Insurance and liability issues in the gig economy
Gig workers are generally compensated as 1099 independent contractors and have control to set their own schedules.
Since the arrival of Uber in 2009, the gig economy has grown from fledgling startups into a critical part of the lives and routines of many people across the nation. Of course, as the usage of gig economy entities has grown, so have the chances of potential liability and exposure in the context of civil lawsuits.
Non-standard or gig work consists of income-earning activities outside the standard, long-term employer-employee relationships that previously dominated the employment landscape. Gig workers are generally compensated as 1099 independent contractors and have control to set their own schedules.
The working arrangements between these entities and independent contractors vary from one business to another, but typically begin with an agreement explicitly identifying the gig worker as an independent contractor. The agreements also tend to establish that the company will exercise no supervision or control over the contractor.
The companies do not provide materials or tools with which the contractor is expected to perform their duties, and the companies will not establish a mandatory timeframe during which the contractor must be available to perform these duties.
Georgia cases about ‘the right to control’
Georgia case law on the issue of employer liability for the negligence of an independent contractor is clear and well established. “Under longstanding Georgia law, the true test to be applied in determining whether the relationship of the parties under a contract for the performance of labor is that of employer and employee, or employer and independent contractor, lies in whether the contract gives, or the employer assumes, the right to control the time, manner and method of executing the work, as distinguished from the right merely to require certain definite results in conformity to the contract.” (See Cajun Contractors, Inc. v. Peachtree Prop. Sub, LLC, 360 Ga. App. 390, 394, 861 S.E.2d 222,231-32 (2021) (citing Stalwart Films LLC v. Bernecker, 359 Ga. App. 236, 240-241 (1), 855S.E.2d 120 (2021)).
Viewed in the context of the case law above, it’s clear to see that the typical terms and conditions of many gig entities are intended to ensure that these companies have no right to control the time, manner or method of the work performed.
Such terms and conditions often include (1) a clear identification of the relationship, (2) the independent contractor’s right to control the manner in which they complete their ride, delivery or other tasks, (3) the contractor’s ability to control their hours or schedule, (4) a requirement that the contractor provide their equipment needed to complete the work and (5) no requirement for the contractor to wear a uniform.
Several Georgia trial courts have recently addressed this issue of a gig entity’s liability for the alleged negligence of an independent contractor. In the case of Lacagnina v. Gooch and Raiser LLC d/b/a Uber in the State Court of Fulton County (Civil Action File No. 18EV003842), the court granted summary judgment on the plaintiff’s vicarious liability claims in favor of Uber, on the grounds that the defendant driver was an independent contractor.
The court reasoned that Uber “does not control the time or manner in which [the driver] performs his job,” the driver has “enormous freedom to choose when he works, for how long and what to wear,” the driver “may even choose to ignore the route suggested by Uber,” and that the contract between Uber and its driver “specifically denotes the driver as an independent contractor [sic]”.
Also important to the court’s analysis was the fact that the driver “drove his own vehicle, paying his own expenses and maintenance,” could “use his vehicle at any time, for anything else, including working for a competitor,” had “no manager or schedule, but could log on and accept rides if/when he desired” and had “no control over how Uber conducted its business.”
Uber Technologies Inc. was also granted summary judgment under similar circumstances in the case of Rhonda Hines v. Uber Technologies Inc. before the State Court of Cobb County (Civil Action File No. 19-A-3711). In Hines, the plaintiff sought recovery from Uber based on theories of vicarious liability due to the driver’s engagement with Uber at the time of the accident.
Similar cases
Again, the rideshare entity presented evidence of their lack of supervisory authority over the driver, including a lack of requirement that they wear particular uniforms or work during specific times of the day.
Additionally, the Hines court reasoned that the defendant driver’s ability to work for direct competitors of Uber, such as Lyft, DoorDash or Grubhub pointed to a finding of independent contractor status. Finally, the applicable terms of service for Uber clearly identified the driver as an independent contractor and not an employee.
As such, the court determined that the uncontroverted evidence in the record showed that the defendant driver was not an Uber employee and Uber was not held vicariously liable for any alleged negligence on the part of said driver.
The rulings for Uber in Lacagnina and Hines have led plaintiffs to resort to new strategies and claims to attempt to impute liability to these gig entities. In the case of William Evans v. Roy Odell Sallie and Lyft Inc. in the State Court of Clayton County (Civil Action File No. 2020CV02237), the court relied on the aforementioned Lacagnina and Hines orders respectively and flatly rejected the plaintiff’s attempt to make vicarious liability claims against Lyft.
Additionally, the plaintiff brought a claim of negligent hiring, training, retention and supervision against Lyft. The court again relied on well-established Georgia case law that there is no duty to train independent contractors and negligent hiring and retention claims do not apply to these contractors. (See O’Dell v. Mahoney, 324 Ga. App. 360, 367, 750 S.E.2d 689, 695 (2013); Finley v. Lehman, 218 Ga. App. 789, 791, 463 S.E.2d 709, 711 (1995); Charter Peachford Behav. Health Sys. v. Kohout, 233 Ga. App. 452, 461, 504 S.E.2d 514, 525 (1998); and Wilson v. Guy, 356 Ga. App. 509, 514, 848 S.E.2d 138, 143 (2020).)
Lastly, in the matter of Latoya Walker v. Andrew Morrison, Lyft Inc., and Indian Harbor Insurance Co. in the State Court of Bibb County (Civil Action File No. 21-SCCV-092374), the court determined that the facts of the case pointed clearly that the defendant driver was acting as an independent contractor at the time of the accident.
The court concluded Lyft’s lack of control over the driver’s mode of transportation, hours, which rides to accept or reject, appearance and ability to perform work for others illustrated his clear independent contractor status.
This plaintiff also attempted to assert a direct-action claim against Lyft pursuant to O.C.G.A § 40-1-112(c) which applies to motor carriers and their insurers. The court held that Lyft did not meet the definition of a motor carrier because “Lyft does not own, control, operate or manage the motor vehicles used by Lyft drivers.” Further, the court concluded that Lyft was in fact a “ride share network service” as defined as O.C.G.A § 40-1-190(4).
As illustrated by the host of opinions outlined above, Georgia courts across the state have shown a willingness to uphold prior decisions regarding the importance of time, manner and method of executing the work at issue. Despite plaintiffs’ insistence to pursue gig economy entities based upon claims of vicarious liability/respondeat superior and negligent hiring, training, retention and supervision, judges throughout the state are drawing a line in the sand, so to speak, on the issue.
Graham W. Davis is an associate attorney in Swift Currie’s Atlanta office. He focuses his practice on defending individuals and companies in matters primarily pertaining to automobile litigation and premises liability.
Benjamin J. Yancey is a litigation associate in Swift Currie’s Atlanta office. His practice is focused on representing insurers, motor carriers, businesses and individuals in matters related to transportation litigation, construction disputes, premises liability and products liability.
Opinions expressed here are the author’s own.
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