In Soto v. Shealey and Swift Transportation (August 2, 2018) Federal District Court Judge Tunheim allowed claims for negligent selection, negligent supervision, and negligent entrustment to go to trial regardless of whether or not the owner operator of a truck under an independent contractor agreement was determined to be an employee or an independent contractor.
Judge Tunheim found there was “more than sufficient evidence from which a reasonable jury could find “the independent contractor was actually an employee.”
Judge Tunheim also held that although the Minnesota Supreme Court has not expressly adopted the tort of negligent selection, he thought the Minnesota Supreme Court would recognize the tort of negligent selection of an independent contractor. Negligent selection is a legal theory under which companies in many industries may be exposed, under certain circumstances, to liability for damages caused by their contractors.
In the employment context, liability of a company is based on the negligence of an employer in placing a person with known propensities, or propensities which should have been discovered by reasonable investigation, in an employment position in which it should have been foreseeable that the hired individual posed a threat of injury to others. If the Soto decision is followed by other courts, companies in Minnesota will be exposed to claims based on negligent selection, negligent supervision, and negligent entrustment regardless of whether the individual hired by the company is classified as an employee or as an independent contractor. A key question is whether the allegedly negligent or wrongful conduct of the individual independent contractor or employee was “reasonably foreseeable” and whether the company took appropriate steps to prevent the conduct. The underlying premise of the independent contractor relationship is that the company forgoes the right of control over the individual, but under the Soto decision a duty may be recognized on the part of the company to retain some level of control in the form of taking appropriate steps to prevent negligent conduct.
Given the difficulty in establishing that negligent conduct by an individual was not “reasonably foreseeable” the Soto decision makes it even more important for companies to investigate and document the performance history of any individual who is engaged in the performance of duties that are the same or similar for which the individual is selected and retained, regardless of the individual’s status as employee or an independent contractor. If the inquiry reveals difficulties in similar prior conduct, the company should consider whether the selection or retention of that individual is reasonably prudent.
If you have questions concerning employment issues, independent contractors or transportation issues, contact Keith Broady at 612.336.9346 or kbroady@lommen.com, Stacey DeKalb at 612.336.9310 or stacey@lommen.com or Mike Glover at 612.336.1269 or mglover@lommen.com.