EMPLOYER HEADS-UP: Be Aware of Company Policies Regarding Usage of Personal Vehicles by Employees

Author: Kimberli Raines

Last year, the California Court of Appeal held that an employer can be liable for an automobile accident involving an employee which occurs after the work day was completed and when the employee is running personal errands.

Generally, under the “going and coming’ rule, an employer is not liable for an employee’s actions during the employees daily commute to and from work in a personal vehicle. In Moradi, the employee left her office in downtown Los Angeles and was on her way home from work. She planned to stop at a yogurt shop and attend a yoga class, both near her home. On her way to the yogurt shop, the employee struck a motorcyclist. The plaintiff-motorcyclist sued both the employee and the employer. The employer prevailed on a summary judgment motion, arguing that the employee was “neither at work, nor working, nor pursuing any task on behalf of her employer, but was pursuing personal interest.”

However, on appeal, the Moradi court reversed the decision, holding that the going and coming rule is inapplicable because of the “required vehicle” exception to the rule. Under the required vehicle exception, the coming and going rule is inapplicable if:

  1. use of a personal vehicle is an express or implied condition of employment
  1. the employee has agreed, explicitly or implicitly, to make his personal vehicle available as an accommodation to the employer and the employer has reasonably come to rely upon its use and expects the employee to make the vehicle available on a regular basis while not making it as a condition of employment.

In Moradi, the individual defendant employee was a salesperson for an insurance broker. The insurance broker required the employee, per company policy, to use her personal vehicle for business travel. The employee frequently used her personal vehicle for work-related purposes such as driving to presentations, meetings with clients and prospective clients, following leads, driving co-workers to company-sponsored events, and driving to educational seminars. The employee used her vehicle regularly for work-related purposes from two to five times per week.

After finding the coming and going rule inapplicable, under the facts presented, the Moradi court subsequently held that the employer can be liable under the traditional course and scope of employment analysis. First, the planned stops for yogurt and yoga 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. Second, the planned stops did not constitute an unforeseeable, substantial departure from the employee’s commute. Finally, the planned stops were not so unusual or startling that it would be unfair to include the resulting loss among the other costs of the employer’s business.

Employers should first establish in-house policies and decide whether they expect employees to use personal vehicles.

As a result of Moradi, employers who require their employees to use their vehicles in the workplace should assess their liability coverage to ensure employee accidents are covered. If employers require employees to use their personal vehicles, they should also ensure that employees are reimbursed for work-related costs and mileage, but not for general commute time or other non-work related driving expenses.

ABOUT THE AUTHOR: Kimberli C. Raines is senior counsel at Tyson & Mendes, LLP. She specializes in the defense of personal injury, wrongful death, insurance bad faith and general liability matters. Contact Kimberli at 858.263.4134 or kraines@tysonmendes.com

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