Agency Relationships in Tennessee Taxicab Companies: Who Carries Liability?

1. Agency Relationships in Tennessee Taxicab
Companies: Who Carries Liability?
Christina Choe, Jerry Lu, Daniel McCoy, Erica Swallow
Professor Calderon
Law, Business and Society
April 24, 2009

2. Introduction
In Gleaves v. Checker Cab Transit Corp., Inc., Robert J. Mosley, a driver for Checker
Cab, began work at about 5:30 a.m. and reported “off-duty” by radio at approximately 9:20 p.m.
Shortly after reporting “off-duty,” while en route home, Mosley’s high speed attracted the
attention of City of Lakewood police officers and a high speed chase ensued. The chase ended at
about 10:05 p.m. when Mosley collided with a vehicle operated by Michael C. Gleaves. Gleaves
sustained serious injuries.1
Shortly thereafter, Gleaves brought action against Checker Cab on the grounds that
Checker Cab was liable for Mosley’s actions under the doctrine of respondeat superior (Latin:
“Let the master answer.”), which states that the employer is responsible for the actions of his
employees, when performed within the scope of employment. Gleaves sought to prove that
Checker was negligent in its hiring, supervision and licensing of Mosley, a manic-depressive
with a history of violent behavior.
The above-mentioned case was litigated in trial court, appealed to the Court of Appeals,
and appealed, yet again, to the Supreme Court of Tennessee. The main issue of the proceedings
was whether vicarious liability should be held applicable to Checker Cab for the tortious act
committed by driver, Robert Mosley. Under the doctrine of respondeat superior, an agent’s
employer can be vicariously liable for the tortious actions of the agent that occur within the
scope of employment. This doctrine stems from the reasoning that since an agent acts in the place
of his or her principal, the principal should therefore be held responsible for those actions.
Essentially, vicarious liability can be viewed as an application of the common law principle, qui
facit per alium facit per se, “one who acts through another, acts in his or her own interests”
1
Gleaves v. Checker Cab Transit Corp., Inc., 15 S.W.3d 799 (Tenn. Supr. 2000). In this 2000 case, the Supreme
Court of Tennessee reversed the decision of the Court of Appeals and reinstated the trial court’s decision that
Checker was vicariously liable for Mosley’s negligent actions under the Nashville Metro Code.
1

3. (Legal). Since an employer can control and dictate what its employee does, the employer-
employee relationship is comparable to a master-servant relationship. Applying the doctrine of
respondeat superior, since the employer (master) acts through its employees (servants), any
wrongs that the employee commits is reflected upon the employer, as if the employer had
committed the wrong himself, for which he must accept responsibility (Vicarious). Thus, in order
to impose vicarious liability upon a principal, an employer-employee relationship must first exist
between the principal and the agent. If that relationship fails to exist, vicarious liability cannot be
considered applicable. Employers of independent contractors are usually not held vicariously
liable for the tortious actions of the contractors because they do not possess the same degree of
control over the contractors as employers do over employees. The fact that the independent
contractor has full control over his work means he has sole responsibility for his actions and
consequently, must bear complete liability.
In order to understand vicarious liability, one must first determine whether an agency
relationship is either an employer-employee relationship or an employer-independent contractor
relationship. Numerous factors are considered when distinguishing between an employer-
employee relationship versus an employer-independent contractor relationship. Such factors
include examining the nature of the work, the degree of skill required for performance, which
party provides the necessary tools, whether payment is by time or by job, and whether one party
has the right to terminate the contract at anytime (Bagley). The main factor, however, that
determines whether an employee or independent-contractor relationship exists is the extent of
control the employer has over the agent. The main trait of an employee-employer relationship is
that the employer can not only control the results of the work, but also the details of how the
results are to be obtained. The employer can dictate how he wants the job done, by what means,
using what resources. On the other hand, the hallmark of the employer-independent contractor
2

