www.arnstein.com1

When Is The Employer Liable For The Acts Of The Employee?

Thadford A. FeltonARNSTEIN & LEHR LLP

120 SOUTH RIVERSIDE PLAZA | SUITE 1200CHICAGO, ILLINOIS 60606

P 312.876.6934 | F 312.876.0288tafelton@arnstein.com

Many businesses provide services to a customer at that customer’s home or place of business. These services are provided by individual employees who most likely travel to the customer in a service

vehicle provided by the employer. Obviously, with one’s employees continually on the road and traveling between customers, there is a risk that an accident will occur. In addition, the employer has to rely on the employee to conduct himself appropriately at the customer’s house or place of business. But what happens if the employee has an accident while driving the employer’s vehicle or commits a crime at the customer’s house or place of business. Under what circumstances might you, the employer, become liable?

Generally, an employer can be held liable for the acts of its employees, including negligent, willful, malicious, or even criminal acts of its employees, when the acts are committed by the employee in the “scope of employment.” Unfortunately, no precise definition has been given to the phrase “scope of employment,” as each instance must be evaluated based on its specific facts. However, the following criteria are generally evaluated to determine whether an employee’s actions were in the scope of his or her employment: (1) is the action engaged in by the employee of the type that the employee is employed to perform, (2) does the action occur substantially within the time and space limits authorized by the employer, and (3) is the action undertaken, at least in part, by a purpose to serve the employer.

In Illinois courts recognize a distinction between the acts of an employee in the pursuit of personal business unrelated to employment for which an employer is not liable and the acts of an employee that deviate from work related tasks for personal reasons that are sufficiently related to employment for which an employer is liable. In other words, where an employee’s deviation is exceedingly marked and unusual, the employee may be found to be acting outside the scope of employment and the employer may not be liable. Conversely, where an employee’s deviation is slight and not unusual, a court may find that the employee was still executing the employer’s business and the employer may be liable.

So, what does all of this mean? Ordinarily, if the employee is involved in an accident while going to or from his place of employment, the accident will not be said to arise out of and in the course of employment. However, this is not true where the employee’s trip is determined by the demands of his employment. Where the employee is a traveling employee, the test for scope of employment is “the reasonableness of the conduct in which the employee was engaged and whether it might normally be anticipated or foreseen by the employer.”

Where a driver deviates from the route that the driver would normally follow in using the vehicle for the employer’s business and goes off on some personal business unrelated to employment, the employer is

www.arnstein.com2

usually not liable for injuries caused by an accident due to that employee’s negligence. However, when the employee turns back to the business at hand, i.e., reenters the scope of employment, the employer will once again become liable for injuries that result from the employee’s negligence. Similarly, where an employee deviates slightly from the usual or most direct route for personal reasons which are sufficiently related to employment, the employer will still probably be liable for injuries that result from the employee’s negligence.

A similar type of analysis is undertaken to determine an employer’s liability if an employee commits a crime at the customer’s house or place of business. Was the employee acting within the scope of employment and was the employee’s criminal act foreseeable by the employer? While even the criminal acts of an employee may fall within the scope of employment, if the employee’s actions are different from the type of acts he is authorized to perform or were performed purely in his own interest, he has departed from his scope of employment. Moreover, an employer is not responsible for acts which are clearly inappropriate to or unforeseeable in the accomplishment of an authorized result. Serious crimes are generally unforeseeable because they are different in nature from what employees are expected to do, but if an employer has knowledge that an employee is prone to violence, the employer cannot turn a blind eye to that risk.

The bottom line is that an employer has an obligation to use reasonable care in hiring an employee. An employer should not entrust a vehicle to an employee who the employer knows, or should have known, is incompetent. Also, an employer should not hire an employee that the employer knows, or should have known, was unfit for the job in the sense that the employment would place the employee in a position where his or her unfitness or criminal propensities would create a foreseeable danger to others.

The best way for an employer to guard against this type of liability is in the hiring process. You should have job applicants consent to a background check on the employment application form. Make sure that this written consent also allows the employer to conduct subsequent background checks throughout the course of employment. However, before you deny employment or terminate an employee based on the results of a background check, consult an attorney because federal and state laws place some restrictions on the use of background checks and criminal convictions. In most cases, the results of these background checks will be negative, but they can help prevent liability if the employee later does something wrong. Also, keep in mind that information that you receive from other sources besides background checks may also affect whether or not an employer will be liable for the bad acts of an employee.