A recent Texas Supreme Court decision has chilling implications for any company carpooling program that offers an incentive to an employee for driving others. Employers could be held liable for that employee's negligence on the road.
The implications of a recent Texas Supreme Court ruling should make business owners think twice before offering incentives to their employees to engage in ridesharing.
In the decision of Painter v Amerimex Drilling I, Ltd., delivered on April 13, 2018, the Texas Supreme Court found that, where a company paid an employee $50.00 per day to drive a crew of three other men back and forth between a bunkhouse and a worksite before and after work, the company was liable under the doctrine of Respondeat Superior when the driver caused a car accident. The implications of this opinion may have a chilling effect on company carpool programs.
Respondeat Superior: 'Let the Employer Answer for His Servant'
The Doctrine of Respondeat Superior is a legal theory that allows someone injured by an employee to hold the employer responsible for the employee’s negligent actions while operating a motor vehicle or otherwise, so long as the employee was acting under the employer’s right of control and within the course and scope of his duties. This doctrine developed from English common law and is regularly used to hold companies responsible when their employees cause car accidents while driving on company time.
The 'Coming and Going' Rule
The coming and going rule is an exception carved out by the courts to the Doctrine of Respondeat Superior. Under the coming and going rule, an employer is generally not liable for that actions of an employee while they are coming to work or going home from work (Zurich American Ins. V. McVey). This is because the employee is not yet on the clock on the way to work, and is off the clock after work. Thus, they are still on private time, not company time.
Over the years, some exceptions have been carved out of the coming and going rule. For example, it has been held that where the company provided a company car and/or otherwise required a particular car for use by the employee, the coming and going rule did not apply. (Zurich American Ins. V. McVey). Also, where the employee is running an errand for the employer along the way in the process of coming and going, so that he may be said to be carrying out a special mission for the employer, then the special mission rule exempts him from the coming and going rule (Texas Mut. Ins. Co. v. Jerrols). The dual purpose rule may also exempt an employee from the coming and going rule where the employee is carrying out a task for both his own and his employer’s benefit (Texas Mut. Ins. Co. v. Jerrols).
Liability for Company Carpools
Depending upon what incentives may be offered to the driver, a company could very easily find itself accidentally exempted from the coming and going rule under Painter v Amerimex Drilling I, Ltd. In that case, the company did not require the employees to use the transportation offered. However, they offered one driver $50.00 to transport anyone else who wanted a ride. Thus, all the company really did to become liable was to compensate an employee for driving his own vehicle and allowing others to ride.
Many company rideshares offer one driver a financial incentive to drive other employees to work. While the purpose of this is altruistic rather than profit-motivated, the employee is still getting paid for the same service that was provided in Painter. Offering a financial incentive is what exempted the Painter employee driver from the coming and going rule, and thereby left the employer exposed to liability. Under the law of this case, a company could be responsible for a company carpool accident under the doctrine of Respondeat Superior simply because they tried to motivate employees to help the environment.
Restructuring the Corporate Carpool Policy
Employers may be able to avoid liability by exempting the driver from being an employee by contract. In Bell v VPSI, Inc. and Fort Worth Transportation Authority, a passenger was injured while she was riding in a county-created vanpool program van. The passenger's husband, the driver, contracted with Fort Worth Transportation Authority and VSPI to drive a vanpool van on their way to work. On the way to their workplace, he caused a wreck. In that case, the Court held that a three-way contract between Mr. Bell and the two companies designated him as an independent contractor. As a result, even though Fort Worth Transportation Authority provided the van and compensated him for driving it, they were not liable as his employer.
The Bell case is not entirely instructive on this point because Mrs. Bell did not sue Mr. Bell’s regular employer – she sued the company that he contracted with to drive himself and others to work, and the company that provided the leased vehicle. But a well-crafted company carpool contract that states that an employee is acting as an independent contractor while driving in the company carpool might be sufficient to shield the company from liability for an accident during the carpool. Nonetheless, a business owner would be wise to have company counsel review any written carpool or rideshare policies in light of this case.
In short, Painter is a case that should give companies concern when considering compensating employees for ridesharing regardless of the purpose. A company might find itself liable where it would not have been otherwise simply because an incentive was offered. While a well-drafted contract might exempt liability by establishing an independent contractor relationship, a company would be wise not to gamble on what the appellate courts will do when such a case makes its way there.
If a company wants to encourage employee ridesharing, the safest thing to do is to avoid offering any sort of incentives to the driver, including mileage reimbursement. Lastly, neither ridesharing nor carpooling should be permitted in company vehicles going to and from work.
Disclaimer: This article is intended for educational purposes only and should not be taken as legal advice. Please consult with an attorney licensed in your jurisdiction if you have questions relating to the topic of this piece.