4. relationship is that the contractor has exclusive control over how he performs his work, and is
only responsible for producing the end result (Vicarious).
Determining in the court of law, whether a worker is under an employer-employee
relationship or an employer-independent contractor relationship, is quite difficult. The fact that
Gleaves v. Checker was litigated three times reveals the difficulties legal experts face when
attempting to deliberate on this issue. In the end, litigations are resolved based on each party’s
interpretation of material facts. In the case of Gleaves v. Checker, the main material facts
considered when determining whether Mosley was an employee or independent contractor
included: (1) all Checker taxicabs operate under a single “Certificate of Public Convenience and
Necessity” as mandated by the Nashville Metro Code2, (2) Checker does not have any control
over hiring and firing of drivers3, (3) Checker provides each operator with Checker insignia,
lights, radio, and fare meters for a flat weekly fee, and that (4) all Tennessee taxicab companies
are required to file The Liability Insurance Agreement for each taxicab operated under their
franchise, which places them under “complete liability”4. These same material facts can have
multiple interpretations, supporting either side of the argument, thus creating the need for
litigation.
After thorough analysis of similar cases, one arrives at the question: Within the state of
Tennessee, can taxicab drivers be universally classified as independent contractors or
2
No person shall operate or permit a taxicab or motor vehicle owned or controlled by him, and as defined in Section
6.72.010 as amended, upon the streets and roads of the metropolitan government area without having first obtained a
Certificate of Public Convenience and Necessity from the taxicab licensing board.
3
Checker is a dispatching service. All hiring occurs through a board of independent owner-operators that hire and
fire employees. Each owner-operator is free to hire relief drivers, subject to board approval. Furthermore, the board
acts on all complaints against drivers and applies discipline.
4
“These [Liability Insurance Agreements] shall place all vehicles operated under their franchise in the taxicab
company’s complete possession and control, and the taxicab company shall assume complete liability for each and
every vehicle for which it enters into this agreement”. Furthermore, the agreement also provides “that the above-
named taxicab company, partnership or sole proprietorship shall assume complete liability for each vehicle being
operated under its name, color, emblem, design and insignia and shall be liable for any personal injuries or property
damage to third parties as the result of the negligent use of this (these) vehicle(s).”
3

5. employees? If possible, litigation concerning vicarious liability on taxicab companies would be
greatly simplified and courts could be spared from time-consuming deliberations.
Drivers as Independent Contractors
To support the claim that Checkers Cab used independent contractors, a recent federal
court decision on FedEx deliverymen should be applied. On November 7 th 2008, the National
Labor Relations Board brought suit against FedEx, arguing that the labor union Teamsters had a
right to organize a FedEx deliverymen union. The case depended on the court classifying the
deliverymen as employees or contractors. FedEx claimed their drivers were independent
contractors who lacked the right to unionize. The NLRB argued they were employees, freely
able to partner with the Teamsters.
FedEx deliverymen work in a similar capacity and under a similar principal-agent
relationship as taxi drivers for Checker Cab. FedEx deliverymen must meet certain requirements
such as wearing FedEx uniforms, using certain delivery trucks, and displaying FedEx logos. The
taxi drivers employed by Checkers Cab must also meet these requirements for their employer in
order to work. Given these similarities, the resulting decision of this case could be applied to
whether Checkers Cab taxi drivers function as employees or independent contractors.
On April 21, 2009, The United States Court of Appeals ruled in the case FedEx v. NLRB5,
FedEx deliverymen were correctly classified as independent contractors. Furthermore, the court
cited that FedEx’s level of control was not strong enough for deliverymen to be considered
employees. Since both FedEx drivers and Checker Cab taxi drivers operate under similar
circumstances, Checker Cab drivers should also be considered independent contractors. Under
this line of reasoning, vicarious liability is inapplicable as it can only be applied in employer-
5
FedEx Home Delivery v. National Labor Relations Board, International Brotherhood of Teamsters. No. 07-1391.
21 April 2009.
4

