Does Your Employee Drive His Own Vehicle While Working For You? Requiring The Use Of Personal Vehicles For Company Business Could Mean Expanded Liability for Employers

If your employees regularly drive their personal vehicles on Company business, pay particular attention to the case of Moradi v. Marsh USA, Inc. The employer, Marsh USA, Inc. (an insurance broker), required its employee (an insurance salesperson), to use her own vehicle throughout the workday to visit prospective clients, make presentations, provide educational seminars, follow leads, and to transport company materials and co-employees to work-related destinations.

At the end of a regular workday, the employee left her office. She decided to stop for frozen yogurt and to take a yoga class on her way home. As she made a left turn into the shopping center to buy her yogurt, she collided with a motorcyclist. The motorcyclist was severely injured and sued the employee and the company, claiming that the company was liable under the doctrine of respondeat superior.

The California Appellate Court held that the employer could be liable in such circumstance, ruling, “Because the employer required the employee to use her personal vehicle to travel to and from the office and make other work-related trips during the day, the employee was acting within the scope of her employment when she was commuting to and from work. The planned stops for frozen yogurt and a yoga class on the way home did not change the incidental benefit to the employer of having the employee use her personal vehicle to travel to and from the office and other destinations. Thus, under the “required vehicle” exception to the “going and coming” rule, the employee was acting within the scope of her employment at the time of the accident, and the doctrine of respondeat superior applies.”

As a practical matter, it would almost impossible to prevent employees from using their vehicles for work purposes at any time – at a minimum, most employees use a personal vehicle to commute to and from work. Fortunately, mere commuting or even an out-of-the-ordinary, occasional request that your employees use a personal vehicle to run an errand for your business would most likely be insufficient to create vicarious liability under the Moradi case. However, if you require your employees to have a personal vehicle available to complete their assigned tasks, you may be creating a “required vehicle exception.”

To minimize liability exposure, we would advise California employers to do the following:

  • Do not list “driving a personal vehicle for work” as an essential job function on a job description or application;
  • Minimize the number of employees who are required to have a personal vehicle available for use on company business;
  • Inform your employees that they are not required to have a personal vehicle in service on your behalf to complete their job assignments;
  • Require employees to obtain written permission from the company before they drive a personal vehicle on company business;
  • For employees who have permission to drive a personal vehicle on company business, ask that they provide the company with the declaration page from their personal automobile insurance each year to confirm adequate coverage (Note: if you require employees to carry more coverage than the state minimum, you may have to pay the excess premium cost);
  • Explicitly state that the company is not responsible for any damage, parking tickets, equipment violation citations or moving violations that occur while the employee is operating a personal vehicle on company-related business (helpful, but not dispositive); and,
  • Implement a “Personal Vehicle Use” policy defining, what your company will allow and reserving the company’s ability to revoke any employee’s right to drive a personal vehicle on company business.

For questions about employees’ use of personal vehicles for work purposes, or any employment law issue, please contact any of our employment attorneys at LightGabler.