INDEPENDENT CONTRACTOR UPDATE (06/08/2011)

On May 12, a Texas Appeals Court ruled on a construction site independent contractor issue which may have an impact on Nebraska construction contractors.  The construction company signed a contract with a flood control district to perform excavation work and contracted with another entity to provide a location to place the dirt after excavation.  The construction company, which does not perform its own hauling services, also contracted with a “truck broker” to find drivers to haul the excavated materials from the worksite to the storage location.  The construction company paid the truck broker for loads completed and the broker in turn paid each truck driver.  One of the trucks collided with a car while leaving the excavation site.  The driver of the car died and his estate sued the construction company which argued that it never employed the truck driver either as an employee or an independent contractor.  The Appeals Court denied those defenses and concluded that a genuine issue of fact existed as to whether the construction company hired the truck driver as an independent contractor because employees of the construction company checked the driver’s license and proof of insurance for each truck driver and the truck drivers were also required to list the construction company as an additional insured on their insurance.  More importantly, the Texas Appeals Court also noted that the estate raised a question of fact by arguing that the construction company was a “motor carrier” under state law.  The Texas state statute is similar in its definition of “motor carrier” to Section 75-302(12) of the Nebraska statutes.  This decision is a reminder to all construction companies which use non-employee drivers for any jobsite duties that independent contractor status may be present even though an intermediary or broker is used to find the drivers.  Due to this potential liability, construction companies may wish to perform background checks on driving history for any such drivers and be sure that insurance coverage is in place which would cover any negligent acts on the part of such drivers if they are found to be independent contractors hired by the construction company.       By Bill Harding, Chapter Attorney


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