6. employee relationships. This federal case sets an important precedent for dealing with employer-
employee and employer-independent contractor relationships, especially in regards to
deliverymen and other similar jobs, including taxi drivers and truck drivers.
Even in the case that Mosley could be classified as an employee, one can argue that he
was acting out of scope of employment and that vicarious liability does not apply. In the case of
Cheatwood v. Curle6, a car dealership employee used a dealership car outside the scope of their
employment and caused a car accident. The court issued a summary decision and ruled that torts
committed by workers while beyond the scope of employment cannot make the employer
vicariously liable for resulting damages. The case highly parallels the circumstances found
within Gleaves v. Checker, as there is ample evidence to provide for the argument that Mosley
also committed his tort outside the scope of employment. That is, it is plausible to argue that a
high speed chase is far beyond the scope of employment of taxi drivers. This along with the fact
that Mosley had clocked out could classify him as off-duty and thus out of the scope of
employment. Along this reasoning, Checkers Cab’s argument that Mosley was operating outside
the scope of employment can be based on this past precedent.
Once again, even if Mosley is identified by the court as being an employee, there are
ways to prove that his employer is still not vicariously liable. The “traveling man” exception also
comes in play in the case of Gleaves v. Checker. Ordinarily, an employer is not vicariously liable
for an employee’s negligence while the employee is traveling to and from work 7. However, the
“traveling man” exception8 only applies in certain circumstances. The exception states that “ if the
6
Cheatwood v. Curle, Davis, Lincoln Mercury, LLC. No. W2007-02204-COA-R3-CV. (2008 Tenn. App.)
7
Sharp v. Northwestern Nat. Ins. Co., 654 S.W.2d 391, 392 (Tenn. 1983)
8
Under certain circumstances an employer may be held vicariously liable under the “traveling man” exception, put
forth in Smith v. Royal Globe Ins. Co., 551 S.W.2d 679, 681 (Tenn. App. 1990) and discussed in Craig v. Gentry, 792
S.W.2d 77 (Tenn. 1977): “if the work of the employee creates the necessity for travel, he is in the course of his
employment, though he is serving at the same time some purpose of his own.”
5

7. work of the employee creates the necessity for travel, he is in the course of his employment, though he is
serving at the same time some purpose of his own.” Note that the employee must be acting under scope of
employment. It is reasonable to argue that a taxi driver’s duties may fall under the “traveling man”
exception, as the very nature of the occupation involves constant traveling. However, categorizing an off-
duty high speed police chase to be within the scope of employment is a stretch. In such a case, if Mosley
was found to be acting outside the scope of employment, the “traveling man” exception is inapplicable.
One could argue, given the circumstances, that Mosley is best classified as an
independent contractor of Checker Cab. He was hired and supervised by an independent board of
owner-operators like himself, had complete control over his schedule and the methods of work
he performed, and kept all fare proceeds. Checker Cab acted only as a dispatcher, loaning out
insignia. Furthermore, based on past precedences set by multiple courts on the state and federal
levels in regards to agency relationships, the argument Checker Cab taxi drivers are best
classified as independent contractors is well-justified.
Drivers as Employees
The issue can also be examined from a “pro-employee” perspective. In the case of
Arledge v. Omega Meats, Inc., plaintiffs Charles Dayne and Julie E. Arledge, husband and wife,
brought action against Omega Meats, Inc. Corporation, seeking to recover compensatory
damages for injuries suffered due to the negligent behavior of company truck driver, Willis
Collins. Although no official judgment was directly offered that explicitly determined whether
Collins was an employee or independent truck driver of Omega Meats, the case highlights the
key factor that Tennessee courts consider most important when differentiating between the two
classifications. There are a variety of factors recognized by Tennessee law in determining
whether an alleged tort-feasor should be classified as an employee or independent contractor,
many of which are mentioned above. However, Arledge v. Omega Meats emphasizes the fact that
6

