Employers have a relationship with their employees known as the employer – employee relationship. The employer has the power to control the activities of the employee; therefore, the acts of the employee are considered the acts of the employer. This power comes with certain liabilities. In the case of an employee's act(s) of negligence, the employer may be vicariously liable to non-employees involved. Employers are liable to third parties who are injured by negligent employees (Richards, 2009). For example, an employer may be held responsible for an automobile accident caused by the negligent act(s) of its employee(s).This paper will discuss the employer’s vicarious liability resulting from an employee’s automobile accident including the facts of the accident, the employer-employee relationship, and the settlement between the employer and one of the injured third parties.