Written by attorneys · grounded in primary & secondary sources — see below
A person or entity that controls and directs a worker under an express or implied contract of hire and pays the worker's salary or wages.
Sources & Authorities
How it applies
Common Examples
6
Independent Contractor Injury
Elemental Pharmaceuticals hired a contractor to repair a loading dock. The contractor's employee dropped a beam that injured a passerby. Because the hiring company gave no negligent directions and the work was not inherently dangerous, the company avoided liability for the contractor's omission.
Exclusive Services Injunction
Enigma Technologies obtained an injunction to stop its former lead designer from working at a rival firm. The court refused the order because enforcing the exclusivity clause would have forced the designer into an ongoing personal relationship with the original company or left her without a reasonable livelihood.
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Cases
Statutes
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Common Law
Restatements
Study Supplements
Dictionaries
Empire Logistics fired an office manager who circulated a petition protesting internal transfer policies. The manager's speech addressed only workplace grievances rather than matters of public concern, so the employer could terminate her without violating the First Amendment.
Fraudulent Indorsement Loss
Emerald Enterprises gave its bookkeeper authority to process incoming checks. The bookkeeper forged indorsements and deposited the checks into a personal account. The bank that paid the instruments in good faith could treat the indorsements as effective against the employer.
Negligent Direction Liability
Esme Ellington hired an independent contractor to install wiring and specifically directed the contractor to bypass a required safety shutoff. When the wiring caused a fire that damaged neighboring property, the hiring party faced the same liability as if it had performed the negligent act itself.
Incompetent Contractor Selection
Edith Eberhardt hired an unlicensed contractor to excavate a trench next to a busy sidewalk without checking references or requiring proof of insurance. The trench collapsed and injured a pedestrian. The hiring party was liable because it failed to exercise reasonable care in selecting a competent contractor for inherently dangerous work.
Common questions
Frequently Asked
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When is an employer liable for harm caused by an independent contractor?+
An employer is generally not liable for physical harm caused by an independent contractor or its servants. Liability arises only when the employer gives negligent directions, fails to hire a competent contractor for dangerous work, or retains control over the work.
Can a court enjoin an employee from working for a competitor under an exclusive-services contract?+
A court will not grant an injunction against serving another employer if the probable result would compel performance of personal services that the parties no longer desire or would leave the employee without reasonable means of livelihood.
Does the First Amendment protect a public employee's internal workplace complaints?+
Speech that primarily concerns internal office matters such as personnel disputes receives minimal First Amendment protection. An employer may terminate the employee for such speech without constitutional violation.
When is a forged indorsement effective against an employer under the UCC?+
If an employer entrusts an employee with responsibility for instruments and the employee makes a fraudulent indorsement, the indorsement is effective as the employer's own when a bank pays or takes the instrument in good faith.
376 U.S. 254 (1964)Remedies
…made no effort to prove that he suffered actual pecuniary loss as a result of the alleged libel. One of his witnesses, a former employer, testified that if he had believed the statements, he doubted whether he "would want to be associated with anybody who would be a party to such things that are stated in that ad," and that…