                   IN THE COURT OF APPEALS OF TENNESSEE
                              AT KNOXVILLE
                                   December 15, 2010 Session

            ADMIRAL WEBSTER v. PSYCHEMEDICS CORPORATION1

                     Appeal from the Circuit Court for Monroe County
                      No. V-06304P      Lawrence H. Puckett, Judge




                    No. 2010-01087-COA-R3-CV-FILED-JUNE 24, 2011


The plaintiff’s employment was terminated by the employer for violation of the company’s
drug testing policy. The plaintiff alleged negligence against the defendant, a biotechnology
company with independent laboratory facilities providing hair testing for the detection of
drugs and providing drug-testing services to the plaintiff’s former employer. The trial court
granted the defendant’s motion for summary judgment. The plaintiff appeals. We reverse.

            Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
                                Reversed; Case Remanded

J OHN W. M CC LARTY, J., delivered the opinion of the Court, in which C HARLES D. S USANO,
J R. and D. M ICHAEL S WINEY, JJ., joined.

Brian E. Nichols, Loudon, Tennessee, and J. Timothy Bobo and Ryan C. Edens, Clinton,
Tennessee, for the appellant, Admiral Webster.

Charles H. Hollis, New Orleans, Louisiana, and Elmer E. White, III, Birmingham, Alabama,
for the appellee, Psychemedics Corporation

                                              OPINION

                                        I. BACKGROUND


        1
          Mr. Webster initially sued his former employer, Koyo Corporation of U.S.A. (“Koyo”), in addition
to Psychemedics Corporation. The court was informed that Koyo was not a real party in interest and that
JTEKT Automotive Tennessee - Vonore (“JTEKT”) should be substituted for Koyo. On November 13,
2007, all claims against JTEKT were dismissed with prejudice. Because most of the documents in the record
refer to Koyo, for consistency purposes we will use that name for the employer in this opinion.
       The plaintiff, Admiral Webster, was hired as a production technician by TRW Koyo
Steering Systems Company in January of 2001. At the time of his hire, Mr. Webster was
advised of the substance abuse policy during a training session and signed a document
acknowledging the random drug testing program. Prior to March 2004, it appears that
TRW’s interest in the company was bought out by Koyo Corporation of U.S.A. (“Koyo”).
Koyo revised the substance abuse policy and required Mr. Webster to sign an
Acknowledgment and Consent Form whereby he agreed

       to hold Tennessee Koyo and its agents harmless from any liability arising in
       whole or in part from any act of negligence by any of them in connection with
       collection of specimens, testing, and use of the results of said testing in
       connection with [his] employment . . . .

Mr. Webster signed the form on March 4, 2004.

        On August 3, 2005, Mr. Webster was informed by his supervisor and Koyo’s company
nurse that he had been randomly selected to submit for drug testing. Mr. Webster went to
the nurse’s station located on Koyo’s premises and provided a sample of hair from his
underarm for testing. While at the nurse’s station, Mr. Webster completed and signed
Koyo’s Substance Abuse Testing Voluntary Notification form, but he mistakenly dated the
form August 3, 2004 as opposed to August 3, 2005. After providing a photo ID for proof of
identification, Mr. Webster signed the custody and control form certifying that he voluntarily
provided the sample and acknowledging that the collection procedures were followed. Pam
Nichols, Koyo’s nurse, also signed the custody and control form; she mistakenly dated the
form August 1, 2005, as opposed to August 3, 2005.

        The defendant, Psychemedics Corporation (“Psychemedics”), is a biotechnology
company with independent laboratory facilities providing patented hair testing for the
detection of drugs. Psychemedics’ testing services are used by a number of employers in
their drug testing programs. In a release, Mr. Webster agreed as follows:

       I consent to the testing of the sample by Psychemedics Corporation and to the
       release of the results to the named test result recipient. I hereby release
       Psychemedics Corporation, its officers, employees, agents and representatives
       from any and all liabilities arising from the reporting of my results to the
       authorized recipient and the recipient’s use thereof.

