According to a recent California appellate court decision, an employer can be liable for an employee who drank too much at a company party, made it home safely, and then killed a man in a drunk driving accident after he left his house again.

“It is irrelevant that foreseeable effects of the employee’s negligent conduct (here, the car accident) occurred at a time the employee was no longer acting within the scope of his or her employment,” the court ruled.

Michael Landri was a bartender at the Marriott Del Mar Hotel. He attended the hotel’s annual holiday party in December 2009, beginning his celebration with a beer and a shot of Jack Daniels at home. He also filled a five-ounce flask with Jack Daniels and took it with him to the party, held at the hotel.

At the party, one of the managers acted as a bartender. She filled Landri’s flask on at least one occasion. Another employee drove a group to Landri’s house. Roughly 20 minutes later (and not having consumed any more alcohol) Landri left his house to drive another coworker home. En route, while driving over 100 mph, he rear-ended another car, killing the driver. Landri had a 0.16 blood alcohol level. He pleaded guilty to gross vehicular manslaughter and was sentenced to six years in prison.

The deceased’s parents brought suit against Landri and Marriott. A trial court judge granted summary judgment to the hotel.

But the appellate court reversed.

Marriott’s respondeat superior liability followed the risk created by the intoxication, the court said, no matter where it proximately caused harm. Because he became intoxicated at an employee-sponsored party that benefited Marriott, he was acting within the scope of his employment and the employer could be liable.

The court reviewed two divergent doctrines of liability from different jurisdictions addressing similar factual scenarios. In Arizona, Illinois, and Kansas, the court noted, an employer is liable only if the accident itself occurs at a time when the employee is acting within the scope of his or her employment.

Another group of states – including Hawaii, Oregon, and Washington – have found it sufficient, for respondeat superior liability purposes, that the alcohol consumption occurred within the scope of employment.

Aligning California with the latter position, the appellate court said its decision was also in accord with state precedent. “[E]xisting California case law clearly establishes that an employer may be found liable for its employee’s torts as long as the proximate cause of the injury occurred within the scope of employment,” the court wrote. “It is irrelevant that foreseeable effects of the employee’s negligent conduct occurred at a time the employee was no longer acting within the scope of his or her employment.”

Turning to the specific facts of the case, the court determined that a reasonable trier of fact could find that Landri was acting within the scope of his employment when he became intoxicated at the party. The consumption of alcoholic beverages by employees at the hotel “was a customary incident to the employment relationship,” the court said. Employees were allowed to finish alcohol left over after parties while on shift, taste new drinks or have drinks purchased for them; at the party, managers served hard alcohol and did shots with employees.

Marriott also benefited from the party because it furthered employer-employee relations and improved employee morale, the court noted.

Marriott argued that allowing it to be liable under the facts of the case would open the doors to broad potential liability for employers. Its responsibility as a result of serving alcohol at the party, it asserted, should have ended when Landri arrived at his home safely.

The panel rejected that contention. “[A] trier of fact could conclude that the proximate cause of the accident, Landri’s intoxication, occurred within the scope of Landri’s employment,” the court said. “[W]e focus on the act on which vicarious liability is based and not on when the act results in injury.”

No reasonable justification exists for “cutting off an employer’s potential liability as a matter of law simply because an employee reaches home,” the court added. Instead, “the employer’s potential liability under these circumstances continues until the risk that was created within the scope of the employee’s employment dissipates.”

To read the decision in Purton v. Marriott International, click here.

Why it matters: The Purton decision opens employers up to potentially broad liability under the court’s analysis, focusing the scope of employment “on the act on which vicarious liability is based and not on when the act results in injury.” Marriott argued that the decision would judicially legislate new law that employees drinking at an employer function must be escorted home and kept there by escort, in violation of personal privacy and liberties, for employers to avoid liability. “Not so,” the court said. The employer “created the risk of harm at its party by allowing an employee to consume alcohol to the point of intoxication.” The court added that Marriott could have lessened its risk by enforcing a drink-ticket policy, serving drinks for only a limited time period, serving food or instituting a policy prohibiting smuggled alcohol. “Alternatively, it could have eliminated the risk by forbidding alcohol.” After the court’s decision, many employers may choose the last option to similarly eliminate the risk of liability. “[I]f a commercial enterprise chooses to allow its employees to consume alcoholic beverages for the benefit of the enterprise, fairness requires that the enterprise should bear the burden of injuries proximately caused by the employees’ consumption,” the court concluded.