Can Businesses Be Liable for the Actions of Independent Contractors?

Independent contractors are a fixture of modern business operations. From delivery drivers to construction subcontractors to maintenance providers, businesses in almost all sectors use independent contractors at one point or another. However, those same businesses may be operating under the assumption that they are not liable for personal injury or damage caused by independent contractors. And while that rule is generally true, there are certain exceptions that all businesses should be aware of, as explained below by our North Carolina personal injury defense attorneys.  

The General Rule: Businesses Usually Are Not Liable for Independent Contractors

The legal doctrine of respondeat superior (“let the master answer”) holds that employers are liable for the negligent acts of their employees. A foundational feature of the doctrine is the employer-employee relationship, through which liability flows from the employee to the employer. A major exception to this doctrine is independent contractors: because independent contractors typically control how they perform their work, a business that hires an independent contractor cannot be held liable for the contractor’s acts, as the business does not exercise the requisite degree of control over the contractor’s behavior for liability to attach.

The Importance of Employee Classification

Whether a worker is an employee or an independent contractor is not always a black-and-white distinction. Simply calling a worker an independent contractor does not necessarily make it so. North Carolina courts look past labels and instead focus on the nature of the relationship between the two parties. If a business refers to a worker as an independent contractor but treats the worker more like an employee, courts may find that the worker is, in fact, an employee for the purposes of vicarious liability. 

When determining whether an employer-employee relationship exists, courts look to several factors, including: 

• The degree of control over the work
• The method and frequency of payment
• Who provides the tools and equipment
• The length of the relationship
• Whether the worker is free to work for others
• Freedom to hire assistants
• Allocation of profit and loss

In personal injury litigation, plaintiffs often argue that an alleged independent contractor was actually an employee, and evidence of the defendant business’ actions often plays a key role in that determination. For more information about mitigating risk when hiring independent contractors, please contact a North Carolina personal injury defense attorney. 

Exception #1: Negligent Hiring 

Even when a worker is truly an independent contractor, businesses may still be liable for the contractor’s actions if the business failed to exercise reasonable care in selecting the contractor. The key inquiry in such cases is whether the business knew or should have known that the contractor it hired posed an unreasonable risk. If the answer is “yes,” then liability may attach.  

Common red flags that can indicate a risky contractor include: 

• Lack of required licenses
• Inadequate or nonexistent insurance coverage
• Prior accidents
• History of safety violations
• Criminal convictions related to the work being performed
• Repeated customer complaints

If you’re considering hiring an independent contractor, please speak to a North Carolina personal injury defense attorney to minimize the risk of negligent hiring claims. 

Exception #2: Negligent Retention or Supervision

While a contractor may appear qualified initially, problems can arise when warning signs emerge after the working relationship begins. If a business hires an independent contractor and is aware that the contractor is creating unreasonable dangers, continued retention of the contractor can cause liability for injuries to attach. For example, assume that a painter erects a rickety scaffold that repeatedly wobbles above a pedestrian walkway. The hiring business notices this conduct and receives complaints about it, but allows the work to continue. Eventually, a pedestrian is injured when the scaffold collapses. The injured pedestrian may argue negligent retention or supervision because the hiring business knew about the unsafe conduct and failed to intervene. 

Exception #3: Non-Delegable Duties

Some duties are so foundational to a business' operations that it cannot avoid responsibility for them by delegating them to third parties, including independent contractors. These are known as “non-delegable duties.” 

Examples of non-delegable duties include: 

• Maintaining safe premises
• Compliance with safety regulations
• Duties imposed by statute 

The non-delegable duties doctrine often arises in premises liability actions. For example, assume that a business hires a contractor to polish their floors, but the contractor applies too much polish and a customer slips, falls, and injures themselves. Because property owners have a non-delegable duty to keep their premises reasonably safe for lawful visitors, the business may be liable for the contractor’s actions. For more information about liability based on the non-delegable duties doctrine, please contact a North Carolina personal injury defense attorney. 

Exception #4: Inherently Dangerous Activities

Certain activities pose risks even when performed carefully. Known as “inherently dangerous activities” or “ultra-hazardous activities,” courts often impose special responsibilities on parties who hire independent contractors to perform such work. 

Examples of inherently dangerous activities include: 

• Demolition
• Blasting 
• Handling hazardous chemicals
• High-voltage electrical work
• Certain construction activities 

For example, consider a scenario in which a developer hires a contractor to engage in blasting work. During the performance of the work, a piece of flying debris falls into a neighboring home and injures the home’s occupant. Even though the responsible party was an independent contractor — and even if the contractor exercised reasonable care in performing its duties — liability may still attach to the developer because blasting is an inherently dangerous activity. 

Minimize Your Risk of Independent Contractor-Related Liability by Working With a North Carolina Personal Injury Defense Attorney

While the general rule is that businesses cannot be held liable for the acts of independent contractors, that rule is not absolute, and hiring independent contractors is not risk-free. There are certain situations in which a hiring business can still be held liable for the negligent acts of an independent contractor. To minimize your risk of incurring liability due to the acts of an independent contractor, please seek the counsel of a North Carolina personal injury defense attorney at Harris, Creech, Ward & Blackerby. Call 252-638-6666 or use our online contact form.