       After Mr. Webster’s hair sample was collected by Ms. Nichols, it was placed in a
piece of aluminum foil; the foil with the hair sample was placed in a sample acquisition card
and sealed. Mr. Webster initialed the card after it was sealed. The card was then placed in

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a plastic bag that was sealed with tamper-evident tape. Mr. Webster placed his initials on the
tape and dated it August 3, 2005.

        The test result on the hair sample was positive for the presence of cocaine. Mr.
Webster was informed on August 8, 2005, and was escorted from Koyo’s facility. The very
day he was terminated, Mr. Webster went to his family physician, Peter Stimpson, M.D., and
provided a urine sample. A test was conducted on the urine sample by Medtox Laboratories,
Inc. of St. Paul, Minnesota. The urine test result dated August 15, 2005, was negative. On
August 16, 2005, Mr. Webster provided a hair sample for testing at the Tennessee Drug &
Alcohol Consortium in Alcoa, Tennessee. Quest Diagnostics of Atlanta, Georgia, conducted
the test and its August 17, 2005 report indicated the test results were negative.

       Alleging that he was the victim of a “false positive,” Mr. Webster sued his employer
and Psychemedics for negligence, defamation, and breach of contract. The negligence claim
against Psychemedics is the subject of this appeal.

        Psychemedics moved for summary judgment on the basis that Mr. Webster lacks
sufficient probative evidence to substantiate the essential elements of his claims. The trial
court granted Psychemedics’ motion for summary judgment upon finding that while
Psychemedics owed a duty of care to Koyo’s employee, Mr. Webster had waived his claim
by agreeing to the exculpatory clauses. Mr. Webster filed this timely appeal.


                                        II. ISSUES

       The issues presented by Mr. Webster are as follows:

       1. Was the trial court correct in its determination that Psychemedics owed a
       duty of care to Mr. Webster?

       2. Did the trial court correctly grant summary judgment to Psychemedics on
       the basis that the exculpatory clauses do not violate public policy and are
       enforceable as to Psychemedics?

An additional issue presented by Psychemedics is the following:

       3. As a matter of law, did Mr. Webster offer sufficient evidence to establish
       negligence on the part of Psychemedics?




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                              III. STANDARD OF REVIEW

       Tenn. R. Civ. P. 56.04 provides that summary judgment is appropriate where: (1) there
is no genuine issue with regard to the material facts relevant to the claim or defense
contained in the motion, see Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993); and (2) the
moving party is entitled to judgment as a matter of law on the undisputed facts. See
Anderson v. Standard Register Co., 857 S.W.2d 555, 559 (Tenn. 1993).

        In Hannan v. Alltel Publ’g Co., 270 S.W.3d 1 (Tenn. 2008), the Tennessee Supreme
Court clarified the moving party’s burden of proof in a summary judgment motion. A
moving party who seeks to shift the burden of production to the non-moving party who bears
the burden of proof at trial must either: (1) affirmatively negate an essential element of the
non-moving party’s claim; or (2) show that the non-moving party cannot prove an essential
element of the claim at trial. Id. at 5. According to the Court, when a party seeking summary
judgment has made a properly supported motion, the burden shifts to the non-moving party
to set forth specific facts establishing the existence of disputed, material facts which must be
resolved by the trier of fact. Id.; see Byrd, 847 S.W.2d at 215; Robinson v. Omer, 952
S.W.2d 423, 426 (Tenn. 1997). The non-moving party may not simply rest upon the
pleadings, but must offer proof by affidavits or other discovery materials (depositions,
answers to interrogatories, and admissions on file) to show that there is a genuine issue for
trial. If the non-moving party does not so respond, then summary judgment, if appropriate,
shall be entered against the non-moving party. Tenn. R. Civ. P. 56.06.

