by Last week, the Minnesota Supreme Court held that businesses in Minnesota can be found liable for failing to exercise reasonable care when selecting independent contractors. The Court stated that companies that engage independent contractors must exercise reasonable care to ensure that the contractors are competent. A plaintiff suing the business due to the negligent selection of an independent contractor must show that the harm suffered stems from a quality in the contractor that made it negligent for the business to entrust the assigned work to them.
The expectations and potential liability for businesses engaging independent contractors differ based on the kind of work being done and the reasons for any harm caused by the contractor. For work that requires no special skill or training or does not pose a physical danger if improperly done, the business engaging the contractor may assume that a contractor with a good reputation is competent. Unless the business has a reason to believe the contractor is incompetent, it doesn’t need to investigate actual competence. For work that requires special skill or training or poses the potential of physical danger if improperly done, the business is obligated to investigate the contractor’s competence.
Potential liability for the business is limited if the contractor is incompetent due to a lack of skills or inadequate equipment rather than a history of negligence. The liability of the business engaging the contractor is limited to the harm caused by such lack of skill, experience, or equipment. The business may have liability if the harm was caused by negligence and the business could have discovered the contractor’s history of negligence through reasonable investigation.
The case before the Court, Alonzo v. Richard Menholt, involved the collision of two sugar beet trucks, seriously injuring one of the drivers. Neither the subcontractor that employed the driver at fault nor the business engaging the subcontractor had investigated the driver’s driving record. The driver at fault had a suspended driver’s license and an extensive record of traffic violations.
Minnesota businesses engaging independent contractors should consult with legal counsel to assess whether they need to change policy and practice to minimize potential liability.
