What is Vicarious Liability?

Vicarious liability is the legal responsibility for a person’s negligent or intentionally wrongful conduct imposed on another person or company because of a special relationship and/or duty that person owes to them or the public. It arises from either a special relationship recognized by law, such as an employer-employee relationship, or a legally created duty to prevent harm that the liable party created, such as a seller-server of alcohol over-serving alcohol to someone who is going to drive.

Vicarious liability matters when the negligent actor lacks sufficient insurance or assets to adequately compensate the victim for their injuries. In some catastrophic injury claims, such as spinal injury claims, the medical bills cost millions of dollars.  Many tortfeasors (negligent drivers) do not have enough insurance coverage to satisfy such losses. Texas has one of the lowest auto insurance minimums in the country. 

Additionally, in some cases, the tortfeasor’s insurance company may deny coverage altogether. For example, if an Uber driver causes a car crash, a personal auto insurance carrier will almost always deny coverage, unless the tortfeasor purchased a commercial rider or took other such steps.  Vicarious liability is vital in these cases for the injured victim.

Is an Employer Vicariously Liable For His Employee’s Negligence?

When an employee acts within the course and scope of employment at the time of the negligent act, the employer is vicariously liable for the employee’s actions under the doctrine of Respondeat Superior. Respondeat superior simply means “let the employer answer for his servant.” This theory also applies to truck drivers, bus drivers, and other commercial operators. There are two basic prongs to hold the employer liable:

• The negligent person is acting as an employee.
• The employee is acting within the scope of employment.

Who is an Employee?

Determining whether someone is an employee of another is not always as black-and-white as it seems. Sure, many situations make an employee obvious, such as people working at a fast food chain or a department store. However, the law recognizes that some employers try to avoid liability by “classifying” employees as independent contractors.  They do not want to give up the right of control that comes along with being the boss, but they do not want to take responsibility for their actions. Examples of employees include:

• grocery store checkers and baggers
• Fast-food restaurant workers
• teachers
• waiters and waitresses
• office staff.

What is an Independent Contractor?

An independent contractor is someone who does work for another person but retains control over the manner and details of the work. The person hiring them can hire and fire them but does not have the right to tell them how or when to do their work. Examples of independent contractors include:

• taxicab drivers
• subcontractors on a job site
• home inspectors
• a company you hire to repair your home.
• pest control services.

What is a Statutory Employee?

To close the independent contractor loophole in the trucking industry, Federal Law makes interstate truck drivers “statutory employees” of the interstate motor carrier they are hauling the load for. Additionally, the term “interstate motor carrier” is broadly defined to include just about any company involved in interstate commerce. A truck accident attorney can help you determine who is potentially liable.

How Do You Determine Who Is an Employee vs. an Independent Contractor?

Courts look at many pieces of evidence to determine whether someone is an employee or an independent contractor. The ultimate question is who controls how the work is done. Here are some of the things most often looked at:

• What does the contract say? The contract’s wording is not determinative. Courts will look past the terms “employee” and “contractor” to determine whether the person retains control.
• Is the person classified for tax purposes as 1099 or W-2?
• How is the person paid? Employees are most often paid hourly, whereas contractors may be paid by the job.
• What type of work was being done at the time, and whom did it benefit?
• Who provided the tools?
• Who determines the method, means, and training?
• What is the industry standard, and are there special laws?
• Who has the right to set the work hours?

All of the above are just some of the facts that a court may look at when analyzing whether someone is an employee vs an independent contractor.

When is an Employee Acting Within the Scope of Employment?

An employee acts within the scope of employment when he carries out tasks his employer has asked him to do to further the employer’s business. These may be normal routine tasks (i.e., daily work routine), or they may be a special errand the employer has asked the employee to do. However, when an employee deviates from instructions and does something for their own benefit, it can take them outside the scope. A jury often has to decide. Here are some examples of when an employee might take themselves out of the course and scope of their employment:

• Going to and from work is generally considered outside the scope of employment because the employee is not yet on the clock.
• Taking a detour or making a special stop to make a personal delivery while en route to make a delivery for an employer takes an employee outside of course and scope.

Are Businesses Who Sell Alcohol to Drunks Vicariously Liable?

Dram Shop laws are state laws that impose liability on businesses that serve and sell alcohol to the public.  They can vary from state to state. In Texas, alcohol sellers and servers are vicariously liable for car crash damages if they sell alcohol to an obviously intoxicated person who subsequently causes a car crash.

The relevant section of the Alcoholic Beverage Code has a couple of twists. Texas’ modified contributory negligence law may affect the alcohol provider’s liability. The law also includes a safe harbor exception that shields bars and restaurants when they put all staff through a simple 2-hour online training course.

The Dram Shop Law applies to bars, grocery stores, and other commercial providers.

Conclusion

In summary, when acting on behalf of someone else, the tortfeasor may not be the only party that is responsible for damages. Consider other avenues of recovery, especially in cases of catastrophic injury or limited insurance coverage. For a free consultation with an experienced personal injury attorney in Houston, contact Simmons & Fletcher, P.C.