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Distinguishing

Distinguishing "Employees" from "Independent Contractors" in Accident Cases

Under New York law, an employer may be held “vicariously” liable for the acts of his or her employees. That means if you are injured in an automobile accident by someone driving a company-owned car, the employer may be held liable if you can prove the employee was acting within the “scope of employment” at the time of the accident. Conversely, if the employee was driving his personal vehicle outside of work hours, you normally cannot sue the employer.

Bennett v. Logan

Of course, sometimes it is not always clear whether a person is an “employee” for purposes of establishing vicarious liability. Here is a recent example from a case in upstate New York. This case involves a 2008 automobile accident. The plaintiff's pickup truck collided with a car driven by one of the defendants. This defendant had borrowed the car from someone else. At the time of the accident, the driver was making sales calls in the Town of Perry in Wyoming County. The driver was a sales representative for KR Communications, a company that resells satellite television packages for Dish Network.

The plaintiff sued not only the driver and owner of the car, but also KR Communications and Dish Network. Dish Network argued it should be dismissed as a defendant, as the driver was not actually their “employee.” Judge Michael M. Mohun of Wyoming County Court agreed in an opinion issued on January 5th of this year.

The evidence clearly established the driver “was not an agent or employee of Dish Network,” Judge Mohun said. As a salesman for a third-party, there was never any direct contractual relationship between the driver and Dish Network. Indeed, the driver never even made any direct sales of Dish Network service; he simply identified potential customers for KR Communications, which actually completed the sales. For that reason, Judge Mohun dismissed Dish Network altogether as a defendant in this case.

Now as to KR Communications, Judge Mohun it was a “closer question” whether the driver was an employee. KR Communications argued the driver was not actually an independent contractor, not an employee. This is an important distinction, because KR Communications is contractually obligated to indemnify Dish Network for the acts of its “employees.” Here, Judge Mohun agreed with KR Communications the driver was, in fact, an independent contractor, so the company did not have to indemnify Dish Network.

Generally speaking, a company is not vicariously liable for the acts of independent contractors. This may lead some companies to improperly classify employees in an effort to avoid liability. But that was not the case here, Judge Mohun said. The evidence clearly established KR Communications “exercised no control” over the driver, a key factor in an employer-employee relationship. As a salesman, the driver was paid on commission; he did not receive a salary. The driver had to furnish his own vehicle when making sales calls and received no travel-related reimbursements from KR Communications.

Holding Parties Accountable

Had the driver been a salaried employee driving a company car, this would have been a much different case. That is why in any personal injury action it is essential to establish the legal relationships of the parties involved. No employer should escape responsibility for a motor vehicle accident caused by the negligence of one of its employees. If you require advice from an experienced New York accident attorney on these issues, contact our office right away.

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