At approximately 7:45 p.m. on April 20, 2006, two teenage girls were walking on the shoulder of County Road 618 in Kinnelon. Jafar v. Elrac, Inc., No. A-4945-09 (App. Div. April 18, 2011). Defendant Eugene Baum, who had been drinking vodka throughout the day, hit the girls with his rented vehicle and killed them. He was arrested and charged with reckless driving and operating a motor vehicle while intoxicated. He was eventually convicted of two counts of first-degree aggravated manslaughter.

The parents of the girls sued Baum, Elrac Inc. (the owner of the rented vehicle), Enterprise Rent-a-Car Co. (the car rental company), and Baum’s employer, Future Electronics Corp. (“Future”). The plaintiffs advanced two theories of liability against Future: 1) Baum was acting within the scope of his employment when the accident happened; or 2) Future knew, or should have known, of Baum’s history of alcohol abuse and, therefore, it negligently retained him as an employee. The trial court granted summary judgment to Future and the Appellate Division affirmed, holding that the plaintiffs failed to establish a disputed factual issue “that Baum was acting within the scope of his employment when the accident occurred, or that Future had a duty to monitor Baum’s alcoholic beverage consumption during off-duty hours.”

On the day of the accident Baum was driving a vehicle that he had rented, and paid for himself, for his own personal use while his personal vehicle was not available. Baum had initially been hired by Future, which is an international distributor and marketer of semi-conductors and other electrical components, in 2004 as an inside sales representative, but by March 2006 he had begun migrating to an outside sales position. As an outside salesman, Baum’s duties included visiting customers by driving to their businesses.

During his deposition Baum testified that on the day of the accident he drove to a business appointment in Monmouth County and then returned to his home in Dover in the afternoon. He then left his house to go to his mother’s home in Kinnelon to get an automobile tire. He stated that he consumed vodka out of a plastic water bottle throughout the day, including while he was driving. He also testified that it was “highly likely” that he consumed more alcoholic beverages once he returned home that day but before he left to go to his mother’s house.

According to Baum, his typical workday was from 9:00 a.m. to 5:00 p.m., but he worked after 5:00 p.m. about fifty percent of the time. On the day of the accident, however, he did not recall working once he returned home; in fact, he left his briefcase, laptop, and other work documents in his rented car when he went inside his house. However, there was some evidence that he may have done “some emailing at home,” though Baum did not know if it was work-related or personal. He also did not recall making any phone calls or reviewing any work documents on the way to his mother’s house. The last outgoing activity on his cell phone was when he called his voice mail at 7:19 p.m., about twenty-five minutes before the accident. During discovery Baum stated that the purpose of his trip at the time of the accident was purely personal and not work related.

In the nine months before the accident, Baum was hospitalized three different times relating to chronic pancreatitis and alcohol abuse. He described his drinking as excessive and admitted that it affected his work performance. Braun did not know, however, whether Future knew about his alcohol abuse. He denied ever being drunk in front of his co-workers and his supervisor testified that he never saw Baum drink alcohol.

In their lawsuit, the plaintiffs alleged that Baum was acting within the scope of his employment at the time of his accident and that Future “‘knew or should have known defendant Baum had been intoxicated in the past while performing his duties [for Future] as a traveling sales person driving a motor vehicle.’” The plaintiffs also claimed that Future negligently hired, retained, and supervised Baum by using him as a traveling sales person because it was “‘reasonably foreseeable that defendant Baum’s chronic intoxication would lead to a motor vehicle accident.’” Following the close of discovery, the trial court granted summary judgment to Future and denied the plaintiff’s motions for reconsideration. (Elrac and Enterprise also obtained summary judgment, and a judgment was entered against Baum.)

The Appellate Division affirmed. (The Appellate Division also affirmed the trial court’s refusal to stay the action against Future pending the conclusion of the criminal proceedings against Baum, which we will not further discuss in this post.) With respect to the plaintiffs’ first theory of liability, which was vicarious liability based on respondeat superior, the Appellate Division explained that to hold an employer liable a plaintiff had to prove: 1) that a employer-employee relationship existed; and 2) that the tortious act of the employee occurred within the scope of the employment. Because there was no dispute that the first element was satisfied, the Appellate Division focused on the second element, stressing that factors to be considered included the nature of the employment, the duties of the employee, and whether the accident occurred during the course of a job-related function.

Turning to the evidence, the Appellate Division noted that the only evidence to arguably show that Baum was acting within the scope of his employment at the time of the accident was the “fortuitous presence” of work documents in his vehicle and that that he had checked his voicemail and listened to a message from a co-worker. The court declared that “[t]his is insufficient as a matter of law to implicate the employer in the after-hours torts of its employee.” The Appellate Division emphasized that Baum was on a personal task that was not related to his employment and that Future could not have known about Baum’s intoxication that night or done anything about it.

With respect to the plaintiffs’ negligent hiring, supervision, and retention theories, the Appellate Division observed that there is no requirement that the employee was acting within the scope of his employment when the tort occurs in order to impose liability on the employer. To impose liability under these theories, a plaintiff must demonstrate that the employer knew about or had reason to know about the employee’s dangerous characteristics and the reasonable foreseeability of harm to others. The plaintiff must also establish proximate causation, in that injury to the specific plaintiff was foreseeable to the employer.

Focusing on foreseeability, the Appellate Division pointed out that the decedents were not known to Future and had no connection to Baum’s employment. The court further emphasized that Baum was on his own time with his own vehicle completing a task that had nothing to do with Future. Although Baum had worked previously that day, and apparently consumed vodka throughout the day, the court found that “there is nothing to suggest that Future knew or should have known that his alcoholic beverage consumption on the date in question would impair his ability to drive safely. Even if Future had reason to know that Baum drank on a regular basis, it had no way of preventing or knowing of Baum’s particularly inebriated condition on the date in question, well after the usual workday ended.” The court also questioned the plaintiffs’ suggestion that Future had a duty to monitor Baum’s drinking habits on the job and stressed that even if Future had such a duty there was no way that plaintiffs could establish a causal connection.

The Appellate Division’s decision was a significant victory for employers, as a contrary decision could have exposed them to expansive, and expensive, liability. Employers would be well-advised to monitor this case to see if the plaintiffs seek the Supreme Court’s review – and if the Supreme Court takes the case – because if the Supreme Court were to do so and reverse the Appellate Division, employers would be confronted with all types of new obligations and duties to monitor their employees.