        There is no presumption of correctness for summary judgments on appeal. See City
of Tullahoma v. Bedford County, 938 S.W.2d 408, 412 (Tenn. 1997). This court must view
all of the evidence in the light most favorable to the non-movant and resolve all factual
inferences in the non-movant’s favor. Luther v. Compton, 5 S.W.3d 635,639 (Tenn. 1999);
Muhlheim v. Knox County Bd. of Educ., 2 S.W.3d 927, 929 (Tenn. 1999). When the
undisputed facts, however, support only one conclusion, then the moving party is entitled to
judgment as a matter of law and a summary judgment will be upheld. See White v.
Lawrence, 975 S.W.2d 525, 529 (Tenn. 1998); McCall v. Wilder, 913 S.W.2d 150, 153
(Tenn. 1995).


                                     IV. DISCUSSION

                   A. Drug Testing, Duty of Care, and Public Policy

      The doctrine of employment at-will is a longstanding rule in Tennessee which
recognizes the right of either the employer or the employee to terminate the employment

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relationship at any time for good cause, bad cause, or no cause at all, without being guilty of
a legal wrong. Stein v. Davidson Hotel Co., 945 S.W.2d 714, 717 (Tenn. 1997); Clanton v.
Cain-Sloan Co., 677 S.W.2d 441, 443 (Tenn. 1984). Tennessee courts have continued to
uphold the viability of the rule, recognizing the need for employers to retain a great deal of
discretion in employing and discharging employees. See Harney v. Meadowbrook Nursing
Center, 784 S.W.2d 921, 923 (Tenn. 1990); Chism v. Mid-South Milling Co., 762 S.W.2d
552, 556 (Tenn. 1988).

       By statute and case law, however, some restrictions have been imposed upon the right
of an employer to terminate an at-will employee. Stein, 945 S.W.2d at 717. The reasons for
such restrictions have been based on well-defined public policy. For example, in Tennessee
any right to terminate an employee for service on a jury has been eliminated. Chism, 762
S.W.2d at 555-56 (see Tenn. Code Ann. § 22-4-108(f)). There are restrictions upon
employment or termination for discriminatory reasons involving race, creed, color, sex, age,
religion, national origin, or handicap. Chism, 762 S.W.2d at 555-56 (see Tenn. Code Ann.
§§ 4-21-401(a), 8-50-103). In order to state a claim for such relief, it must be shown that a
clear violation of some well-defined and established public policy has occurred. Examples
cited by the Chism Court included dismissals for refusal to commit perjury, insistence on
obeying a lawful subpoena, insistence on giving truthful testimony, honoring a subpoena to
jury duty, and failing to seek release from jury duty. Chism, 762 S.W.2d at 556. Other
examples given were the refusal to falsify records or to acquiesce in illegal conduct. Id.

        This court in Stein v. Davidson Hotel Co., No. 01-A-01-9509-CV-00407, 1996 WL
230196 (Tenn. Ct. App. 1996), a wrongful discharge case, stated that “Davidson’s policy of
terminating employees who test positive for drugs does not violate any public policy known
to this court. To the contrary, Tennessee’s public policy is in total opposition to drug use in
the workplace.” 1996 WL 230196, at *6. The Tennessee Supreme Court affirmed our
decision in Stein and commented that there is “no well-defined public policy which is
violated by a private employer discharging an at-will employee who tests positive for drug
use on a random drug test.” Stein v. Davidson Hotel Co., 945 S.W.2d 714, ____ (Tenn.
1997).

      In Hackney v. DRD Management, Inc., No. E1999-02107-COA-R3-CV, 2000 Tenn.
App. LEXIS 205 (Tenn. Ct. App. E.S. March 31, 2000), this court held as follows:

       Tennessee case law has described the employment-at-will doctrine as allowing
       the employer or the employee to terminate the employment relationship at any
       time for any reason. . . .

                                            ***

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       . . . We conclude that the public policy evidenced by the Drug-Free Workplace
       Programs Act is dismissal of employees for drug use. We are not inclined to
       extend public policy to include a requirement that all private employers who
       perform drug testing on at-will employees comply with chain of custody
       procedures.

