In the preceding post, I discussed the NY Times article discussing how Amazon outsources delivery services to what purport to be independent contractors, but who actually may well be servants. I explained that principals can be held vicariously liable for the torts of those agents who are servants but not those who are independent contractors.
The NYT article observed that:
FedEx has settled lawsuits in recent years brought by drivers who argued that they functioned as employees, not independent contractors. Last week, Uber and Lyft announced that they would spend $60 million to contest a proposed California law that would force them to treat their contract drivers as employees.
In lawsuits, people injured in crashes and drivers in wage disputes have argued that Amazon retains so much control that it effectively is the drivers’ employer.
But are principals vicariously liable for torts of their employees? This brings us to a point of terminology that is one of my pet peeves. As I explain in my book, Agency, Partnerships, and LLCs:
There is a growing tendency towards using the terminology of employer and employee rather than master and servant. The Restatement (Third), for example, does away with all three of the classic terms—master, servant, and independent contractor—and replacing them with employer, employee, and nonemployee agent. The old distinction between nonservant agents and nonagent independent contractors also was abolished in favor of the terms nonemployee agent and nonagent service provider.
Admittedly, the terms master and servant are archaic and politically incorrect. The implication of menial service, moreover, is usually erroneous. Yet, it is not clear that employer and employee are an improvement. In particular, both common usage and many legal regimes treat some agents as employees even though they would not be deemed servants under the Restatement (Second) definition. If vicarious liability is grounded in the principal’s ability to control the agent’s physical performance of a task, however, as it has been traditionally, it would seem that something beyond mere fulltime employment must be shown. A growing number of courts, however, seem willing to infer the requisite level of control from the mere fact of fulltime employment. Some courts have even abandoned the control requirement: “Thus in this case where it is agreed that a regular employee is sent upon a specific errand, using his own car with the knowledge and permission of the employer, and it is agreed he was acting within the scope of his employment at the time of the accident, the employer is liable for his acts whether it had control of his detailed operation of the motor vehicle or not.”[1] These courts have gone full circle back to the days of Jones v. Hart. The distinction between independent contractors and servants did not exist until the 1840s, prior to which time a principal was held vicariously liable for the torts of his agents of either type.[2] The distinction arose, however, precisely because it makes sense to impose vicarious liability only where the principal may exercise its control so as to prevent accidents. By eviscerating the terminological distinction between servants and independent contractors, the Restatement thus may contribute towards this unfortunate trend of treating principals as insurers of their agents.[3]
[1] Hunter v. R.G. Watkins & Son, Inc., 265 A.2d 15, 17 (N.H. 1970).
[2] Stockwell v. Morris, 22 P.2d 189 (Wyo. 1933).
[3] In any event, while it is not always easy to distinguish between servants and independent contractors, it may not prove any easier to distinguish between employee and nonemployee agents.
