Skip to main content

Employer Liability for the Acts of Independent Contractors

Recently, a federal judge in Illinois ordered Dish Network to pay $280 million in fines for robocalls and for calling people on the Do Not Call Registry. According to news accounts, one of Dish Network's defenses was that the companies doing the illegal calling were independent contractors, and, therefore, Dish Network can't be held liable for their actions. The judge rejected this argument.

An independent contractor is different than a salaried or hourly employee, and they are treated differently under the law. Employers often hire independent contractors to do short or long-term projects. Or the independent contractors can even act like a full-time employee in everything but name.

Often, employers can be held liable for wrongful acts committed by its employees, if those acts were committed during the course of the employee doing his or her job. But usually not for the wrongful acts of independent contractors, even if they caused harm while performing work for the "employer" (not really "employer" because the independent contractor is not an employee--they are just two parties to a contract). As courts have said:
As a general rule, a party who retains an independent contractor, as distinguished from a mere employee or servant, is not liable for the independent contractor's negligent acts.
Hence the beauty of the independent contractor. Like Dish Network tried to do, an employer who gets sued can say, "I'm not responsible for what they did! They were independent contractors!"

But sometimes employers can be held liable for the actions of independent contractors. Under New York law, the issue hinges on:  how much control did the "employer" have, and/or exercise, over the performance of the independent contractor's work, or the manner in which they did it? The more control the "employer" had and exercised, the more likely the independent contractor will be considered an employee.

This is true even if the actual contract between the "employer" and the independent contractor says, "You are not an employee. You are an independent contractor." Courts will say, "Yes, that's very nice, but that's not the law. The key factor is how much control did the employer have and/or exercise over the performance of the work."

As you  might suspect, this inquiry is very fact-specific, it depends on the circumstances of each case, and courts often say it is an "issue for the jury" or a "question of fact". That is, a jury has to decide the issue, a judge cannot. You see, courts can't decide "questions of fact", only "questions of law". (Unless a factual matter is so clear on the evidence in the record that it becomes a "question of law", and then they can decide it! Sounds confusing? That is a topic for another day.)

Comments

Popular posts from this blog

Know Your Rights: Money/Remedy at Law vs. Equitable Relief

When you bring a lawsuit (or some other kind of action or proceeding) in court, you are asking the court to give you some kind of relief. Generally speaking, that relief is either money (called "damages" or "money damages" or a "remedy at law") or equitable relief. Everyone knows what money is. What is "equitable relief"? It is relief other than money. Some examples of equitable relief (or "relief at equity" or an "equitable remedy") are:  specific performance of a contract -- you entered into a contract with another party for them to do something; they failed to do it; you sue them to force them to perform as they agreed to in the contract an injunction -- you bring an action to make another party do something or stop doing something rescission of contract -- you entered into a contract; you believe there is a problem with the contract, or the other side committed fraud, or the other side can't perform its oblig...

Recent Case Developments: Employment Contract Enforceable Against Employer Even Though Not Signed

The plaintiff is a modeling scout. Defendant modeling agency decided to hire him as a modeling scout for $190,000/year, plus bonuses. An employment contract was prepared. One provision of the contact said that if the plaintiff were ever fired without cause, he would be entitled to 6-months severance ($95,000). The contract also said that it could be signed in counterparts. The plaintiff signed the contract on August 18, 2015 and emailed his signature to the modeling agency. One of the agency's board members emailed back, saying "Welcome aboard. We'll countersign over the next few days." But no one from the agency ever signed the contract. Nevertheless, the plaintiff began working as a modeling scout, and the agency paid him according to the contract. But after six months, the agency decided to terminate him, without cause. The agency then refused to pay him the $95,000 severance, and the plaintiff brought a lawsuit for breach of contract. The modeling agency m...

Recent Case Developments: Contractor Entitled to be Paid For Extra Work Not Part of Original Contract

On September 12, 2013, the Town of Kent (Putnam County) entered into a contract with a contractor to build a sewer.  During construction, certain "conditions that were unexpected and unanticipated" arose, requiring the contractor to do "extra" work--things beyond the scope of work of the original contract. (The appeals court doesn't detail what this extra work was.) The contractor performed the extra work, totaling around $380,000 in additional costs. For reasons not stated by the appeals court, the Town refused to pay for this extra work, and the contractor eventually sued the Town in May, 2015.  The contractor moved for summary judgment in the lower court (a kind of mini-trial on paper), and the court awarded judgment in favor of the contractor for the $380,000.  The Town appealed, but the appeals court sided with the contractor, saying that even though this "extra" work was not within the scope of work of the original contract, the con...