September 19, 2012

Fifth Circuit Clarifies Meaning of "Course and Scope of Employment" for Jones Act Claims

In a case that could significantly impact the maritime industry, the Fifth Circuit Court of Appeals (the “Court”) confirmed the test for determining whether a Jones Act seaman is acting within the course and scope of employment for purposes of holding his employer vicariously liable for the seaman's tortious conduct. Under the “business interest test,” an employer is liable for its Jones Act seaman's negligence or intentional tortious conduct if the seaman’s actions at the time of the injury were in furtherance of his employer’s business interests. Beech v. Hercules Drilling Company, L.L.C., No. 11-30415 (5th Cir. August 14, 2012). This decision is binding in the Fifth Circuit and provides persuasive authority for all other U.S. jurisdictions.

The Lawsuit

Michael Cosenza accidentally shot his co-worker, Keith Beech, while both were onboard a vessel owned by their employer, Hercules Drilling Company. The District Court had determined that Cosenza was acting within the course and scope of his employment at the time of the fatal accident and, consequently, ruled that Hercules was liable for Beech's death. On appeal, the Court overruled and reversed that decision.

As additional background, general maritime law provides no cause of action to a Jones Act seaman against his employer for employer negligence. The Jones Act gives this cause of action to a seaman, provided that, the seaman is employed for a substantial period of time to work on a particular vessel (or group of vessels) in duties essential to that vessel's function while on navigable waters for an employer who has some substantial contact with the United States. Although not disputed by the parties in this case, the issue of seaman status under the Jones Act is a mixed question of fact and law and usually a question for the jury. The District Court had acknowledged that both Cosenza and Beech were Jones Act seamen because they worked for the vessel owner, a Texas corporation, and were assigned to its vessel, which was navigating in the Gulf of Mexico adjacent to the state of Louisiana.

The Fifth Circuit Court of Appeals’ Analysis

The Court rejected a broader standard, which had been accepted by the Sixth Circuit Court of Appeals. Under this test, the course of employment includes actual services and those things necessarily incident thereto. Consequently, as Beech’s widow argued, it was unnecessary to show that Cosenza’s actions at the time of the fatal injury were in furtherance of Hercules’ business interests.

Instead, the Court clarified that the test for determining whether a Jones Act seaman is acting within the course and scope of his employment is whether the injurious act in question, regardless of whether it was negligent or intentional, was in furtherance of his employer’s business interests.

Under this narrower standard, which had been adopted by the Seventh Circuit Court of Appeals, an activity is within the scope of employment if it is a necessary incident to the day’s work or essential to the performance of the work, but not if undertaken by the employee for private purpose and having no causal relationship with his employment. The Court, however, did not articulate its reasoning using this formulation but instead focused on the relative importance of Hercules’ business interests.

In concluding that Cosenza’s actions were outside the scope of his employment, the Court first noted that Hercules’ business interests with regard to Cosenza were limited to his duty to monitor equipment and report any suspicious activities or problems. The accident occurred while Cosenza was showing off his firearm to Beech, which he had retrieved by leaving his post. Although Cosenza could monitor the equipment while holding the firearm, the Court reasoned that Cosenza went beyond the course and scope of his employment by showing off the firearm, which was prohibited onboard by Hercules’ safety policy, and leaving his post to retrieve it. Instead of monitoring the equipment and watching out for suspicious activities or problems, he created the suspicious activity that he was supposed to report.

Fact Specific Decisions

Although the Court clarified that the “business interest test” was the correct test for determining Jones Act employer vicarious liability cases, it acknowledged that determining whether conduct falls within the course and scope of employment is fact intensive with few bright line principles to provide guidance. Unfortunately, the Court did not explain when certain business interests (e.g., reporting suspicious activities or problems) outweigh others (e.g., monitoring vessel equipment), but its decision suggests that employer safety policies provide some guidance on this issue.

But as the court commented, if an employee's actions are contrary to an employer's business interests, unforeseeable by the employer, and far removed from the employee's role as an employee, then the employee will likely be deemed to be outside the course and scope of employment, even if the employee's job duties are broad and flexible.

Conclusion

This decision removes doubt as to the test for determining the course and scope of employment in Jones Act injury cases in the Fifth Circuit. Despite the Court's decision in favor of Hercules, the decision appears consistent with the trend in Jones Act injury cases where the courts interpret narrowly the defenses available to employers.

If you have any questions regarding the Jones Act or other maritime related issues, please contact the Foster Pepper Yachts, Ships & Submersibles group.

Related News & Events