Legal Question in Business Law in California

Re: Liability Issues

With some exceptions, both you and your "employer" are liable for anything you did during the course and scope your employment. You could be sued if you did anything giving rise to a claim. You would not generally be responsible for something that your employer did that did not involved you.

Re: Liability Issues

Well, I guess the first thing that needs to be said is that naming someone in a lawsuit and getting a judgment against them are two entirely different propositions.

It's very easy to add names to the list of defendants when preparing and filing a lawsuit. Lawyers are trained to identify and name anyone who might possibly be liable as a co-defendant. The main limitation on this is that if the naming is completely groundless so that the defendant can get dismissed, the plaintiff may be liable for the erstwhile defendant's costs. Also, there is a possibility of suit for malicious prosecution. Nevertheless, as a general matter, diligent representation requires adding all possibly-liable parties as co-defendants.

So, there is always some possibility that you might be named as a defendant, and have to defend.

Probably the bigger issue is whether a suit against you would be successful. This should be considered from the standpoint of what might bring about liability, and of what type. Among the possibilities are contract, agency, partnership, tort and criminal liability.

It's unlikely you would be liable for the contracts of the business unless you sign them, guarantee them, or, in the case of an oral contract like a purchase order given over the phone, express them.

You could be liable to third parties to whom you appeared to be the agent or partner of the proprietor. Without knowing the kind of business or your role, it's hard to estimate the potential for this, but you should be aware that if an outsider has good reason to think you're an agent or a partner, you may be treated as one even if you weren't. It's called "ostensible authority," I think.

Tort liability covers things like assault, trespass, negligence, etc. -- civil wrongs that aren't based on contracts. Ordinarily, you'd be pretty safe here; any liability would depend upon your own intentional or negligent bad act or omission. If you punch a customer, you'll be liable, and so might the owner, but if the owner punches a customer, you wouldn't ordinarily be liable.

As to criminal liability, if the business is engaged in illegal activity, you can be prosecuted for your own role or for conspiracy or a related theory of liability (e.g. aiding and abetting). The illegal activity could be something as obvious as running a meth lab, or as relatively innocent as accidentally selling cigarettes to a minor.

There are a few scattered laws that extend special immunities to volunteers. One that comes to mind is that uncompensated directors of non-profit corporations have statutory limitations on their personal liability. I don't think being unpaid makes much of a difference in most cases, except possibly that a jury might be more sympathetic.

If you are concerned about something in particular, you should consult a lawyer and describe the specific worrisome aspects.