Self-Employed Contractor Cannot Hold Hirer Vicariously Liable for Job Injuries

July 12, 2010

Property owners who hire independent contractors are not vicariously liable for on-the-job injuries to the contractor’s employees, the California Supreme Court has ruled. The state high court extended the decision in Privette v. Superior Court (Privette doctrine) and said those injuries “are covered by workers’ compensation insurance, the cost of which is generally included in the contract price for the project.”

According to court documents in Jeffrey Tverberg et al., v. Fillner Construction Inc., Fillner Construction Co. was the general contractor (GC) for the expansion of a commercial fuel facility operated by Ramos Oil Co. in Dixon, Solano County, Calif. To do its work, Fillner hired subcontractor Lane Supply, which delegated the work to Perry Construction Co., which then hired Jeffrey Tverberg.

Tverberg was paid hourly, but was an independent contractor, not a Perry employee. While on the job, Tverberg fell into a hole dug by another subcontractor and was injured. Tverberg subsequently sued the GC Fillner and the subcontractor Perry seeking damages for physical and mental injuries, and lost income under theories of negligence and premises liability, because he had repeatedly asked the holes to be covered.

Fillner argued it could not be held vicariously or directly liable for failing to provide a safe workplace.

But Tverberg said Fillner had retained control over safety conditions at the jobsite, and thus could be directly liable for its failure to eradicate a known danger.

The trial court ruled the independent contractor could not hold the GC vicariously liable on a theory of peculiar risk, and also rejected the argument at the GC was directly liable for failing to cover the holes because Tverberg was aware of the holes and Fillner had never promised to cover them.

On appeal, Tverberg argued that the Privette doctrine did not bar him from holding the GC vicariously liable on a theory of peculiar risk, and the Court of Appeal agreed, reversing the trial court’s decision. “The Privette’s rule of not imposing vicarious liability against a hiring party for jobsite injuries sustained by an employee of an independent contractor does not apply when the person injured is the independent contractor himself, because unlike the employee, the contractor is not subject to mandatory workers’ compensation coverage,” the court said. “… Privette’s ‘policies and rationale’ would not permit an independent contractor to hold a hiring party vicariously liable for workplace injuries.”

According to Privette, a peculiar risk is “neither a risk that is abnormal to the type of work done, nor a risk that is abnormally great.” Rather, the courts rules that peculiar risk is a special or recognizable danger inherent in the work itself, and that arises “either from the nature or the location of the work and ‘against which a reasonable person would recognize the necessity of taking special precautions.'”

When the Supreme Court decided to evaluate the case, it extended the Privette doctrine to self-employed contractors, saying a self-employed contractor “may not hold a hiring party vicariously liable for injuries resulting from the contractor’s own failure to effectively guard against risks inherent in the contracted work,” because in assuming the work, “unlike a mere employee, an independent contractor, by virtue of contract, has authority to determine the manner in which inherently dangerous construction work is to be performed, and thus assumes legal responsibility for carrying out the contracted work, including the taking of workplace safety precautions.”

The availability of workers’ compensation insurance to compensate for the injury “is not relevant to deciding whether a hirer should incur vicarious liability for workplace injury to an independent contractor who was hired by a subcontractor to do inherently dangerous work,” the high court added.

The Supreme Court reversed the Court of Appeal decision, and remanded the case back to the Court of Appeal.

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