Rideshare ballot question could affect non-drivers
Measure could end 'vicarious liability' of app-based driver firms
MUCH OF THE DEBATE over the app-based-driver initiative petition has focused on how it would affect the drivers themselves. As important as those issues are, there is another aspect that has been overlooked. If the initiative petition establishes in law that drivers for Uber, Lyft, GrubHub, and other apps are “independent contractors” for all purposes, that could have farther-reaching consequences.
The distinction between independent contractor and employee is a determining factor in whether a company can be held liable for the torts caused by that worker. Under a doctrine known as vicarious liability, employers are liable for the torts committed by employees acting in the scope of their employment. The rule is different for independent contractors. As former Supreme Judicial Court Justice Francis Spina observed for a unanimous court in 2003, “Generally speaking, the employer of an independent contractor is not liable for harm caused to another by the independent contractor’s negligence…”
The whole concept of vicarious liability can seem counterintuitive to some because under the doctrine an employer owes damages to a plaintiff even when the fault – meaning negligence, usually – lies completely with the employee. The company may have done nothing “wrong,” but still be on the hook. Yet vicarious liability has been a facet of the common law stretching back to before the founding of the United States. It shares philosophical similarities with other fault-free liability laws: workers compensation and products liability. Commentators today generally acknowledge that holding employers vicariously liable is fair when the employer’s enterprise created the risk of harm to the plaintiff. Also, holding employers responsible for employees’ torts can be an efficient way to encourage better risk-avoidance because the company will be motivated to revise its policies to avoid future liabilities.
Today, the law in Massachusetts is unclear as to whether app-based drivers are independent contractors or employees. The initiative petition would settle that uncertainty in the company’s favor. The proposal would create a new statute establishing that app-based drivers are independent contractors. By the terms of the initiative petition language, no contrary law could supersede that.
If app-based drivers in Massachusetts were deemed independent contractors with respect to vicarious liability, then individuals injured by those drivers would have the court doors slammed in their faces if they tried to sue the companies for their contractors’ wrongs. Only under special circumstances – where the employer controlled the tortious contractor’s actions – could an employer be held vicariously liable for the actions of an independent contractor.
Without the ability to sue the app-based employer, plaintiffs would be left trying to collect from the drivers themselves, or more likely, their insurers. The company coffers would be out of reach. The insurers would not be liable for anything beyond the coverage amount in the policy. The drivers have much more limited assets than their employers.
It is true that the 2016 rideshare law set minimum insurance levels for rideshare drivers and rideshare companies on top of the usual insurance requirements. However, that legislation dealt exclusively with the rideshare industry – Uber and Lyft – whereas the proposed ballot question also covers delivery companies. Also, the $1 million per-incident liability coverage mandated for working rideshare drivers may sound like a lot, but it is often a fraction of what plaintiffs in wrongful death cases are owed. Nearly all claims are settled before trial, and the details of those settlements are almost always shielded from public view. It is difficult therefore to say with any authority what a defendant could expect to owe for causing a wrongful death or debilitating injuries. However, some examples can provide a starting point. In a wrongful death case from San Francisco, the parents of Amelie Le Moullac, a bicyclist who was struck and killed by a delivery truck driver, sued the driver’s employer, Daylight Foods. The parents were awarded a total of $4 million in damages after the 2013 trial. In New Jersey, the estate of Tom Squire – who in 2017 had rear-ended a delivery truck, which then backed into his car, killing him – was awarded a judgement of $2.95 million.
A tragic, debilitating, or deadly injury is, unfortunately, a potential outcome for anyone who uses the roadways. While the customers of Uber and Lyft have signed away their rights to sue the companies in court – agreeing instead to binding arbitration – other road users can sue those companies for alleged wrongs, including under a theory of vicarious liability. At least for now.It is impossible to predict with total accuracy how a court might interpret the language of the initiative petition, but there is still time for others to consider the effects the legislation might have before it becomes law. The proponents of this initiative petition should be asked their views on whether it would shield companies from vicarious liability claims, and whether that was one of their aims. The lawmakers considering legislative proposals to forestall a ballot question should think about whether they should leave open the possibility of holding the companies vicariously liable in tort law even if the drivers are classified as independent contractors for employment law purposes. Voters who may have tuned-out the debate because it seems focused on a narrow employment law question might want to sit up and take more notice.
Andy Metzger is a former reporter at CommonWealth and current law student at Temple University.