Byline: David Donovan
Many businesses are trimming payrolls by converting employees into independent contractors, but a Nov. 20 opinion by the North Carolina Court of Appeals suggests that they may have a harder time leveraging the gig economy to rid themselves of legally liability for their workers' negligence.
Reach for Independence, a provider of services to disabled individuals, had contracted to pay Richard Charlton for roughly 40 hours a week of work as a "paraprofessional caregiver" providing one-on-one supervision of a particular client. While Charlton was using his own vehicle to transport his charge through Asheville in 2015, he struck and killed Yvonne Lewis as she was crossing a street.
The administrator of Lewis' estate sued Charlton and RFI, the latter under a theory of respondeat superior, arguing that Charlton was acting as an employee of RFI when the accident occurred. Last year Buncombe County Superior Court Judge Casey Viser granted RFI's motion for summary judgment, finding that Charlton was working as an independent contractor, and not an RFI employee.
But in a unanimous opinion, the Court of Appeals reversed and held that Lewis' estate could proceed with its suit against RFI, saying that the vital question was not whether Charlton would be deemed an employee for tax purposes, but rather the degree of control RFI retained over the details of his work.
Judge Chris Dillon, writing for the court, said that for tort liability purposes, a worker is an independent contractor if he is accountable to his paymaster only for the result of his work, not for the manner in which he carries it out. Crucially, a worker is an employee if the employer retains the right to control the details of the work, regardless of whether the employer actually exercises this privilege.
On its surface, the tragedy bore some striking similarities to the Court of Appeals' 1999 decision in Rhoney v. Fele, in which it ruled that a nurse who was involved in a fatal car crash while driving to a hospital was an independent contractor rather than an employee. But Dillon distinguished the two cases, finding that RFI had exerted a much greater degree of control over Charlton's work.
"Specifically, the evidence shows that while Mr. Charlton was experienced in providing caregiving services to disabled clients, Defendant RFI was more than just a broker or...