Articles | Cases

The not-so-simple Course and Scope rule

For an injury to be compensable under Worker's Comp, it must arise out of and in the course and scope of employment. Sounds simple, yet there have been thousands of court cases interpreting those few words. Director of Education at Insurance Journal Academy of Insurance and IWCP consultant, Christopher Boggs, notes that to be compensable, an injury must meet all three of the following tests:

Among the common areas that often trip up employers are employees who are traveling and working off premises, horseplay and the "going and coming rule."

Working off premises

Many employees travel to conduct business on behalf of their employers and injuries suffered by such workers are generally compensable because the proximate cause of an employer's injury is furtherance of the employer's interest. Boggs gives the example of a specialty electrical contractor working with an eight-person crew to install wiring at a plant several hundred miles away. The crew will be on site for four days and several hotel rooms are rented.

Every evening the crew goes out to dinner; while walking to the restaurant an employee steps in a hole, falls and breaks his arm. Under the application of "proximate cause" the employee would not have been walking through the parking lot but for the fact that the employer had sent him there to work. Additionally, eating dinner is within the course and scope of employment as the employer likely provided a stipend for the meals and could have reasonably foreseen them needing and wanting to eat.

On the other hand, if after dinner a crew member decides to drive over to visit friends and family in the area and is badly hurt in an at-fault automobile accident, compensability will likely be denied. This did not meet the three-prong test and the employer did not direct the employee to depart, nor did he sanction the deviation from the approved path – job, hotel, and dinner. This is considered abandonment of employment.

Horseplay and practical jokes

According to Boggs, court and legislative attitudes have shifted regarding the compensability of injuries suffered as a result of horseplay, particularly when an innocent victim is involved. While in the past such injuries were considered to be an abandonment of duty because they were such a deviation from the course and scope of employment. Prevailing opinion now centers on Larson's Workers' Compensation Law that applies a four-part test:

(1) the extent and seriousness of the deviation;

(2) the completeness of the deviation, i.e., whether it was commingled with the performance of a duty or involved an abandonment of duty;

(3) the extent to which the practice of horseplay had become an accepted part of the employment;

(4) the extent to which the nature of the employment may be expected to include some horseplay.

According to Larson, it is not required that all four tests be satisfied for an injury to be compensable.

Going and coming rule

A recent court case, Sprinkles v. Associated Indemnity Corporation, 188 Cal.App.4th 69 (2010) is an important one for those concerned with the Workers' Compensation and the "going and coming rule." Sinco Co., Inc. (Sinco) was a property management company that required its employee, Juan Babinz (Babinz), to use his own vehicle to get to various job sites each day. While Babinz was driving to work in the vehicle that he used to visit job sites, he drove his vehicle negligently, under the influence of drugs, causing the death of Michael Sprinkles (Sprinkles).

At the time of the accident, Sinco carried a Commercial Auto policy issued by General Insurance with a million-dollar limit, an Umbrella and Excess policy from Fireman's Fund with a million-dollar limit, and a CGL policy issued by Fireman's with a million-dollar limit. Plaintiffs partially settled the Sinco action, with General paying its million-dollar primary limit and Fireman's Fund paying its excess million-dollar limit. However, the insurer denied coverage under the CGL policy.

The arbitrator awarded $27 million, finding that at the time of the accident, Babinz was acting within the course and scope of his employment under the "required vehicle" exception under the "going and coming rule" and that Sinco had been negligent in hiring and retaining him.

This case focused on bad faith because Fireman's Fund failed to defend the suit or indemnify against it under the CGL policy. The definition of insured under the CGL policy included employees, "but only for acts within the scope of their employment while performing duties related to the conduct of your business."

The Court of Appeal affirmed the judgment in favor of Fireman's Fund. The appellate court noted that under the so-called "going and coming rule," an employee is not deemed to be acting within the scope of his employment while going or coming from his place of work. However, the "going and coming" rule is subject to the "required vehicle" exception, which applies when an employer requires an employee to use his or her own vehicle for transportation on the job.

The court did not buy the theoretical possibility that the actions of an employee might be within the actions of the course and scope of employment, but "not related" to the conduct of the business. It ruled that Babinz's use of his own vehicle required by Sinco was within the scope and course of the business, and that driving that vehicle to work was at least performing a duty "related" to the conduct of the business.