Be Careful Who You Hire: Unlicensed Contractors are Employees of the Hirer

In Randall Blackwell v. Ray Vasilas, (D067239, Superior Court No. 37-2013-00064563-CU-PO-CTL) the Fourth Appellate District held the Privette Doctrine does not protect a hirer from liability to an independent contractor’s employee, where the alleged tortfeasor was unlicensed to perform construction work which required a license with the Contractor’s State License Board. In other words, an unlicensed contractor is an employee of the hirer, and the hirer is liable for the conduct of the unlicensed contractor, whether or not the hirer knew or should have known the contractor was unlicensed.

In Blackwell, Plaintiff was injured when scaffolding erected by another contractor collapsed at a residential construction site owned by Vasilas. Vasilas hired Plaintiff Blackwell to replace gutters and hired another contractor, Gomez, to repair stucco. Prior to Blackwell performing work on the gutters, Gomez erected and used scaffolding at the property to perform the stucco work. Subsequently, Blackwell leaned his extension ladder on the top rail of the scaffolding to reach the roof and fell to the ground when the scaffolding collapsed. Blackwell filed suit against Vasilas and Gomez for negligence. Gomez did not appear or participate in the lawsuit.

Vasilas filed a motion for summary judgment on the grounds he had no duty to Blackwell and argued pursuant to the Privette Doctrine, he is not liable to Blackwell for the conduct of his independent contractor, Gomez. The trial court agreed, and found Gomez was not an employee of Vasilas. The Court of Appeal disagreed and reversed the grant of summary judgment on the grounds Vasilas did not affirmatively prove Gomez was an independent contractor and not an employee.

To determine Gomez’s employment status, the Court relied exclusively on the express statutory requirements found in Labor Code §2750.5 which provides,“[t]here is a rebuttable presumption…that a worker performing services for which a license is required…is an employee rather than an independent contractor.” Thereafter, §2750.5 (a) – (c) lists certain considerations to rebut the employee status and determine an individual is an independent contractor including: right to control, discretion regarding manner of performance or means to accomplish the work, substantial investment in the business, holding out business for oneself, bargaining for a contract, control over the time and place of work, supply of tools and instrumentalities, performing work that requires a particular skill, holding a license and the intent of the parties. However §2750 further provides, “…any person performing any function or activity for which a license is required pursuant to [the Contractor’s State License Law] shall hold a valid contractors’ license as a condition of having independent contractor status.” The Court emphasized, “[m]ore than 30 years ago, we ruled that this language “absolutely denies independent contractor status to a person required to have such a license who is not licensed.”

The Blackwell ruling is not novel, but acts as a firm reminder to homeowners, businesses and the entire construction industry of the importance to comply with the CSLB’s licensing requirements. Although unlicensed contractors are not entitled to receive compensation for their unlicensed services, hiring an unlicensed contractor could unknowingly and inadvertently expose an owner or general contractor to significant liability for worksite injuries to employees of other independent contractors on the project.