       . . . In Tennessee, there is no constitutional, statutory or regulatory provision
       which clearly evidences a public policy in favor of accuracy in drug testing for
       private employers.

Hackney, 2000 Tenn. App. LEXIS 205, at *16-19 (citations omitted).

        Accordingly, the law in this state is clear that an employee can be terminated on the
basis of testing positive on a drug screen negligently performed by the testing facility. See
Stein, 945 S.W.2d at 719. This court is aware of no common law duty imposed on employers
with respect to substance abuse testing performed by third party laboratories.

      Significantly, the appeal before us does not involve an employer. Rather, it concerns
a negligence action against a laboratory. In this matter, we must decide whether
Psychemedics, the company hired by Koyo to perform random drug tests, owed a duty of
reasonable care to Mr. Webster, Koyo’s employee.

        To sustain a negligence claim under Tennessee law, a plaintiff must show that the
defendant owed a duty to the plaintiff; a breach of that duty; an injury or loss; causation in
fact; and proximate, or legal, cause. Coln v. City of Savannah, 966 S.W.2d 34, 39 (Tenn.
1998); Miller v. Niblack, M.D., 942 S.W.2d 533, 542 (Tenn. Ct. App. 1996). Thus, in order
to succeed on a claim of negligence, Mr. Webster is required to prove: (1) a duty of care
owed to him by Psychemedics; (2) conduct on the part of Psychemedics falling below the
applicable standard of care that amounts to a breach of that duty; (3) and injury or loss; (4)
causation in fact; and (5) proximate, or legal, cause. McClung v. Delta Square Ltd., Inc., 937
S.W.2d 891, 894 (Tenn. 1996).

        The question of whether a duty exists is one of law and “requires consideration of
whether ‘such a relation exists between the parties that the community will impose a legal
obligation upon one for the benefit of others – or, more simply, whether the interest of the
plaintiff which has suffered the invasion was entitled to legal protection at the hands of the
defendant.’” Coln, 966 S.W.2d 34, 39 (Tenn. 1998)(quoting Prosser and Keeton on Torts
§ 37 at 236 (5th ed. 1984)). See also Duncan v. Afton, Inc., 991 P.2d 739, 742 (Wyo. 1999).
Duty is defined as “the legal obligation owed by defendant to plaintiff to conform to a
reasonable person standard of care for the protection against unreasonable risks of harm,”

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and a duty exists “if defendant’s conduct poses an unreasonable and foreseeable risk of
harm.” McCall v. Wilder, 913 S.W.2d 150, 153 (Tenn. 1995). A risk is unreasonable where
“the foreseeable probability and gravity of harm posed by the defendant’s conduct outweigh
the burden upon defendant to engage in alternative conduct that would have prevented the
harm.” Id. This requires consideration of a number of factors, including “the foreseeable
probability of the harm or injury occurring; the possible magnitude of the potential harm or
injury; the importance or social value of the activity engaged in by defendant; the usefulness
of the conduct of the defendant; the feasibility of alternative, safer conduct and the relative
costs and burdens associated with that conduct; the relative usefulness of the safer conduct;
and the relative safety of alternative conduct.” Id.

      Relying on the at-will employment doctrine, Psychemedics argues that Mr. Webster
can have no negligence claim against it for facilitating conduct for which the at-will
employer cannot be held liable.

       Some courts in other states have refused to impose a duty on the testing entity.
SmithKline Beecham Corp. v. Doe, 903 S.W.2d 347 (Tex. 1995); Willis v. Roche Biomedical
Labs., Inc., 61 F.3d 313, 316 (5th Cir. 1995) (applying Texas law); Frank v. Delta Airlines,
Inc., 2001 WL 910386 (N.D. Tex. 2001) (finding laboratory owed no duty of care to
employee); Herbert v. Placid Ref. Co., 564 So.2d 371, 374 (La. Ct. App. 1990) (holding
laboratory owed employee no duty to properly analyze test sample); Mission Petroleum
Carriers, Inc. v. Solomon, 106 S.W.3d 705 (Tex. 2003) (indicating that Texas law does not
recognize a duty of care owed from a third party testing laboratory to a test subject).

