The Company Car: Workers’ Compensation Coverage for Work-related Auto Accidents

The Supreme Court of New Jersey recently provided clarification on the going and coming "authorized vehicle rule" and how it applies to worker’s compensation coverage for work-related auto accidents. On November 21, 2023, the Supreme Court of New Jersey made a ruling in Keim v. Above All Termite & Pest Control, in which petitioner Henry Keim appealed a Workers' Compensation Division order dismissing his claim petition for medical benefits with prejudice. The Judge of Compensation concluded that Keim was not acting within the course and scope of his employment at the time of the accident. Keim at the time of the accident was driving his employer's vehicle from his home to the employer’s shop to restock the chemicals he used at the work sites. The Judge of Compensation concluded that Keim was merely commuting to work when he sustained injuries.

Under N.J.S.A. § 34:15-36, employment shall be deemed to commence when an employee arrives at the employer's place of employment to report for work and shall terminate when the employee leaves the employer's place of employment, excluding areas not under the control of the employer.

Here in this matter, the employer directed employees not to carry large quantities of pesticides and supplies in their company assigned vehicles because they did not want the chemicals exposed for long periods to summer heat or winter cold, and wanted to limit the risk of products being stolen. The employer preferred employees pick up supplies in the morning for that workday and supplies not remain in the assigned vehicles overnight.

The Appellate Division applied the "authorized vehicle rule" and reversed the dismissal order of the Judge of Compensation. Under N.J.S.A. 34:15-36, an employee falls under the "authorized vehicle rule" when the employee is "in the course of employment".  An employee is in the course of employment when the employer authorized a vehicle for operation by the employee and the employee’s operation of that vehicle is for business expressly authorized by the employer.

The "authorized vehicle rule" does not apply every time an employee is driving a vehicle authorized by an employer, and does not apply when an employee is merely commuting to work in an authorized personal or work vehicle. Here, Keim was on his way to the employer's shop to replenish the supplies needed to perform the jobs he was assigned on the day he was involved in the motor vehicle accident.

The Supreme Court of New Jersey confirmed and held Keim was "in the course of employment" under the "authorized vehicle rule" at the time of the accident as the employer authorized a vehicle for him to operate and his operation of that identified vehicle was for business expressly authorized by employer.

When handling work-related auto accidents, coverage will be determinative based on the facts presented case by case. If you have questions on worker’s compensation coverage for work-related auto accidents, contact Wyatt L. Hardy and Jeffrey J. Czuba or call us at 732-545-4717.