Vicarious Liability for Freight Brokers

A recent Illinois Appellate decision, with an over 18-million-dollar judgment, offers new guidance on vicarious liability in the trucking industry. In 2016, Gustavo Cornejo was struck while standing on the shoulder of a roadway by an 18-wheeler driven by Gordon Lewis, an employee of Dakota Lines, Inc. (“Dakota”). One of the primary issues in the case was whether Dakota, a freight carrier, was an agent of Alliance Shippers, Inc. (“Alliance”), its freight broker.

In trucking and shipping, a freight carrier is the entity that physically transports goods, often owning and operating its own fleet of trucks. A freight broker, on the other hand, takes a more facilitative role, acting as an intermediary between carriers and shippers and managing the shipping process to simplify operations and elevate efficiency.

The court in Cornejo v. Dakota Lines, Inc., 229 N.E.3d 546 (2023) tackled the question of whether the business relationship between Alliance and Dakota was sufficiently intertwined to qualify Dakota as Alliance’s agent (and as such put Alliance on the hook for the damage caused by Dakota’s employee via respondeat superior).

In the contract between the two companies, it was specified that Dakota was acting as an independent contractor. The court, in determining whether this contractual language could shield Alliance from liability, analyzed the degree of control Alliance had over the day-to-day operations of Dakota and its drivers.

The contract allowed Alliance to dictate where Dakota was to pick up goods, the length of time for delivery, the type of containers to use, and various other requirements to be met, such as Dakota remaining in good standing with the Federal Motor Carrier Safety Administration.

However, the court cited Sperl v. C.H. Robinson Worldwide, Inc., 408 Ill. App. 3d 1051 (2011) in exemplifying the sort of control needed to generate liability even where a contract asserts an independent contractor relationship. In Sperl, the freight broker hired, fired and paid drivers while also requiring regular and specific tasks to be performed by employees, such as checking trailer temperature and communicating constantly with the broker.

In contrast, Alliance had no authority to hire or fire Dakota’s employees, no control over the routes the drivers had to take and did not dictate the manner in which Dakota’s employees were to go about driving. The court ultimately ruled in favor of Alliance, finding they were not vicariously liable for Dakota’s employees. The opinion asserted that where control is only exercised over “ancillary aspects” of transporting goods, an agency relationship does not exist.

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For more information regarding how vicarious liability in the trucking industry may affect your business, please contact the qualified attorneys at Rock, Fusco & Connelly, LLC.?