8. the key factor when distinguishing between the relationships is control, not, for example,
superficial classifications within contract provisions. Specifically, Tennessee courts examine the
degree of control an employer has over the agent, such as the ability to dictate the details of the
job: time, place, method, and means. More importantly, “the test is not whether the right to
control was actually exercised, but only whether the right to control existed9.”
The NLRB v. Friendly Cab Company case clearly exemplifies the application of the
“control test” in classifying one as an employee. In 2004, the National Labor Relations Board
(NLRB) brought suit against Friendly Cab Company, seeking a relabeling of the Friendly Cab
taxi drivers as employees rather than independent contractors. They argued that Friendly Cab
Company classified their cab drivers as independent contractors in order to circumvent the
National Labor Relations Act, which exists to “protect the right of employees to participate in
collective bargaining for the purpose of negotiating the terms and conditions of their
employment10.” There were several factors supporting the NLRB’s claim that the taxi drivers
were effectively employees, not independent contractors, though they were contractually labeled
as so. A key point was the fact that Friendly Cab Company had a Standard Operating Procedures
Manual that detailed specifically the manner in which the cabs should be driven, such as how to
appropriately accelerate and stop. Evidently, Friendly Cab had more than substantial control over
the cab drivers’ actions. In addition, Friendly Cab Company imposes strict requirements on their
cab drivers, which if not followed, could result in a loss of employment. For example, drivers
must carry advertisements on their cabs even if it is against their will, as failure to do so could
jeopardize their job11. Further considerations included the existence of strict dress codes, and the
9
Julie E. Arledge and Charles Dayne Arledge v. Omega Meats, Inc. and Willis Collins, III, U.S. Dist. LEXIS 22100,
22103 (T.N. Cir. 2003). 7
10
National Labor Relations Board v. Friendly Cab Company, Inc., 512 F.3d 1090, 1093 (C.A. Cir. 2008).
11
NATIONAL LABOR RELATIONS BOARD, 512 F. 3d at 1097
7

9. fact that cab drivers were barred from subleasing their vehicles to others. Therefore, it was
obvious that Friendly Cab Company exerted significant control over the cab drivers, inhibiting
their freedom to choose how to conduct work. The fact that Friendly Cab Company was so
highly involved in dictating the details of the job effectively cemented its employer-employee
relationship with the drivers.
In the case of Gleaves v. Checker, the Supreme Court of Tennessee ruled that Checker
Cab Transit Corp. was indeed liable for the damages caused by defendant Robert Mosley. The
key consideration of this case was whether the Checker Cab should be held directly liable under
Nashville Metro Code 6.72.210: Liability Insurance Agreement12. The Supreme Court of
Tennessee found that the ordinance and the liability agreement imposed liability on Checker Cab
Transit, regardless of the status of the driver, whether on-duty or off-duty, and reversed the
decision of the Court of Appeals. Thus, the fact that Mosley committed the tort when he was
“off-duty” no longer pertains to the case, as described under the ordinance and agreement;
Checker Cab Transit assumes “complete liability” over all vehicles that operate under its name13.
Though the decision of the Supreme Court was based solely on the details of the
Nashville Metro Code and liability agreement, it can be argued that even in the absence of the
ordinance and agreement, Checker Cab Transit Corporation would still be held vicariously liable
for the torts committed by driver, Robert Mosley. To apply vicarious liability, under the doctrine
of respondeat superior, an employer-employee relationship must be proven to exist and the tort
committed must be within the scope of employment. As mentioned before, the key determinant
of such a relationship is the degree of control. In employer-employee relationships, the employer
enjoys the power to dictate where, when, and how the job is completed. When applied to
12
Refer to page 4, footnote 4 8
13
Gleaves v. Checker Cab, 15 S.W.3d at 801 (Tenn. Supr. 2000)

