Under the doctrine of respondeat superior, an employer may be vicariously liable for the actions of its employees or agents. When respondeat superior is at issue, an initial determination is often whether the alleged tortfeasor qualifies as an independent contractor rather than an employee because, under certain circumstances, a hirer cannot be held vicariously liable for the negligence of its independent contractor.
Pursuant to California Labor Code Section 2750.5, there is a rebuttable presumption that a worker performing services for which a license is required is an employee rather than an independent contractor. However, the following factors are considered in determining whether a worker might qualify as an independent contractor:
(a) The worker has the right to control performance of the contract and discretion as to the manner in which the services are performed. The result of the work is the primary factor bargained for rather than the means by which it is accomplished.
(b) The worker is customarily engaged in an independently established business.
(c) The worker’s independent contractor status is bona fide and not a subterfuge to avoid employee status.
In addition to the factors listed above, any person performing any function or activity for which a license is required pursuant to Contractors' State License Law must hold a valid contractors' license as a condition of having independent contractor status. The language of California Labor Code section 2750.5 "absolutely denies independent contractor status to a person required to have such a license who is not licensed." (Foss v. Anthony Industries (1983) 139 Cal.App.3d 794.)
The burden of proving a contractor was duly licensed at the time of the relevant incident is on the party seeking to rebut the presumption created by Labor Code Section 2750.5 and establish that an independent contractor relationship exists. Earlier this year, California’s Fourth District Court of Appeal applied the presumption to deny summary judgment requested by a hiring party in Blackwell v. Vasilas.
In Blackwell, the plaintiff was injured while using scaffolding assembled by a contractor who was hired by the defendant. The defendant’s relationship with the contractor arguably satisfied multiple factors necessary to qualify as an independent contractor relationship. However, the defendant did not provide any evidence that the contractor was licensed at the time of the accident. The Court therefore denied summary judgment, holding, “To establish that [the contractor] was an independent contractor (as opposed to [the defendant’s] employee)…the defendant was required to present evidence that [the contractor] was licensed” or evidence that the services performed did not require a license. The defendant did not present any evidence regarding the contractor’s licensing, and therefore summary judgment was denied.
The Court’s decision highlights one of the many reasons it is important for developers and contractors to ensure the entities and individuals they contract with are properly licensed. The ruling also serves as a reminder of the significance of the burden of proof regarding independent contractor relationships.