Should a cab company be held liable when one of its drivers makes sexual advances to a passenger and then assaults her? The Illinois Appellate Court dealt with that issue last month in McNerney v. Allamuradov. The opinion is worth a read, particularly for its analysis of the negligent hiring allegations.

The underlying facts are pretty straightforward. Susan McNerney[“McNerney”] scheduled an early morning taxicab ride from her home in Winnetka to a local airport. She booked a ride from 303 Taxi – a local Chicagoland taxi company – through their website. On the ride to the airport the driver, Muhtar Allamuradov[“Allamuradov”], pulled over in a secluded area in Northbrook. He insisted McNerney join him in the front seat of the cab and she refused. Allamuradov then made repeated sexual advances that McNerney resisted. Ultimately, despite McNerney’s protests, there was some non-consensual physical contact. McNerney was able to surreptiously record portions of the assault using her cellphone. Allamuradov was criminally charged and pled guilty to battery.

While the facts leading to the assault were straightforward, Allamuradov’s employment status was anything but clear. First, there were multiple corporate entities involved – specifically Grand Transportation and 303. Grand Transportation and 303 had a Dispatch Service Agreement. Pursuant to the Dispatch Agreement, 303 provided various dispatch services to Grand and Grand was permitted to use 303 logos, colors and other identifying marks on their cabs.

Grand leased the cab to Allamuradov. The lease provided that Allamuradov had access to dispatch services through 303; credit card technology through 303 and access to 303’s voucher programs. Grand agreed to take care of routine repairs. Grand was also obligated to provide Allamuradov with a license to use “303 Taxi” identification and liability insurance. Grand had the right to terminate the lease if Allamuradov didn’t pay the lease fees or if he racked up a bad driving record.

After the assault, McNerney filed a complaint against 303, Grand and Allamuradov. She included allegations of battery, and negligent hiring against both Grand and 303 as employers of Allamuradov. She also sued Allamuradov individually and as an agent of Grand and 303. Both 303 and Grand moved to have the case tossed arguing that Allamuradov’s conduct was “outside the scope of employment.” The employers’ argument boils down to: “we didn’t hire him to assault passengers – we hired him to drive, so we aren’t responsible” – historically a pretty effective argument.

Additionally, both 303 and Grand asserted there was no evidence of negligent hiring. In fact, both 303 and Grand asserted that they did not hire Allamuradov.

303, in support of its motion offered the testimony of Baqthiar Khan their “driver coordinator.” Khan insisted that all drivers are “independent contractors” and 303 doesn’t dictate their schedule or require any documentation. 303 does not require references, or employment history. In terms of driver training, it was pretty skeletal – drivers were shown how to work the meter and basically told to be nice.

Grand offered the testimony of Sergey Rappaport, a manger for Grand and “driver coordinator” for 303. Rapport admitted that he did not request any references and made no effort to contact previous employers. Apart from flashing a drivers license, Allamuradov didn’t have to provide any other form of ID. No background check was done. Grand didn’t issue a 1099 to Allamuradov; didn’t schedule his hours or require him to report fares. When Grand learned of the assault, it terminated the lease. [As an aside, shortly before the Court ruled on the motions, 303 threw Grand under the bus and asserted that Allamuradov was an agent of Grand].

The trial court granted the motions and tossed the case. McNerney appealed.

The Appellate Court acknowledged that just because the defendants insisted they didn’t hire Allamuradov, that doesn’t end the inquiry, as Illinois Courts do recognize causes of actions against principals when they negligently hire independent contractors. The opinion went on to note that although the defendants claimed there was no red flags in the background checks performed, those same background checks were not sufficient, particularly in light of the fact that taxicabs, as common carriers, have to use the highest degree of care. The decision to throw out the negligent hiring claim was tossed.

Additionally, the Appellate Court rejected the assertion that neither Grand nor 303 owed any duty to supervise Allamuradov because they didn’t “employ” him. The Appellate Court seemed reluctant to embrace a corporate structure between two entities that absolved both of them from any responsibility to supervise their drivers. The Appellate Court went on to reverse the trial court’s decision that no agency relationship existed between Allamuradov and 303 and Grand.

Lastly, the Appellate Court reiterated that taxis are common carriers and, as a result, may be liable for intentional acts outside the scope of employment.

The decision of the lower court was reversed in its entirety.