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Is your company haunted by risk?

Security managers charged with protecting personnel, property, and information may seek to limit the risk of loss through risk transfer or similar techniques. Depending on the circumstances, however, the use of consultants and other strategies intended to redirect risk may not legally reduce an organization's liability.

Understanding how the courts view a company's responsibilities and when a business is likely to be held liable for incidents that occur on its property can help security professionals learn about problem situations and structure effective policies. As the following cases illustrate, key criteria include management's control over contract forces, the instructions given temporary forces, such as off-duty police officers, and the extent to which a duty is judged nondelegable.

Moonlighting police. In a 1977 case, Davis v. DelRosso, a cafe had an informal arrangement with the local police department in which the department supplied the cafe with an off-duty police officer to provide security during evening hours. The cafe paid the police department for these services and the police officers received their shares.

The police officer in the case had worked at the cafe before, knew the manager, and understood, without the need for express instructions, that he was there to inhibit disturbances and quell them if they occurred. An altercation developed one evening at the cafe, and the off-duty police officer struck a patron in the mouth, causing considerable damage. The patron sued the off-duty officer, the cafe, and the city for assault, and the patron was awarded a $25,000 judgment.

The appellate court found that the jury was entitled to attach significance to the fact that the police officer's task was similar to that of a bouncer, that

his work was to be performed primarily on the cafe's premises, that he worked alone and not under the command of a superior officer, and that he was not acting as a public law enforcement officer but as an employee of the cafe for its private purposes on private premises. The jury considered that the off-duty officer was implicitly authorized by the cafe to use force only in appropriate situations. When he used force excessively or inappropriately, however, it did not relieve the cafe of liability by putting these tortious acts beyond the scope of employment.

Master control. In the 1982 case of Safeway Stores, Inc. v. Kelly, a patron who had just purchased his groceries noticed that an automatic exit door was not working properly. He informed the store's assistant manager, who responded by asking the patron to leave. The customer wanted the police called and, holding his bag of groceries, stood in the front of the store to await the police. A police officer responded, talked to the manager, and told the patron that the manager wanted him to leave. As the patron was about to respond to the officer, a contract security officer grabbed the patron around the throat while the police officer stuck his knee into the patron's chest.

The patron was handcuffed, taken to the back of the store, and later transported to the police precinct, charged with unlawful entry. The criminal charges were dropped, and the patron sued the grocery store for assault and battery and false arrest arising from the actions of the contract security officer. The chief security investigator for the grocery store stated that the store did not hire, pay, or train the contract officers or tell them specifically how to do their work. The sixteen-store chain and the contract agency had an oral agreement that the agency would supply officers to the stores, and the store chain would pay one lump sum to the agency.

The investigator explained at the trial that the officer was under the direction of the store manager who had operational control over the officer. The manager could replace an officer if dissatisfied.

In upholding a judgment for $15,000, the appellate court indicated that the determining factor was whether the grocery store was liable for intentional torts to the patron caused by a contract security officer. The store argued that it avoided liability since the guard service was hired as an independent contractor.

In determining whether a master-servant relationship exists, the court considered the selection and hiring of the servant, the payment of wages, the power to discharge, the power to control the servant's conduct, and whether the work is part of the regular business of the employer. Except for the power to control the servant's conduct, the court noted that none of the elements by themselves were controlling with regard to whether a master-servant relationship exists.

The decisive test was whether the employer has the right to control and direct the employee in the performance of his or her work and how the work is to be done. In characterizing the right to control as the determining factor, the court meant the right to control an employee in the performance of a task and in its result, not the actual exercise of control or supervision. In this case, the officer was found to be a servant and not an independent contractor of the grocery store. The court's determination made the store liable for the officer's alleged tortious conduct.

In addition, the court defined master and servant and distinguished a servant from an independent contractor by the following factors. A master is a principal who employs an agent to perform service in his or her affairs and who controls or has the right to control the physical conduct of the other in the performance of the service. A servant is an agent employed by a master to perform service in his or her affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.

A servant is distinguished from an independent contractor by the following criteria:

* The extent of control the master exercises over the details of the work under the agreement

* Whether the worker is engaged in a distinct occupation or business

* Whether the work is usually done under the employer's direction or by a specialist without supervision

* The skill required in the particular occupation

* Whether the employer or the worker supplies the tools and the workplace for the worker

* The length of time the person is employed

* Whether the payment is linked to the time worked or the job performed.

* Whether the work is a part of the employer's regular business

* Whether the parties involved believe they are creating a master-servant relationship

* Whether the principal is or is not in business

Joint control. In the 1980 case of Gulf Oil Corporation v. Williams, a contract security officer was assigned to a gas station through a contract between the gas station and an employment agency. The officer believed a customer had robbed, or was attempting to rob, the cashier. The officer followed the customer to his car and shot him in the head and hand.

At the trial, testimony indicated that a security agency hired the officers to work at the gas station, assigned them their duties, supervised them, and directed them in the amount of force to be used. The security agency had a contract with the employment agency to supply the officers to the gas station.

Other testimony indicated that the gas station's management had the power to manage the officers, including hiring, firing, supervising, and evaluating them. The jury decided for the plaintiff and decided on a judgment of $99,719.77 against the security agency, the gas station, and the guard, since the evidence supported that both the security agency and the gas station had control over the employee.

Nondelegable duty. In the 1972 case, Dupree v. Piggly Wiggly Shop Rite Foods, Inc., the question was whether a food store should be liable for the tortious conduct of the security company's employees. A customer who was arrested for shoplifting sued the food store and the contract security company that worked exclusively for the store for false imprisonment and malicious prosecution.

The security company was to provide external and internal security for the store. The store contended the incident was proximately caused by the acts of a third party--the security company--over which it had no control, and that the security company was not an agent, servant, or employee of the store. The jury found that the plaintiff was falsely imprisoned, that the security officers were not acting as employees of the food store, and that the security company was acting as an independent contractor.

An employer of an independent contractor is usually not liable for the negligent acts committed by the contractor or the company's employees. The court found that the independent contractor-store relationship would not relieve the store from liability because it had a nondelegable duty to provide the plaintiff a safe place to shop.

The court determined that an employer may not employ a special agency to handle store detective work and then escape liability for intentional torts on the ground that the guard agency and its employees are independent contractors. The court noted that a store cannot absolve itself from liability for certain duties by delegating its performance to an independent contractor.

The court held that the store cannot obtain immunity from liability for false imprisonment by employing an independent contractor to protect its property. The store would be liable for such an action if it had directly selected and paid the contractor, expressly retaining the power of control and removal.

When a store undertakes these functions, its duties are personal and nonassignable. When the company arranges for and accepts the service, it will not be permitted to say that the relationship of master and servant, as far as responsibility is concerned, does not exist. Negligence does not enter into the tort of false imprisonment. A $25,650 judgment was rendered to the plaintiff.

These four cases show that risk could not be reduced, eliminated, or transferred by redirecting it to others. Keeping abreast of the law as it relates to security matters and consulting appropriate counsel as needed will help the security manager reduce or forestall loss from litigation.

David A. Maxwell, CPP, is professor of law and coordinator of security management programs at the University of New Haven in West Haven, Connecticut. He is a member of ASIS. Patricia A. Morrissey is an attorney with Morrissey and Morrissey in Stratford, Connecticut, and is an adjunct professor of law at the University of New Haven.
COPYRIGHT 1993 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:contract security hiring risks
Author:Maxwell, David A.; Morrisey, Patricia A.
Publication:Security Management
Date:Oct 1, 1993
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