        In other jurisdictions, courts have recognized some duty of care of testing facilities
to employees drug-tested at their employers’ behest. See Stinson v. Physicians Immediate
Care, Ltd., 646 N.E.2d 930, 934 (Ill. Ct. App. 1995) (holding that although the plaintiff could
not recover on the basis of a contractual duty, “[t]here need not be a contract between the
plaintiff and the defendant for the defendant to owe a tort duty); Nehrez v. Dunn, 593 So. 2d
915, 917-18 (La. Ct. App. 1992) (finding laboratory owes employee a duty to perform test
in competent manner); Elliott v. Laboratory Specialists, Inc., 588 So.2d 175, 176 (La. Ct.
App. 1991) (holding that employee who was discharged based on a drug test result could
assert a claim for negligence against the drug testing laboratory that conducted the test,
rejecting the contention of the laboratory that it owed no duty of care to the employee
because its contractual arrangement was with the employer); Santiago v. Greyhound Lines,
Inc., 956 F.Supp. 144, 152-53 (N.D.N.Y. 1997) (holding that it was appropriate to recognize
a duty of care on the part of the drug testing laboratory and would have allowed the plaintiff
to proceed with a negligence claim had there been any evidence of negligence in the testing
process); Duncan v. Afton, Inc., 991 P.2d 739, 745 (Wyo. 1999) (holding company owed a
duty of reasonable care to an employee required to submit to testing; risk of harm to an

                                              -7-
employee of a false positive test is both foreseeable and significant; company derives a
financial benefit from testing and has the ability to hire and train competent personnel;
company was in better position to bear costs of improperly performed test than wronged
employee and imposition of duty of care would create incentive to avoid future harm);
Ishikawa v. Delta Air Lines, 149 F.Supp. 2d 1246 (D. Or. 2001); Ragsdale v. Mount Sinai
Med. Ctr. of Miami, 770 So. 2d 167 (Fla. Dist. Ct. App. 3d Dist. 2000) (holding medical
center that contracted with employer to conduct drug testing of employees owes a duty of
reasonable care to employees, as harm to employees was foreseeable if drug test results were
erroneously reported as positive.); Chapman v. LabOne, 460 F.Supp.2d 989, 1001 (S.D. Iowa
2006) (holding under Iowa law that a drug testing laboratory owes a duty of care to
employees subjected to drug testing, because laboratory could anticipate the harm that could
result to employees as a result of negligent conduct in processing samples); Coleman v. Town
of Hempstead, 30 F.Supp.2d 356 (E.D.N.Y 1999) (finding that drug testing laboratory owed
a duty of care to employee because of the devastating harm that can be caused because of an
inaccurate test result and the fact that employers tend to have undue confidence in the
results); Sharpe v. St. Luke’s Hospital, 821 A.2d 1215 (Pa. 2003) (finding hospital drug
testing lab that contracted with plaintiff’s employer to collect samples had a duty of
reasonable care to the employee; recognized substantial public interest in ensuring that care
is exercised in connection with employment related drug testing; refused to uphold grant of
summary judgment in negligence action, holding that it was up to the jury to determine
whether testing lab had breached duty); Warshaw v. Concentra Health Services, 719 F.Supp.
2d 484 (E.D. Pa. 2010) (holding employee had stated a claim for negligence based on drug
testing service’s failure to meet duty of care; defendant should have foreseen that its
negligence would harm plaintiff’s employment and defendant was in the best position to
ensure the non-negligent processing and reporting of test results and to limit its liability by
acting reasonably; rejected defendant’s argument that employee could not show any
causation between the drug test results and the termination of the plaintiff’s employment
finding that there was a genuine issue of material fact as to whether such a connection
existed); Balistrieri v. Express Drug Screening, LLC, No. 04-C-0989, 2008 WL 906236
(E.D. Wis. 2008) (allowing negligence action against drug testing laboratory); Smith v.
Diamond Offshore Management Co., No. Civ. A. 03-2024, 2003 WL 23095586, *7-8 (E.D.
La. 2003); Quisenberry v. Compass Vision, Inc., 618 F.Supp. 2d 1223 (S.D. Cal. 2007)
(laboratories owe a duty to the individuals whose specimens they test at the request of
others); Berry v. Nat’l Med. Servs., 205 P.3d 745 (Kan. Ct. App. 2009) (finding that Kansas
law recognizes a duty owed from laboratories to test subjects); Palonis v. Jewel Food Stores,
Inc., 383 F.Supp. 2d 1072, 1074 (N.D. Ill. 2005) (concluding that a laboratory owes a duty
of reasonable care to persons whose specimens it tests); Williams v. National Railroad
Passenger Corp., 16 F.Supp. 2d 178, 18-82 (D.Conn. 1998) (allowing employee who was
discharged for failing a drug test to sue the facility for negligence in performing the test).



