would likely be easily rebutted, imagine an employer who never has his employees work on Sunday (including never even having his employees run "errands" for him on Sunday). An accident occurring in the middle of the day on a Sunday is strong evidence that the employee in this particular situation was not within the scope of his employment.

Thus, an employer who permits employees to use company vehicles while the employees are presumably "off duty" should protect himself by making certain that objective, tangible evidence exists to prove that the employees are indeed "off duty" and not intending to serve the employer. A primary way for an employer to do this is to establish written policies as to the working hours, routes used, and authorized conduct of the employees while one the job, and to do everything possible to ensure that the employees comply with these policies. In short, the more pieces of information which an employer is able to supply which support the claim that the employee, who was using the employer's vehicle, was off-duty at the time of the accident, the easier it will be to rebut the "presumption" which arises in Oklahoma. Employers should also ensure that they have adequate liability insurance to cover any claims made by third persons who are involved in a collision with an employee who is driving a company car.

It should be noted that the employee, as the person who actually causes the accident, can be held liable as well. Thus, the injured party may sue both the employee and the employer. However, the injured party is entitled to only one recovery. If the recovery is from the employer, then the employer has a right of indemnification against the employee.

This "Legal Update" is provided as a public service of Garvin, Agee, Carlton & Mashburn. It is intended to provide general information about the law, and is not a substitute for the advice of an attorney as to specific facts and circumstances. Anyone having any questions regarding the matter contained in this article, or needing advice as to specific facts or circumstances, should contact an attorney practicing in the appropriate area of the law

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