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Brooks Schuelke
Brooks Schuelke
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When is a company liable for a wreck caused by its employee?

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This question came up on another part of the Injuryboard site today, and I wanted to try and answer the question for others. In Texas, there are several situations where a company is liable for a wreck caused by its employee.

The hardest to pronounce, but easiest to prove, is respondeat superior. In Texas, an employer is liable for injuries caused by its employee when the wreck happens while the employee is in the course and scope of his employment. That’s it. Not a hard standard to meet. There are a bunch of cases debating the fringes of what course and scope includes (driving to or from work; employee detours from his business driving to conduct a personal errand; etc.), but other than the fringes, this is a pretty easy question and the easiest way to establish liability. As an aside, if the employee is in a company owned car, then there’s a presumption that he was acting in the course and scope of his employment while the employee was performing his job and while the employee was driving to and from work.

In addition to the respondeat superior claim where an employer is liable for the conduct of its employees, there are also important related claims where the employer may be liable for its own conduct. The first instance of that is negligent entrustment. Under that theory, an employer can be liable for entrusting a vehicle to an employee that the employer knew or should have known was an unlicensed, incompetent, or reckless driver. These usually occur in situations where the driver has a history of tickets, wrecks, a drinking problem, or something similar.

The next theory is negligent hiring, retention and supervision. In Texas, an employer has a duty to investigate its employees’ skills before hiring them. The claim here is similar to a negligent entrustment theory, but due to some legal technicalities, the negligent hiring, retention and supervision claims are much preferred to the negligent entrustment claims. But the same type of background check (driving records, calling previous employers, etc) is all relevant.

The last common claim is the negligent training claim. Again, in Texas, if an employer knows that a training program is necessary to protect others, but fails to exercise reasonable care in training its drivers, then the company is liable for the damage caused.

Now, one question you may ask yourself is, "If the company is already vicariously liable because the driver was driving in the course and scope of employment, why do negligent hiring or negligent entrustment or negligent training claims matter?" And the answer is punitive damages.

These additional theories are important for punitive damages for two reasons. First, when the company has a driver that it knows drives drunk, for example, then a jury will not only award punitive damages against the driver, but the jury will also likely award punitive damages against the company. The independent acts of negligence are important to give a jury more ways to award punitive damages.

But maybe more importantly is that these claims affect what evidence the jury hears. If you have a simple negligence claim where the employee driver caused the wreck and the injured person is only claiming that the employer is liable for the damages based on respondeat superior, then there are a lot of pieces of evidence not admissible. For example, if you know that the employee driver has a long history of accidents and tickets, those likely don’t get into evidence in the main part of the typical car wreck trial. But if you claim that the employer was negligent for not investigating the driver’s background and finding out about those tickets and accidents, then that becomes relevant and admissible and the jury gets to hear about it. And you can be sure that the jury hearing that type of information will make a big difference in the case. So these claims, with a claim for punitive damages, need to be pursued to help the case.

So that’s a general overview. There are other specific rules that I’m more than happy to answer if you leave a comment. There are also specific answers for trucking cases, but that might be another post.