                                              -8-
       In this action, Mr. Webster alleges that as an expert in the field of drug testing,
Psychemedics owed “a duty of reasonable care” to persons whose specimens it tests for
employers. He alleges that he never used cocaine, and therefore Psychemedics “breached
this duty of reasonable care in being negligent in handling the processing of [his] random
drug screen.” Mr. Webster alleges that he was injured as a result of the breach.

       The trial court in the instant case found that Psychemedics owed a duty of care to Mr.
Webster in undertaking his drug test at the request of the employer Koyo. The court based
its conclusion on Tennessee common law regarding the legal duty owed by one party to
another and its application to drug-testing companies. See Coln v. City of Savannah, 966
S.W.2d 34, 29 (Tenn. 1998); Saulsberry v. Laboratory Corp. of America, No. W2000-02826-
COA-R3-CV, 2001 WL 912824 (Tenn. Ct. App. W.S., Aug. 6, 2001). The trial court also
referenced the other jurisdictions that have established a duty of care in similar
circumstances.

        In Saulsberry, an action by an employee against a laboratory for damages resulting
from his discharge from employment due to the alleged negligence of the laboratory in
performing a random drug test, allowed a negligence action against a laboratory to proceed.
The employee’s specimen tested positive for cocaine and he was discharged from his
employment. The employee sued the laboratory that conducted the test, alleging negligence
in the testing procedure that resulted in a false report. We reversed the trial court’s grant of
summary judgment on the negligence claim, finding that a genuine “dispute of material fact”
needed to be resolved regarding whether there was a lack of reasonable care to provide
correct laboratory results. Saulsberry, 2001 WL 912824, at *5.

        We agree with the conclusion of the trial court that Psychemedics owed a duty of due
care in administering the drug test to Mr. Webster. When an individual is required, as a
condition of employment, to submit a sample for testing, a duty of care is imposed between
the professional testing entity and the employee. As a company contracting with employers
across the country to perform substance abuse testing, Psychemedics is aware that the likely
effect of a false positive result is significant and devastating to an employee; employment
will likely be terminated and future prospects of employment adversely impacted.
Laboratories like Psychemedics are in the best position to guard against injury, as they are
solely responsible for the performance of the testing and the quality control process and are
better able to bear the burden financially than the employee harmed by a false positive report.


                             B. EXCULPATORY CLAUSES

       The trial court found that Mr. Webster waived his negligence claim against

                                              -9-
Psychemedics by agreeing to exculpatory clauses required by Psychemedics and Koyo. The
court determined that the exculpatory clauses signed by Mr. Webster were not void against
public policy and were enforceable as waivers of Psychemedics’s liability, despite the duty
it owed to Mr. Webster in handling, reviewing, and reporting his drug test. The trial court
concluded that there was no public policy consideration against such exculpatory clauses
evident in the public regulation of companies who conduct drug testing on behalf of
Tennessee employers.

