From JDSupra, Richard Reibstein discusses a recent case in Massacahusetts and potential negligent hiring claims that may be brought against companies who engage independent contractors if the company knew or should have known of red flags with the independent contractor. Richard writes:
Last month, one of the key legal developments involving independent contractors (ICs) was a decision by the highest court in Massachusetts involving a legal doctrine being used more frequently than ever against businesses that engage ICs: negligent hiring. Many companies assume the doctrine applies only to employees and often assume that, by retaining ICs, they are free from liability in the event an IC causes personal injury or property damage to third parties. Yet, as summarized below, among the key legal developments last month, a business can be liable for damages to third parties caused by an IC under a number of different legal theories: negligent hiring of the IC, if it can be shown that the business knew or should have known that the contractor was unsuitable for the services to be performed; ordinary negligence, if the business did not draft the IC contract in a manner to protect itself from such claims; and vicarious liability (also called respondeat superior) if the worker was misclassified as an IC instead of an employee. Companies can use a process such as IC Diagnostics® to structure, document, and implement their IC relationships in a manner that maximizes compliance with laws governing ICs and, at the same time, minimizes their exposure to third-party liability.
In the Courts (5 cases)
Massachusetts High Court Defines a Company’s Liability to Third Parties for a Contractor’s Alleged Negligence. The Supreme Judicial Court of Massachusetts in August decided a case involving a roofing subcontractor that failed to use fall protection equipment on a project, allegedly leading to a worker’s personal injury. While the worker was covered by Workers’ Compensation in relation to his claims against the roofing company, he sued the building owner under two legal theories. The first was negligent hiring, based on the injured party’s claim that the owner knew or should have known that the roofing company engaged by the owner had a record of failing to maintain safe worksites. The second was that the owner retained the right in its contract with the roofing company to control the work of the latter, yet failed to take actions to ensure the worker’s safety. The court ruled in favor of the owner on both legal theories. It concluded that the wording in the parties’ contract was a “general right to direct and stop work,” not retained control over safety practices at the worksite.
This case did not present a claim of vicarious liability based on an allegation of IC misclassification. The test for IC status in a third-party liability claim differs considerably from the test for IC status in a wage and hour claim. Many plaintiffs’ personal injury lawyers, though, commonly include a misclassification claim in their lawsuits, claiming an IC’s alleged negligence should be vicariously imposed on the company that engaged the IC under the legal doctrine of respondeat superior. This is the same theory that third parties use when injured by a company’s employee. Unless a business structures, documents, and implements its IC relationships in a manner enhancing compliance, it is vulnerable to all of these types of legal theories. Further, liability can arise not only where the IC is retained to provide services directly to third parties, but also where the IC injures a third party, such as an IC that drives a truck on public roadways in connection with their services. Luis Contento Suquilanda v. Skyway Roofing Inc., No. SJC-13878 (Sup. Jud. Ct. Mass. August 17, 2026).
