Does Enforcing Government Regulations Count As Control Of An Independent Contractor?

We all know the general rule: If the principal has the right to control the manner and means of the work, the worker is an agent or an employee.  If not, the worker is an independent contractor.  But what if the principal’s “control” is limited to enforcing the worker’s compliance with government regulations?

Under one line of case law, “where the method of performing a task is dictated by health and safety regulations imposed by the government, the principal is not exercising the manner and means of control as an employer.”  (Southwest Research Institute v. Unemployment Ins. Appeals Bd. (2000) 81 Cal.App.4th 705, 709, citing Empire Star Mines Co. v. Cal Emp. Com. (1946) 28 Cal.2d 33, 43.) The appellate court, however, recently called into question this rule in Secci v. United Indep. Taxi Drivers, Inc. (Feb. 15, 2017, B270082) — Cal.App.5th —.

In Secci, plaintiff sued a taxicab company for injuries sustained in a car accident. The trial court overturned the jury’s verdict on the grounds that the evidence of an agency relationship between the taxi company and the driver was based entirely on controlling the driver’s compliance with local regulations.  The appellate court disagreed and reinstated the jury’s verdict:

The fact that many of the controls imposed by the taxi association on its drivers are based on governmental rules and requirements or operate for the mutual benefit of the taxi company and its drivers does not give courts or factfinders license to ignore those controls in deciding whether a principal-agent relationship exists. Once we have established that the status of the taxi industry as a publicly regulated industry may expose taxi companies to vicarious liability for the negligent acts of drivers who act as the companies’ agents, it would be illogical to exclude from consideration the controls required by such regulations.

(Secci v. United Indep. Taxi Drivers, Inc. (Feb. 15, 2017, B270082) — Cal.App.5th —.)

So does the rule from Empire Star Mines still survive after Secci? That’s unclear. Secci expressly rejected the rule in cases of vicarious liability for contractors in publicly regulated industries.  At the same time, the Secci court was careful to limit its holding to the agency question.  It did not consider whether government regulations should impact the “control” analysis for workers who claim statutory rights under an employment relationship.

Posted on February 23rd, by in Uncategorized.

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