The blurry line between agent, independent contractor and employee can be used against you if you do not understand the differences and put it in writing.Posted: December 11, 2017 | |
The use of the PGA name was not enough to tie the PGA to a golf camp where they had no relationship or control. As such, they were dismissed from the suit because they had no duty to the injured minor.
State: New Jersey, Superior Court of New Jersey, Appellate Division
Plaintiff: Seung Yon Choi and Gerald J. Keane on behalf of E.K., a Minor as Guardian Ad Litem, and Seung Yon Choi, and Gerald J. Keane, individually, Plaintiffs-Appellants
Defendant: Hunterdon County YMCA, Inc., Michael Trianio, Chris Nallen, Alex Baker, Erica Croat, The New Jersey Professional Golfers Association, Inc. (NJPGA), James Mullen, Defendants, and The Professional Golfers Association, Inc.
Plaintiff Claims: negligent supervision
Defendant Defenses: no relationship to create an agency
Holding: for the defendant
A minor was injured by another camper at a golf camp. The parents sued everyone involved including the PGA. The PGA filed a motion to dismiss because they had nothing to do with the camp.
The motion was granted because there was no legal relationship between the camp and the PGA. The use of the PGA logo by the camp in its brochure was not enough, if allowed by the PGA, to establish liability.
The minor, age 5, was enrolled in a YMCA golf camp. The golf camp in its brochure advertised the camp would be run or the instructors would be PGA professionals. The PGA logo was used on the brochure.
The minor was struck in the face by a golf club swung by another minor at the camp. The parents sued the defendants listed above for negligent supervision. Prior to this motion, the plaintiff settled with all the defendants except the PGA (Professional Golf Association). The PGA filed a motion for summary judgment arguing it owed no duty of care to the minor plaintiff. The motion was granted by the court, and the plaintiff’s appealed.
Analysis: making sense of the law based on these facts.
The issue was the involvement of the PGA in the operation and control of the camp. The PGA argued they had nothing to do with the camp, almost indicating their name and logo had been used without their permission.
The parents argued two issues. The PGA was liable under the theory of respondeat superior and camp, and the professional golfer hired by the camp had apparent authority to act for the PGA.
The phrase respondeat superior means the employer could be found liable for the acts of an employee, if at the time of the occurrence the employee was acting within the scope of his or her employment. The easiest example of this is you have an employee who in their personal car goes to collect the company mail at the post office. On the way back to the office the employee has a car accident where the employee is at fault. The employer is liable for the acts of the employee because he or she was working or doing work for the employer at the time of the accident.
Under respondeat superior, an employer can be found liable for the negligence of an employee causing injuries to third parties, if, at the time of the occurrence, the employee was acting within the scope of his or her employment.” To establish liability, a plaintiff must show “that a master-servant relationship existed.” “If no master-servant relationship exists, no further inquiry need take place because the master-servant relationship is sine qua non to the invocation of respondeat superior.”
If you have employees do this make sure you have non-owned auto coverage under your company business insurance or purchase a business automobile policy.
In this case, the professional golfer hired to instruct at the camp was an independent contractor of the YMCA and not employed by the PGA. The master servant relationship was created because the professional golfer was an independent contractor of the YMCA and did not work for the PGA.
The record indicates Nallen was hired by the NJ Golf Foundation as an independent contractor to run the YMCA’s Golf Camp. The NJ Golf Foundation paid Nallen $2700 for his services, which was reflected in an IRS form 1099-MISC used for reporting income paid to independent contractors. The PGA is not mentioned in the agreement signed by the YMCA and the NJPGA. Plaintiffs failed to offer any evidence that would show, or even create a
genuine dispute of fact, that Nallen was in a master-servant relationship with the PGA. We agree with the trial court that a master-servant relationship was not established merely because Nallen was a professional golfer who had competed in PGA events as a member of the PGA.
The second theory was there was an apparent agency between the PGA and the professional golfer.
If a principal cloaks an independent contractor with apparent authority or agency, the principal can be held liable as if the contractor were its own employee if it held out the contractor to the plaintiff as its own servant or agent.” Liability may be imposed on the principal based upon “apparent authority” when “the principal’s actions have misled a third-party into believing that a relationship of authority in fact exists.”
The issue is the principal, in this case the PGA must cloak the agent, the professional golfer with the authority to do something on behalf of the principal.
Liability arises if “the principal has by his voluntary act placed the agent in such a situation that a person of ordinary prudence, conversant with business uses, and the nature of the particular business, is justified in presuming that such agent has the authority to perform the particular act in question.”
Because the PGA did nothing, possibility did not even know about the camp, the PGA could and did not cloak the professional golfer with any authority to do anything.
To satisfy its burden of establishing the apparent authority or apparent agency relationship, plaintiffs had to establish: “(1) that the appearance of authority has been created by the conduct of the alleged principal and it cannot be established ‘alone and solely by proof of [conduct by] the supposed agent,’ (2) that a third party has relied on the agent’s apparent authority to act for a principal, and (3) that the reliance was reasonable under the circumstances.”
This prevents the principals of the world from being drug into every lawsuit any blowhard could create. You have no control over the people walking around saying they work for you, you may not even know they are saying it let alone even know they exist. Therefore, their actions cannot drag you into litigation that you have no knowledge of.
By contrast, there was no evidence of voluntary conduct on the part of the PGA to create an appearance that the YMCA or Nallen had authority to act for the PGA. Indeed, there was no evidence the PGA was involved in any aspect of the planning or administration of the YMCA’s camp. There was no evidence the PGA was even aware of the use of its logo or name in the YMCA’s brochure prior to this lawsuit, let alone that it authorized its use for the YMCA’s marketing purposes. Again, the appearance of authority “cannot be established ‘alone and solely by proof of [conduct by] the supposed agent[.]'”
Since there were no acts or actions on the part of the PGA they were allowed to be dismissed from the suit.
So Now What?
I suspect that the PGA is going to maintain a closer hold on the use of its name in the future. I also suspect that in a couple of states, this might have had more traction. The PGA, like many other organizations, works hard to uphold the values and qualifies its name represents. Consequently, legitimacy can be provided to a program or camp by using its name.
The same issues appear in the outdoor recreation world. I just finished an article where name NOLS was used to describe a program, that was not a NOLS program. NOLS and Outward Bound represent the top tier of outdoor training in the US short of the AMGA for more technical skills. As such always be a little suspicious when their names are bandied about. Is it truly a course being offered by them or are they using the name to provide legitimacy to what they are trying to do.
The other issue is who has authority to do what for your business or program. Keep your eyes and ears open for the use of your name by anyone.
Finally, this might have gone another way if there was not a written agreement between the professional golfer and the camp. Everyone wants to blur the lines when there is an injury. The IRS lives on blurred lines when taxes are not filed. If you hire independent contractors, you should look at hiring them with a written contract.
At the same time, hiring independent contractors to do the work of employees will also get you in hot water. If in the industry, normally employees do the work that your “independent contractors” are doing, you will be writing big checks to the IRS, Workers Compensation and to the employees themselves.
Copyright 2017 Recreation Law (720) 334 8529
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