With the proliferation of mobile applications providing ride-share, third-party food delivery, and even same-day handyman services has come a national conversation about the use of independent contractors to carry out core business functions. There are numerous factors for businesses to consider in determining the desirability of hiring independent contractors rather than employees, with positives and negatives for businesses and personnel alike. Among these factors, consideration should be given to the types of disputes that can arise between an employer and its workers and the litigation that can often result.
One type of dispute that becomes more onerous along the independent contractor route is that which arises when a contractor claims to have been injured on the job. In most states, an employee who is injured at work must seek relief through workers' compensation, not through traditional tort litigation. Because independent contractors are not covered by workers' compensation insurance, businesses are subject to state common law duties owed to contractors and potential tort damages.
In Tennessee,1 for example, courts have held that a business must exercise reasonable care to provide a reasonably safe working environment for the independent contractors it hires. This duty includes warning of or protecting against dangers that the business knows may be involved in the relevant work that would otherwise be unknown to the contractor. In this vein, a business that assumes responsibility for providing tools or equipment to a contractor must ensure those tools and equipment are in safe working condition and are free from any known defects. However, where a contractor holds himself out as being qualified to carry out a particular task, the hiring party is relieved of any duty to train or supervise that contractor. These duties and the standards for imposing liability vary depending on the state in which a contractor is operating.
The questions that inevitably arise about whether a business has satisfied these duties to an injured contractor require a highly fact-specific inquiry that can make resolving related claims difficult. Businesses can and should head off these questions by crafting and entering into appropriate independent contractor agreements that address and confirm the pertinent details of the work to be performed and the respective responsibilities of the business and the contractor, including carrying of insurance and payment of relevant taxes.
Our firm was recently involved in a case defending a logistics provider against an independent contractor who was injured on the job. When in-house counsel or other business services attorneys collaborate with litigation counsel in crafting independent contractor agreements on the front end, the combined familiarity with all aspects of the business and knowledge of the potential legal pitfalls can make all the difference down the line.
Footnote
1. Blair v. Campbell, 924 S.W.2d 75, 76 (Tenn. 1996).
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