Employer Liability: When The Boss Must Pay

Courts are still trying to decide just when employers are responsible for injuries that are caused by their workers.

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A particularly aggressive Minnesota salesman for National Biscuit Co. had a dispute with a grocer he serviced. He wanted his company's cookies prominently displayed on an easy-to-reach shelf. The grocer preferred to save the location for a variety of cookies from a number of manufacturers. One day, with customers in the store, the salesman lost his temper and began shouting. When the grocer tried to quiet him, the salesman assaulted the grocer, beating him badly. In the subsequent lawsuit, Nabisco had to pay for the grocer's injuries.

In Washington, D.C., a furniture deliveryman got into a dispute with a customer when he came to her home to deliver a mattress and box spring. He demanded that she pay cash before he took the mattress upstairs; she countered that he had to let her inspect the mattress before payment. She also insisted that he take a check. When the customer continued to insist on her rights, the deliveryman assaulted and raped her. The delivery company had no record of such behavior by the deliveryman in the past. Nevertheless, a federal appeals court said that a jury could find that the company had to pay for the victim's damages.

These two cases illustrate the outer limits to which courts will go in requiring employers to pay for the wrongs -- both intentional and inadvertent -- committed by their employees. There are literally thousands of less dramatic examples in law books, however, which help define the basic legal rules of what lawyers quaintly call "the law of master and servant." Simply put, this law governs the issue of when an employer must pay for the injuries and property damage caused by employees.

Scope of employment. In most states, courts decide this issue by first asking whether the employee was acting within the scope of his or her employment at the time of the incident that caused the injury. If the employee was acting within the scope of his employment, courts reason that his acts were of some benefit to the employer. It is therefore fair to impute the employee's liability to the employer even though the employer neither intended nor caused the injury. The "scope of employment" test generally requires a court to examine what the employer hired the employee to do, what warnings were given the employee, and whether the employee was on company business when the accident or assault took place.

A Sears, Roebuck & Co. salesman in Indiana, for example, who worked on commission, went in his own car on his day off to solicit a prospective customer. On his way home after his call, he had an accident and injured another driver. Sears was held liable for the victim's injuries because the salesman was arguably doing his job at the time of the crash, even though he was technically off duty. One piece of evidence that no doubt influenced the court's decision was the fact that the company had paid for the salesman's car mileage on the day of the accident. Also, the salesman had other appointments scheduled for later that day.

By contrast, a New Mexico farmer did not have to pay when one of his farmhands, without a license, had a head-on collision while driving a farm tractor on a road near the farm. The farmer had explicitly told his employees not to drive the tractor. The farmhand admitted that he had been warned and also stated that he knew he was driving illegally. The court therefore found that he was acting outside the scope of his employment, and it did not require the farmer to pay for the resulting damage. Courts often reach similar results when accidents happen while employees are on breaks or have detoured substantially from their assigned duties and routes.

Intentional wrongs. Where intentional acts -- such as the violent assault and rape described earlier -- are concerned, the courts use different legal tests to determine whether the employer must pay. Some courts endorse what is called the "work-relatedness" test. Both the assault and rape discussed above, for example, took place following disputes that were related to duties the employee had been given by the employer. It can be argued therefore, that these assaults were "triggered" by the particular job the employee was doing. In fact, the Washington, D.C. and Minnesota courts both found that the acts at issue could be viewed as workrelated. Courts in Mississippi, California, Illinois, Alabama, Connecticut, and in other states also follow this rule.

Most courts, however, would not make the employer pay if faced with the facts of the assault by the salesman and the rape by the deliveryman. These courts will not hold an employer liable unless it is shown that the employee was "actually motivated" by a business concern of the employer at the time. If Nabisco told its salespeople to "do whatever you have to do to get our cookies on the best shelf" and the salesperson interpreted this to include fighting, for example, these courts might make Nabisco pay for the fight with the grocer. All courts would probably hold liable a security company whose guards used force in the line of duty, since such force is both work-related and one of the understood risks of doing the job.

In a case where no relationship exists between the intentional assault and the job -- when, for example, the salesperson gets into a fight at a baseball game or the deliveryperson assaults someone while on vacation -- courts will not make the employer pay.

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