Under North Carolina’s doctrine of respondeat superior, a principal may be held vicariously liable for the torts of his agent.
What that means is that a company or business can be held liable if its employee is negligent when on the job, even if the business itself was not negligent.
Take, for example, the case of a car accident. An employee, who is in the course and scope of his employment, is involved in a motor vehicle accident resulting in injuries to a third party. The employee is at fault. The injured party can sue not just the employee, but also the employee’s employer under a respondeat superior theory of vicarious liability.
Employers have attempted to avoid this potential for liability by labeling employees as independent contractors. If it is determined that one is truly an independent contractor, his employer is not vicariously liable for on the job negligence of an independent contractor.
As a recent North Carolina Supreme Court case illustrated, the title that is used is not determinative. Calling someone an independent contractor for purposes of payroll taxes or applicability of the Workers Compensation Act does not end the inquiry for purposes of vicarious liability.
Our Supreme Court has instructed that whether an agent is an independent contractor or employee for purposes of determining vicarious liability of the employer is the “degree of control retained by the principal over the details of the work as it is being performed by the agent.” Specifically, an independent contractor is not accountable to his employer as to the manner in which he performs his work but is only accountable as to the result.
If an employer has retained the right of control over the contractor or employee as to details of performance, that worker is considered an employee under the law regardless of title. Also, it does not matter if the employer actually exercises control as long as the employer has the right to do so.
In its recent decision, the Supreme Court applied the eight factors enumerated by the Supreme Court in Hayes v. Board of Trustees of Elon College in determining whether one is an employee or independent contractor for purposes of vicarious liability of the employer.
Those look at the extent to which an employee:
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