Engler v. Gulf Interstate Engineering, Inc. – 7/9/2012

July 11, 2012

Arizona Supreme Court Holds That Employers Are Not Vicariously Liable for Negligence of Employees Driving From Restaurant to Hotel After Work During Extended Out-of-Town Assignment.

An employee was on an extended out-of-town work assignment when, after work one day, he allegedly caused a motor vehicle accident while driving back to his hotel from a restaurant.  Plaintiff, who was injured in the accident, sued the employee’s employer, alleging that the employer was vicariously liable for the employee’s negligence.  The parties filed cross motions for summary judgment as to whether the employee was acting in the course and scope of his employment when the accident occurred and, thus, whether the employer was vicariously liable for the employee’s alleged negligence. 

The trial court granted summary judgment for the employer.  The Court of Appeals affirmed.  The Arizona Supreme Court granted review and affirmed.

An employer is vicariously liable for the negligent work-related conduct of its employees acting within the scope of employment.  To determine the course and scope of employment, Arizona courts consider the extent to which the employee was subject to the employer’s control or right to control when the negligence occurred.  An employee’s tortious conduct falls outside the scope of employment when the employee engages in an independent course of action that does not further the employer’s purposes and is not within the employer’s control or right of control.

Here, the employer did not exercise any control over the employee at the time of the accident.  Nor was the employee serving the employer’s interests when the accident occurred.  Accordingly, the employer could not be vicariously liable.

The Court declined to apply principles from worker’s compensation cases to view the scope of employment more broadly, and instead adopted Restatement (Third) of Agency § 7.07 as setting forth the appropriate test for evaluating whether an employee is acting within the scope of employment.

The Court distinguished the Arizona Court of Appeals decision in McCloud v. Kimbro, 224 Ariz. 121, 228 P.3d 113 (App. 2010), which involved an administrative regulation providing that an Arizona Department of Public Safety employee is within the course and scope of employment when driving a state-owned vehicle to and from meals while on out-of-state travel.  The regulation did not apply here.  To the extent that McCloud suggests that employees generally are acting within the course and scope of employment when driving to a restaurant during an extended out-of-town assignment, it is overruled.   

Chief Justice Berch authored the opinion for the unanimous Court.