Police Chases and the Company Vehicle

There is nothing like logging onto your news app or turning on the television to see video of your company’s delivery truck prominently featured in a police chase. Your first thought might be “oh no.” Your second thought might be to accept the Hollywood adage that “bad publicity is better than no publicity.” Famously, sales of white Ford Broncos surged after OJ Simpson’s police chase. Your third thought is more practical: “What is this going to cost my San Diego business?” As with most matters, how to respond and the consequences depend on the unique facts of the case. Why is your company vehicle in a police chase? Was your driver involved in a hit and run accident? Who is driving the truck now? Was it stolen?

From a small business perspective, there are three sets of issues with something like this – civil liability, potential criminal law issues, and damage to business reputation. The first step is to call your insurance carrier and alert them of the inevitable claim against the policy. The second step is to call your experienced and talented San Diego corporate attorney.

San Diego Corporate Law: Civil Liability

In general, San Diego businesses are liable for accidents or other injury/damage caused by their employees. This is based on the California legal principle of respondeat superior, which has its origin in the old-fashioned lord-servant relationship. If the lord or master sent the servant to market or on some errand, under the law, the lord/master was held liable to pay for injury caused by the servant when the servant was doing the business of the master. As one California court stated: “The employer is liable not because the employer has control over the employee or is in some way at fault, but because the employer’s enterprise creates inevitable risks as a part of doing business.” See Bailey v. Filco, Inc., 48 Cal.App.4th 1552 (Cal. App. Dist. 1996).

For this reason, the doctrine of respondeat superior applies even to criminal behavior of the employee if one of three conditions exist:

• If the employer authorized the criminal activity beforehand
• If the employee/agent commits the crime in the “scope” of employment and “in performing service on behalf of” the employer OR
• If the employer ratifies the criminal conduct after the fact

See Doe v. Roman Catholic Archbishop of Los Angeles, 247 Cal.App.4th 953  (Cal. App. 2nd Dist. 2016).

In general, whatever your employee has done, if it was done as part of his or her job, then your business will likely be held liable. That being said, if the criminal conduct — such as fleeing the scene of an accident — was the individual conduct of your employee, then there should be no liability for your business (but do not count on getting off the hook that easy!).

San Diego Corporate Law: Criminal Law

In general, if your business knows that a crime has been committed but does not report the crime or the culprit, such might constitute the crime of obstructing justice and/or aiding and abetting after the fact. There is a tendency to cover up crimes to avoid civil liability and to avoid embarrassing publicity. However, that is a bad idea. The coverup is often worse than the crime.

San Diego Corporate Law: Damage to Business Reputation

In today’s marketplace, businesses “run” on their reputation. Consequently, if there has been a crime, the tendency is — again — to coverup and be “hush hush” about the criminal activity. A good recent example involved Uber’s data breach from October 2016 when personal information for about 57 million customers was stolen by computer hacker. See report here. The data that was exfiltrated included names, addresses, emails, phone numbers, trip histories and, for some, driver’s license numbers.

Rather than report the data breach, Uber decided to coverup the breach. Indeed, Uber paid the hacker $100,000 as “hush money.” Eventually, the data breach was discovered, Uber had to admit the breach and admit the coverup, fired its chief cybersecurity officer, and is facing magnified government penalties, civil fines, and judgments and damage to its reputation.

Contact San Diego Corporate Law Today

If you would like more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard can be reached at (858) 483-9200 or via email. Mr. Leonard has been named a “Rising Star” four years running by SuperLawyers.com and “Best of the Bar” by the San Diego Business Journal.

You Might Also Like:

Avoiding Employee Lawsuits With a Good Employee Handbook

A Checklist for Hiring Your First Employee

Medical Corporations: Company Policies May Help Avoid Malpractice Lawsuits

Three Essential Agreements Needed When Hiring Employees

Are You at Risk for Being Sued for Negligent Hiring?