Who's In Charge?

Apr 1, 2005 12:00 PM, By MICHAEL FICKES

Some companies today appear to be exerting greater management control over their contract security guard forces. While greater control may improve security, it may also create legal liabilities.

“Prior to Sept. 11, businesses generally didn't want day-to-day oversight of the security force,” says Christopher Grniet, a vice president with New York-based Kroll Inc. “Companies provided input on how they expected security officers to act. Guards got their marching orders from the guard company. A guard supervisor from the contract service came by a couple times a week to check on things. If a problem arose, the company told the guard service to fix it.”

However, a lot has changed since Sept. 11. Today, Grniet says, companies have begun to manage contract security officers more closely. Companies have taken an interest in how security officers are trained. What do the contract guard service policies, procedures, and post orders say? Do they cover daily activities as well as emergency or crisis situations? “When a company takes on responsibilities for oversight and day-to-day functions, it has to be careful,” Grniet says.

The reason involves the legal distinction between an employee and an independent contractor. “The right to control distinguishes the two,” says William Alden McDaniel, Jr., a Baltimore attorney with extensive commercial litigation experience in courts around the country. “It is not the actual exercise of the right, but the right itself, whether exercised or not.”

The laws of most states have traditionally distinguished between an employee's acts and those of the employees of independent contractors, McDaniel continues. A company is liable for anything an employee does within the scope of employment, but not for the torts of persons employed by independent contractors hired by the company.

If a company hires its own security guards, the company is responsible for what they do on the job. But if a company hires a guard service, it usually is not responsible. One exception involves duties that employers cannot delegate, such as protecting against harm from inherently dangerous activities. If a contract guard fell asleep and permitted unauthorized access to explosives stored on the premises, the company could not blame the guard service for injuries resulting from this access. “In certain situations, you can't blame your guard company if it fails,” McDaniel says. “You still have an independent duty, sometimes called a non-delegable duty, with regard to some matters — the conduct of inherently dangerous activities such as the storage of explosives, for example. Also, a company might be liable for its own negligence in the retention of an independent contractor.”

For more normal activities, however, the employer will probably not be liable for the wrongs committed by employees of an independent contractor. If a contract guard driving patrol around the parking lot negligently hits another car, the guard service, not the employer, would probably bear the liability.

But, and here's the rub, the other driver might take legal action and claim that the contract guard is a company employee, arguing that the company has the right to control the contract guard's behavior.

Over the years, the courts have heard many cases in which plaintiffs and defendants have argued about the principle of the right to control. While state laws vary, the principle remains an important consideration for any company that manages independent contractors such as contract guard companies.

Two cases, same court, same defendant, different decisions

In 2001, the mother of a 12-year-old girl accused of shoplifting candy from a Safeway grocery story sued Safeway and Argenbright Security Inc. The mother alleged that an Argenbright contract security guard stopped the girl on suspicion of shoplifting and that, while searching the girl, the guard touched her in a sexually improper manner. The trial court dismissed the claims against Safeway. When the mother appealed, the District of Columbia Court of Appeals agreed with the trial court and said: “Safeway can be held vicariously liable for Hunter's conduct only if the evidence establishes a master-servant relationship between Safeway and the guard. No such relationship was shown on this record.”

To support its conclusion, the Court looked back to a decision it issued in 1982 in another case involving Safeway and a contract security guard. In that earlier case, a jury found Safeway liable for an assault and battery committed by a contract security guard working at a Safeway grocery store. The Appeals Court agreed with the jury verdict, saying: “We hold that Safeway is vicariously liable for the actions of the guard acting within the scope of his employment.”

What's the difference between this case and the shoplifting case? In the shoplifting case, no evidence showed that Safeway had a right to control the security guard. The second case offered reams of evidence to that effect.

“Although Seaboard hired the guards,” wrote the court, “Safeway had the right to discharge an individual guard, subject to Seaboard's approval. Safeway hired the guards to work on a continuous basis at several of its stores. Most importantly, Safeway enjoyed the right to control the guards' conduct.”

The Court also cited trial testimony. The security guard said the store manager had told him at times to lock the doors and to deal in certain ways with problem customers. The manager testified to instructing the guards to keep children out of the doorway and to watch for shoplifters. The victim of the assault and battery testified that the manager had motioned the guard over at the beginning of the incident.

“These specific instances of actual control are evidence of the general right of Safeway to control the guard in the performance of his duties,” wrote the Court. “Thus we find there (is) evidence upon which a reasonable jury could properly have found that the guard was a servant and not an independent contractor of Safeway, and that accordingly, Safeway is liable for the guard's allegedly tortious conduct which gave rise to this action.”

In the end, what matters is not that a company manager might occasionally tell a contract security guard to do something, McDaniel notes, but whether a company has the right to direct a security guard in his or her daily activities.

This issue is certainly important to companies seeking to enhance security through stronger management oversight. But it is important in other ways too. At the end of March, more than 3,000 workers filed a class-action lawsuit against Hewlett Packard, saying they were denied benefits because the company misclassified them as contractors instead of employees. Lawyers for both sides will likely bring up the question of the right to control.

SHARE YOUR STORY…

This page offers an opportunity for readers to share management lessons they have learned and to provide other helpful information to their peers in the industry. To offer suggestions, or to contribute to this page, contact Larry Anderson at (770) 618-0118 or e-mail landerson@primediabusiness.com

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