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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.)

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