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Home > Journals > Michigan Law Review > MLR > Volume 38 > Issue 7 (1940)

 

Abstract

Under the press of modern concepts of responsibility of business units it becomes necessary to re-examine the relation between the corner filling station and the big oil company that uses it as a means of getting its products before the consuming public. The factual situation is usually this: the operator may own the station, or may lease it from the oil company; the oil company invariably owns the equipment, such as gas pumps, tanks, and tank trucks, which it leases to the operator; by a sales contract the operator binds himself to sell only the petroleum products of the oil company, with or without permission to sell accessory lines such as automobile tires and tubes; strict retail price control is reserved by the oil company, which sells products to the operator at a stated differential below the retail price; the oil company furnishes all advertising and decorates the station in its own distinctive colors; the oil company reserves the right to terminate the relationship at any time. Recent legislation, such as that providing for workmen's compensation, old age insurance, unemployment insurance, and chain store taxation, as well as the common-law rule of respondent superior, require a determination whether this operator in his relation to the oil company is deemed to be an independent contractor. Vicarious liability for tort hangs on the employment relation (which is replacing the "master and servant" terminology in the books); the workmen's compensation statutes carry their own definition of coverage, yet the common-law concepts of the employment relation remain the essential basis for the statutory liability; the unemployment and old age insurance coverage is treated in the same manner, depending upon the legal relationship of employer and employee. The chain store taxes are generally levied on "stores owned, operated, maintained, or controlled" by one legal entity, a phraseology which involves a relationship that at common law would be defined in terms of "employer and employee." With this in mind, is our filling station operator an independent contractor leading the "good life," or is he the final outpost of big business? Before answering this question, let us examine, first, the common-law rationales of the employment relation and, second, the socio-economic rationale.

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