If you are an employer, your employees can increase your liability by taking detours while driving company vehicles. If your employees are still on company time, and have an accident or suffer a loss, you as the employer may be responsible to third parties for the resulting damages.
The reason for this level of liability is because when an employer has employees, there is a formal relationship or contract that the employees will work for and represent the employer. Usually, when an employee is hired, the employer will go over the rules and explain what is expected of the employees. The employers will also tell the employees about behaviors that are prohibited. The relationship is called an agency relationship. It is a variation of a “master” and “servant” relationship from older times. This is not to say that employees were servants in the larger sense, it just meant that at law, the employees were expected to perform services or do what the employers told them to do. The agency part of the relationship is important, because it determines the authority that the employees have to represent the employer to others. If you are my employee, you stand in my shoes when you are dealing with others, and in that way you do represent me and my business. That is why it is so important that employees act accordingly and appropriately when they are at work, either in the office setting, or out of the office itself.
For example, imagine you are a caterer, and own a catering company. It is Tuesday, and your delivery driver is sent to deliver a wedding cake to a hotel, for an afternoon wedding. If the driver detours to go to the car wash, to “make the van all spiffy,” before delivering the cake, there may be problems. If that employee then has an accident there, you (as the employer) may be liable for the actions of that employee. What is important to understand here is that there may be liability to the employer, even if it wasn’t his idea to go to the car wash before delivering the cake. Remember, the employee is acting as the representative of the employer. And any decisions, good or bad that the employee makes, may come back to bind the employer to liability to third parties.
Let’s try this scenario another way. Let’s say that you are not the employer, and are instead just a private citizen, going to get your car washed at the car wash. Unfortunately, you also have a cake in the back seat. In fact, you are carrying your own cake to your own wedding, and the pizza delivery driver, who is in a random car to your left, hits your car at the car wash, toppling your cake creation. Who is at fault? The employer of the pizza delivery driver may have some liability for the loss, if the driver is still on the clock.
Why do we need to know if the driver is on the clock or not? The liability might shift away from the employer, if the employee was off the clock, on his or her own time. If you are on your own time, you are not an employee per se, but rather acting as your own agent. This liability shift might go back towards the employer again if the employee is in a company car. As you can see, there are many factors that will determine liability in a case like this. If this sounds confusing, you will want to seek the advice of an expert. Call the liability experts at Ledger & Associates at 1-800-300-0001 or email us at www.ledgerlaw.com. We are available to answer your questions.
