To print this article, all you need to do is be registered or log in to Mondaq.com.
With the proliferation of mobile apps offering ride-sharing, third-party food delivery, and even same-day do-it-yourself services, a national conversation has taken place about using independent contractors to carry out essential business functions. Businesses must consider many factors when determining whether to hire independent contractors rather than employees, with pros and cons for businesses and staff. Among these factors, consideration should be given to the types of disputes that may arise between an employer and its workers and the disputes that may often result.
One type of dispute that becomes more onerous along the independent contractor route is when a contractor claims to have been injured on the job. In most states, an employee injured on the job must seek compensation through workers’ compensation, not through traditional tort litigation. Because independent contractors are not covered by workers’ compensation insurance, businesses are subject to the state’s common law obligations to contractors and potential damages.
In Tennessee,1 for example, courts have ruled that a company must exercise due diligence to provide a reasonably safe work environment for the independent contractors it hires. This obligation includes warning or protection against hazards which the company knows may be involved in the work concerned and which would otherwise be unknown to the contractor. In this vein, a company that assumes responsibility for supplying tools or equipment to a contractor must ensure that such tools and equipment are in good working order and free from any known defects. However, when a contractor claims to be qualified to perform a particular task, the principal is released from any obligation to train or supervise this contractor. These duties and the standards for imposing liability vary depending on the state in which a contractor operates.
The questions that inevitably arise as to whether a company has met these obligations to an aggrieved contractor require a very factual investigation which can make it difficult to resolve related claims. Companies can and should avoid these issues by developing and entering into appropriate independent contractor agreements that address and confirm the relevant details of the work to be performed and the respective responsibilities of the company and the contractor, including the underwriting of insurance and payment of relevant taxes. .
Our firm was recently involved in a case defending a logistics provider against an independent contractor injured on the job. When an in-house attorney or other business services attorneys work with a litigation attorney to craft independent contractor agreements from the outset, the combined knowledge of all aspects of the business and knowledge of the legal pitfalls potential can make all the difference down the line.
1. Blair v. Campbell924 SW2d 75, 76 (Tennis 1996).
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
POPULAR ARTICLES ON: US Litigation, Mediation & Arbitration