       When Mr. Webster submitted his hair sample for testing, he signed the following
release:

       I hereby release Psychemedics Corporation, its officers, employees, agents and
       representatives from all liability arising from the reporting of my results to the
       authorized recipient and the recipient’s use thereof.

        In our view, this language merely releases Psychemedics from liability “arising from
the reporting of [Mr. Webster’s] results,” not from its alleged negligent handling and testing
of the hair sample. (Emphasis added). See Lewis v. Federal Reserve Bank, No. Civ. A. 04-
1452, 2004 WL 2035006, at *2 (E.D. La. Sept. 10, 2004). Thus, this exculpatory clause is
ineffective as to the issue before us.

       The other release provides as follows:

       I agree to hold Tennessee Koyo and its agents harmless from any liability in
       whole or in part from any act of negligence by any of them in connection with
       collection of specimens, testing, and use of the results of said testing in
       connection with my employment . . . .

(Emphasis added). This release only applies to Psychemedics if it is found to be Koyo’s
agent. The surrounding facts and circumstances determine whether one is an agent of
another or an independent contractor. See United States v. Boyd, 363 S.W.2d 193, 200
(Tenn. 1982). As noted in Boyd, “[t]he mere placing of terms such as agent or independent
contractor in the contract does not make them such in law.” Id.

        The principal distinction in the law between one who functions as an agent with that
of one who functions as an independent contractor is based on “the extent of the control
exercised” over the agent or independent contractor “in the performance of his work.” Boyd,
363 S.W.2d at197. The long-settled test in Tennessee for agency is “whether the principal
has a right to control the conduct of the agent with respect to matters entrusted to the agent.”
Sodexho Management, Inc. v. Johnson, 174 S.W.3d 174, 178 (Tenn. 2005).

                                              -10-
        The “right of control is the primary or essential test of an agency relationship without
which no agency exists. The same standard applies when the agency relationship is implied:
the right of the principal to control the agent’s conduct or the actual exercise of such control
is the essential test.” Id. (quoting Nidiffer v. Clinchfield RR. Co., 600 S.W.2d 242, 245
(Tenn. Ct. App. 1980).

        In Boyd, the Tennessee Supreme Court observed that

        [g]enerally the distinction between the relation of principal and agent and
        employer and independent contractor is based on the extent of the control
        exercised over the employee in the performance of his work, he being an
        independent contractor if the will of the employer is represented only by the
        result, but an agent where the employer’s will is represented by the means as
        well as the result.

Boyd, 363 S.W.2d at 197 (quoting Carbide & Carbon Chemicals Corp., 239 S.W.2d at 31
(Tenn. 1951) (quoting 2 C.J.S. Agency § 2)).

       Psychemedics clearly serves in an independent contractor relationship with Koyo. The
record does not support the conclusion that Koyo exercised any degree of control over the
manner in which Psychemedics performed the drug testing. Accordingly, for purposes of
Tennessee tort law, we find that Psychemedics is not an agent covered by the waiver
provision.2


                                                   C.

       Psychemedics claims that the trial court erred in failing to make any determination
regarding (1) whether Psychemedics failed to exercise reasonable care and (2) whether there
was causation between the actions of Psychemedics and the harm of which Mr. Webster
complains. According to Psychemedics, as a matter of law, Mr. Webster offered insufficient
evidence to establish either.

        It appears the trial court concluded the action upon finding that Mr. Webster had
waived his negligence claim. As we have determined the holding by the trial court to be in
error, and because there is uncertainty as to whether material facts are in dispute, we reverse
the order granting summary judgment and remand for further proceedings.


        2
         By finding that the exclusionary clauses do not apply to waive Mr. Webster’s negligence claim, we
do not reach the public policy issue raised by the parties.

                                                  -11-
                                   V. CONCLUSION

      The judgment of the trial court is reversed and the cause is remanded for such further
proceedings as necessary. Costs of the appeal are assessed to the appellee, Psychemedics.




                                                   _________________________________
                                                   JOHN W. McCLARTY, JUDGE




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