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Managing Vicarious Liability

When are you liable for another’s acts, and how can you protect yourself?

As a fitness manager, you
recognize that certain acts
result in legal liability. Injuries caused by worn flooring surfaces, equipment malfunctions and inappropriate program designs exemplify what acts have legal consequences. However, the critical issue is who may
be legally responsible for injuries. If one of your personal fitness trainers designs an inappropriate program for a client and that client is injured, who is liable—you or the trainer?

The answer depends on several factors, including vicarious liability and scope of employment.

What Is Vicarious Liability?

Vicarious liability imputes the careless or wrongful act (called a tortious act, or tort) of one person (e.g., the trainer) to another (e.g., you, the manager) because of the employer-employee relationship. You may be held liable even if your conduct is blameless.

Vicarious liability is governed by the doctrine of respondeat superior, which translates to “let the person higher up answer” (Emanuel 2001). This doctrine is activated when employees commit torts during the scope of their employment (Emanuel 2001). The rationale is that employers and managers bear the burden of screening, hiring and orienting a fitness staff with stellar knowledge, skills and abilities. Moreover, managers are responsible for auditing certification status, maintaining general liability insurance and sustaining business costs, such as monetary damages for injuries. Note that this doctrine applies to all torts, including intentional ones, provided the wrongful acts were committed within the scope of the staff member’s employment. Acting for personal purposes is outside the scope of employment and does not activate the doctrine.

Defining Scope of Employment

Generally, a tort is within the scope of employment if the trainer/instructor
is acting with the intent of furthering the business purposes of the facility (Emanuel 2001), even if the means of doing so might be suspect or forbidden.

Several scenarios prove to be a bit complex with regard to scope of employment. First, employees’ commute
to and from work is usually considered outside the scope of employment (Emanuel 2001), since you have no control or apparent authority over your staff at this time. However, the use of cell phones could change this opinion, since you might, in fact, be conversing and doing business with staff members during their commute. For example, trainers frequently use their cell phones to check for canceled appointments, and fitness managers frequently call to check on trainers’ timecards and monthly quotas. Moreover, commutes to professional conferences, continuing education seminars and staff meetings are work-related and should be deemed within the scope of one’s employment.

A second scenario involves employees who make short digressions for personal reasons while on business trips
or commutes. This is called frolic and detour. Examples include stopping for coffee, using a restroom, going to the bank or grabbing some lunch. Modern courts hold that employees are within their scope of employment if the deviation is “reasonably foreseeable,” and courts determine this by looking at the distance of the detour (Emanuel 2001). Lunch and restroom breaks are certainly foreseeable. If the digression is slight
in terms of distance/mileage, then the detour is within the scope of employment. If the detour is of a very long distance, it is considered unforeseeable
and not within the scope of business. Unforeseeable detours include lengthy social visits or illegal activities. If the tort is committed during this unforeseeable detour, then the manager is
not liable for that trainer’s tort under respondeat superior.

The Actions of
Independent Contractors

Because vicarious liability is characteristically applied to employees, not
independent contractors, the alleged wrongdoer (a.k.a. “tortfeasor”) must be legally classified as an employee.

Employees are subject to the control of the person who hired them (Emanuel 2001). This control applies to the physical details of all work. Trainers or instructors who are employed by commercial health-club chains are classified as employees.

Independent contractors are
individuals who, although hired by you
to perform certain jobs, are not under
your immediate or apparent control
and may do their work as they see fit (Emanuel 2001). Trainers who solicit and train clients on their own are independent contractors, even if they pay you a fee in exchange for access to equipment. You are usually not liable for the torts of independent contractors, with some exceptions.

Negligent Hiring and Supervision. The first exception is your own liability. If you hire an independent contractor you know or suspect will not perform work safely, diligently and professionally, you may be liable for your own negligent hiring and/or negligent supervision of that individual (Rest. 2d §411). Likewise, your failure to inspect the work of the hired individual may prove risky. This liability is particularly pertinent for fitness managers who hire trainers without requiring any degrees or certifications. By knowingly hiring such individuals,
you may be putting yourself at risk for
liability, absent concrete proof of that person’s competency.

Delegating “Nondelegable” Tasks. A second exception deals with nondelegable duties (Emanuel 2001). Some duties are deemed so important that they should not be entrusted to anyone. If you hire independent contractors to perform such tasks and they perform poorly, you risk liability. An
example is the duty of landowners to keep the premises safe for business visitors. As a manager, you will be held
liable for the negligent maintenance of club equipment, facilities or premises even if that maintenance is performed by independent contractors.

Providing the Appearance of Employment. Vicarious liability may be activated via agency by estoppel, or apparent authority, if an independent contractor appears to be an employee to the average person (Connaughton & Eickhoff-Shemek 2003). If your facility’s actions have created the appearance that an independent contractor is an employee, then you and/or the facility may be liable for that independent contractor’s wrongful acts. For example, members of a facility may reasonably assume that an independent contractor who wears a facility uniform is an employee (Connaughton & Eickhoff-Shemek 2003).

Defining Employment Classification. Finally, usage of the term independent contractor in employment contracts is open to legal interpretation. Various factors must be evaluated to properly classify a trainer/instructor before liability is imputed to you (Connaughton & Eickhoff-Shemek 2003). Factors leading to a classification of employee, rather than independent contractor, include

  • employer control over the
    worker’s tasks
  • employer direction or supervision
  • employer provision of tools
    or supplies
  • long-term employment
  • regular payment schedules, as opposed to payment at the completion of the job

Managing Your Risk

To enhance professionalism, you must recognize the legalities and consequences of employment classification. Independent contractors will be held personally accountable for their tortious acts, absent any of the aforementioned exceptions. Encourage your independent contractors to carry liability insurance and to use protective documentation (i.e., waivers) to legally safeguard

Employees do not have this same burden. However, your responsibility
for employees carries a large burden, since you may be held accountable for their wrongful acts. To manage this risk, keep the following tips in mind (Connaughton & Eickhoff-Shemek 2003):

  • Diligently hire, or contract the services of, competent professionals.
  • Put all information regarding the details of employment (status, pay, burden of purchasing insurance, etc.) in writing.
  • Require independent contractors who work for you to purchase professional liability insurance. (Most employees will be covered by your general policy, but it might be worthwhile to recommend that they, too, purchase their own insurance to minimize the risk to you.)
  • Carefully inspect or supervise all employee activity.

Indemnification to the Rescue

Vicarious liability seems to work in favor of negligent employees, since they escape responsibility by shifting their legal burdens onto you. This apparently unjust situation carries a remedy: indemnification. Indemnification allows you to recover the full amount of a damages payment from a negligent employee (Rest. 3d §22[a][2][i]). Therefore, unjust enrichment is avoided, and all parties have a legal remedy for their respective misfortunes.

Because the rules on indemnity vary from state to state, it is impossible to assert that every employer will have a claim for indemnity against his or her employees. In general, it is fitting to suggest that if you are only vicariously liable for another’s conduct, you will be indemnified.

More often than not, employment contracts contain provisions for indemnification. Under this type of contract, all employed individuals, regardless of classification, are subject to the law if they fail to conduct themselves in a prudent, ethical and professional manner.

program director

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