New Opinion on Liability for Independent Contractors in Maryland

In Giant of Maryland LLC v. Karen Webb, No. 413, Sept. Term 2019, was asked to decide whether Giant could be liable for an injury to a customer caused by a Pepsi delivery driver while stocking Pepsi products on the shelves. The Pepsi driver was not a Giant employee so the issue was whether Giant could still be liable for his negligent actions based on the level of control they had over him inside the store.

The COSA held that Giant did not have enough control to be liable for the actions of the Pepsi driver. Giant’s “general control” over the work of its product delivery drivers at the store was not enough. In order to be liable, Giant would need to have maintained control over the “operative details and methods” of the independent contractor’s work, including the “very thing from which the injury arose.”

Summary of Giant of Maryland v. Webb

This case arose out of a premises liability suit against Giant of Maryland LLC (“Giant”) in the Circuit Court for Anne Arundel County. The plaintiff alleged that she was shopping the frozen foods aisle when a “Giant employee” negligently struck her with a cart causing her to fall and suffer various injuries. The original complaint in the case named Giant as the sole defendant.

As it turned out, however, the individual involved in the cart accident with the plaintiff was not an employee of Giant. He was a Pepsi delivery driver employed by PepsiCo. Like many 3^rd party vendors, the Pepsi driver was in the Giant store restocking Pepsi products on the shelves. After learning this fact, the plaintiff attempted to file an amended complaint adding PepsiCo as an additional defendant. Unfortunately for the plaintiff, however, the statute of limitations on her claims had expired by that point. PepsiCo was promptly dismissed from the case.

Apparently undeterred by the dismissal of the proper defendant, the plaintiff bravely pushed ahead with its case against Giant. Not surprisingly, Giant filed a motion for summary judgment, asserting that because the individual involved in the accident was not a Giant employee, the plaintiff had no valid claims. The circuit court denied that motion without a hearing. On the eve of trial, Giant filed a Motion in Limine seeking to preclude the plaintiff from presenting evidence suggesting that the delivery driver was a Giant employee or that Giant was liable for his actions. That motion was also denied.

At the close of the trial, Giant filed a Motion for Judgment based on the same argument that it could not be liable for the negligent actions of a delivery driver who was not an employee. The trial court denied this motion. The jury awarded the plaintiff $400,000 in damages. Giant immediately appealed.

Legal Analysis

The issue on appeal was whether Giant was properly held liable for the negligent actions of a delivery driver who was not an employee, but rather an independent contractor employed by PepsiCo.

The COSA began by noting that under the general rules of Maryland tort law, the employer of an independent contractor is not liable for harm caused by that contractor’s acts or omissions. Appiah v. Hall, 416 Md. 533, 562-63 (2010)(citing Restatement (Second) of Torts §§ 409-415). However, the court noted that there are several exceptions to this general rule and that one of them applies where the employer retains extensive control over the contractor.

Specifically, the Maryland Court of Appeals has held that when an employer has “retained control over the details” of a contractor’s work, the employer can be held directly liable. Id. (citing Gallagher’s Estate v. Battle, 209 Md. 592(1956)). The rationale behind this exception is that if the employer exercises significant control over every detail of the contractor’s work, then the contractor is not really “independent” but more like an employee. See Comment c – Restatement (Second) of Torts § 414.

The plaintiff argued that Giant exercised sufficient control over the Pepsi delivery driver (and all 3^rd party delivery vendors) for this exception to apply. As evidence of Giant’s level of control over the Pepsi driver, the plaintiff cited the following facts:

The Pepsi driver had to check in with a Giant employee when he arrived and check out when he left.
The Pepsi driver used equipment owned by Giant (i.e., pallet carts) and Giant had rules on what type of equipment could be used in the store.
Giant reserved the right to monitor the Pepsi driver’s behavior and force them to leave the store if not acting properly.

The COSA held that this was not the type or level of detailed control that would make Giant liable for the acts of the PepsiCo contractor. In the Court’s view, Giant simply had the type of generalized control and authority over the PepsiCo driver that any employer has over an independent contractor working for them. Generalized control is not enough to extend liability.

The COSA explained that in order to hold Giant liable in this case the plaintiff would need to show that Giant exercised significant control over the “operative detail and methods” of the PepsiCo driver’s work, including the “very thing from which the injury arose.” The Court found that requiring vendors to check in and supervising their conduct in the store were simply the general rights that any store retains over contractors.

Based on this conclusion, the Maryland Court of Special Appeals found that the plaintiff did not have a valid legal claim against Giant. The COSA reversed the decision of the trial court and vacated the verdict. The case was remanded with instructions to enter judgment in favor of Giant.

Notes and Comments on Giant v. Webb

The former defense lawyer in me thinks this was the right decision in this case. There was simply nothing abnormal about the level of control Giant had over the Pepsi driver in this situation to warrant holding Giant liable. Holding Giant liable under these circumstances would have effectively eliminated the long-standing rule that employers are not liable for the actions of independent contractors.

At first, this might seem like an unfair result if you consider that the plaintiff will not get any compensation for her injuries. But keep in mind that the plaintiff would have clearly had a valid claim against PepsiCo.

In fact, the plaintiff tried to sue Pepsi after realizing that the guy involved in the incident was not a Giant employee. Unfortunately, the plaintiff must have waited until the last minute to file her lawsuit because by the time she attempted to add PepsiCo as a defendant it was already too late. The statute of limitations on her claim had apparently expired, just two months after her original complaint was filed.

But Still…

So I’m fine with the application of the existing law. But I would like to see the Maryland Court of Appeals overturn this case. I’m tired of companies using independent contractors, who are usually not the deep pockets of a Pepsi, to do the work that would normally be expected by the consumer (and, I guess, personal injury lawyers) to be done on the premises.