Liable for Contractor’s Miscues? Don’t Be Fooled by General Rule—Know the Exceptions

There are several benefits to hiring independent contractors. One benefit is avoiding liability for work the contractor negligently performs. Specifically, while employers are legally responsible to others for an employee’s negligent acts, they generally aren’t liable for an independent contractor’s miscues. Indeed, that is often why a business hires a contractor. Be aware, however, there are exceptions to the general rule. Read on to learn about some of the exceptions and what you can do to protect your business from liability.

General Rule

Whether an individual is an “employee” or an “independent contractor” turns on whether the alleged employer exercises control over the means used to perform the work. The less control you exercise over the work performance, the more likely it is that the individual will be considered an independent contractor.

This leads to the general rule surrounding liability for independent contractors’ negligent conduct. That is, because employers don’t exercise control over the means an independent contractor uses to carry out the work, they aren’t liable for injuries caused to third parties as a result of the contractor’s acts. However, courts have recognized a number of exceptions to the general rule, which relate to:

• Work that is “inherently dangerous”; or
• A relationship with the harmed party that creates a “special duty” for the employer.

‘Inherently Dangerous’ Exception

If the work being performed is inherently dangerous, the duty of care that is owed cannot be delegated to an independent contractor. Public policy reasons exist behind this exception. Specifically, it has been recognized that employers are in a better position to take precautions against harm to unwitting third parties. Accordingly, an employer should not be able to shift liability to a contractor when inherently dangerous activities are involved.

The Wisconsin Supreme Court defined what would be considered an inherently dangerous activity in Brandenburg v. Briarwood Forestry Servs., LLC. In the case, Robert Luethi hired an independent contractor, Briarwood, to spray a potent herbicide on his property to get rid of some overgrown plants. The herbicide spread to neighboring property owned by the Brandenburgs, causing damage to their trees and plants.

The Brandenburgs sued Luethi for the independent contractor’s negligence. The supreme court ruled that Luethi could be held liable for the contractor’s negligent acts if the activity being performing was “inherently dangerous.” The court reaffirmed the criteria for such activity, namely:

• It poses a naturally expected risk of harm; and
• It’s possible to reduce the risk to a reasonable level by taking precautions.

Applying the criteria, the court found undisputed evidence that the herbicide used by the independent contractor was capable of damaging more than 50 trees; thus, it posed a naturally expected risk of harm. Further, there was undisputed evidence that it was possible to reduce the risk by taking precautions. Under those circumstances, the court found spraying herbicide to be an inherently dangerous activity.

Once you determine an activity is inherently dangerous, the question becomes whether (1) you exercised ordinary care with regard to the danger inherent in the work that you knew or had reason to know about and (2) if so, whether any harm that occurred was caused by the inherently dangerous work. You can avoid liability under the exception by exercising ordinary care.

Notably, an employer’s assertion that it lacked knowledge about the work’s dangerous nature isn’t controlling. Rather, the key is whether the employer of an independent contractor should recognize or has reason to know that the work being performed was inherently dangerous.

Exception for Relationship Between the Parties

Another well-recognized exception to the general rule is the relationship between the employer and the harmed party. The Wisconsin Supreme Court has recognized that when a relationship exists between the employer and the harmed party, creating a special duty to the harmed party, the employer cannot escape liability by hiring an independent contractor.

For example, in Medley v. Trenton Inv. Co., the court held that a landlord owes a special duty to use reasonable care to protect a tenant from injury. In Medley, the landlord hired an exterminator to rid an apartment of bedbugs. The exterminator went into the apartment and fumigated it for bedbugs. The gas fumes went into the apartment directly above the apartment being fumigated, causing the tenant to become very ill and eventually pass away.

The court noted the landlord never inquired about the method to be used by the exterminator. Further, the landlord never notified the tenants upstairs about the work that was to be performed. The court held that the relationship between the parties created a duty for the landlord to use reasonable care to protect the tenant from injury. Although the extermination was being performed by an independent contractor, the employer would be liable if the work was done in a negligent manner.

The court also outlined the employer’s duty under the exception. While there was no evidence the landlord knew that a dangerous gas was going to be employed, it was the landlord’s duty to determine the nature of the agent and the manner of the work performance and then use reasonable care to protect the tenants from damage or injury.

Accordingly, you can protect yourself from liability by (1) taking reasonable care to investigate the independent contractor and the manner in which the work will be performed and (2) fulfilling any special duties by alerting the affected parties about the work.

Bottom Line

The Wisconsin Supreme Court has painted the exceptions to the general rule with a rather broad brush. Accordingly, it’s difficult to outline every activity that would be inherently dangerous or every relationship that would create a special duty. In addition to using reasonable care as outlined above, you can protect yourself by requiring independent contractors to indemnify and hold your business harmless from any losses that may be caused by their negligent work performance. Otherwise, the benefits of hiring an independent contractor may not be worth it.

This article, slightly modified to note recent updates, was featured in the April 2019 issue of the Wisconsin Employment Law Letter, which is co-edited by Axley Brynelson Attorneys Saul Glazer and Michael Modl and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.