10. Gleaves v. Checker Cab Transit Corporation, it is evident that the relationship between Mosley
and Checker Cab is characteristic of an employer-employee relationship. Since the Checker Cab
is essentially a dispatching company, its business entails receiving telephone requests for taxi
cabs from customers, consequently relaying the requests to the taxi drivers. Therefore, Checker
Cab can effectively control the time the drivers work and the location. The manner in which the
jobs were completed is also under Checker Cab’s power. Drivers take customers from location
to location, in cabs under the company’s insignia, using meters provided by the company. Aside
from the route to take that is left to the driver’s discretion, all other aspects of the job seem to be
controlled by Checker Cab Corp, reflecting the existence of an employer-employee relationship.
Looking towards other factors, evidently, taxi cab driving is not a skill-intensive job; drivers are
required to pay weekly fees to Checker Cab, and most of the tools required for work are provided
by Checker Cab (i.e. meter, top light, radio, insignia, paint scheme, etc). Such characteristics
portray the low degree of bargaining power the cab drivers possess, again typical of employee-
employer relationships. Having determined the existence of an employee relationship, the scope
of employment must be considered. Although the tortious act occurred when Mosley was “off-
duty,” it is arguable that due to the nature of the occupation, the “traveling man” exception could
be applied. Since the very nature of cab driving requires constant traveling, his scope of
employment has an “indefinable boundary” that essentially negates the status of “off-duty,”
making the employer liable at all times the employee is in the vehicle14.
Conclusion
It is evident through extensive research that the majority of vicarious liability cases
involving taxicab drivers in Tennessee are resolved based on the existence of the municipal
14
Gleaves v. Checker Cab, 15 S.W.3d at 802 (Tenn. Supr. 2000) 9

11. ordinance, requiring taxicab companies to sign Liability Insurance Agreements with all taxi cabs
operating under their name. As the insurance agreement directly imposes complete liability on
the cab company for each and every cab under their control, the issue of vicarious liability becomes
irrelevant. However, it can be argued that even without this ordinance, Tennessee cab drivers can still be
classified as employees. Because almost all taxi companies act as dispatchers, they effectively control
when and where their drivers meet passengers. Parallel to other employer regulations, this level of
control strongly suggests the existence of an employer-employee relationship between taxi companies and
taxi drivers. If the taxi drivers are classified as employees, vicariously liability becomes applicable to the
cab companies for the tortious acts committed by the drivers.
On the other hand, any proposal to strictly classify Tennessee taxi drivers as employees is
weakened in light of the recent federal case FedEx v. NLRB. The fact that the United States Court of
Appeals ruled that FedEx deliverymen were classified as independent contractors is particularly
compelling as FedEx deliverymen work in very similar situations as Tennessee taxi drivers. Considering
that this case was litigated on the Federal level, it holds greater legal weight and can thus be used as a
precedent against finding the taxi drivers as employees.
The arguments for classifying Tennessee taxicab drivers as strictly employees or independent
contractors are both credible in their own respects. However, in light of the recent FedEx v. NLRB case
decision, it becomes more difficult to apply a strict classification to taxi drivers. Thus, it is more plausible
to address the issue on a case-by-case basis. In addition, the level of control over taxi drivers can
fluctuate between the different municipalities within Tennessee, possibly changing the classification of
the drivers in each case. To apply a single classification over all taxi drivers would fail to take into
account the diverse agency relationships present at taxi services across varying municipalities.
10

12. References
Bagley, Constance E. and Diane W. Savage. Managers and the Legal Environment: Strategies
for the 21st Century, Fifth Edition. Mason, Ohio: Thomson West, 2006. 166.
Cheatwood v. Curle, Davis, Lincoln Mercury, LLC. No. W2007-02204-COA-R3-CV. (2008
Tenn. App.) LEXIS 391.
<http://www.tba2.org/tba_files/TCA/2008/cheatwoodc_070908.pdf>.
<http://pacer.cadc.uscourts.gov/common/opinions/200904/07-1391-1176680.pdf>.
“Independent Contractor (Self-Employed) or Employee?” Businesses. April 17, 2009. Internal
Revenue Service. United States Department of the Treasury.
<http://www.irs.gov/businesses/small/article/0,,id=99921,00.html>.
"Legal definition of qui facit per alium facit per se." Duhaime.org - Bringing Legal Information
To The World. 20 Apr. 2009
<http://www.duhaime.org/LegalDictionary/Q/Quifacitperaliumfacitperse.aspx>.
" Vicarious Liability – Employers’ Liability for Wrongdoings of Employees." Wolf, Baldwin &
Associates, P.C. - Lawyers / Attorneys at Law in Southeastern PA. 2007. 20 Apr. 2009
<http://www.wolfbaldwin.com/lawyers_attorneys/articles.asp?ArticleID=31&Page=vicar
ious_liability_employer_PA_tort_employee_Pennsylvania.asp>.
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