Energy Choice
                            

Matters

NY ESCO Says Its Not Responsible For Actions Of Independent Contractor

October 19, 2016

Email This Story
Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

In a further response to a New York show cause order, Marathon Power LLC d/b/a Marathon Energy Corporation said, that "Marathon is not responsible for the actions of its independent contractor, Atlantis [Atlantis Business Consulting, LLC]."

Click here for background on the show cause order, which mainly stems from the practice of Atlantis Business Consulting, LLC using in-person meetings to pitch business customers on an LED lighting service that includes switching to an ESCO for energy supply (one of the ESCOs to which customers were switched being Marathon). PSC Staff has alleged that the in-person meetings had been represented as for the purpose of discussing only LED lighting not ESCO service, and therefore do not qualify for an exemption from ESCO door-to-door sale requirements which is typically afforded to pre-arranged appointments

Marathon claimed that Atlantis's pre-scheduled sales appointments were explicitly exempted from the Uniform Business Practices' definition of door-to-door sales, claiming that customers were informed such sales appointments would include a discussion concerning a "fixed term" agreement for their "rate," not just LED lighting.

Moreover, "even if any of the ABC Lighting Program complaints involves a violation of the UBP, Marathon is not responsible for the actions of its independent contractor, Atlantis," Marathon said

Marathon noted that the show cause order states that, for those complaints concerning the ABC Lighting Program, "Atlantis was acting as an agent of Marathon Energy, LLC. Therefore, Marathon is responsible, and will be held accountable, for all of Atlantis’ actions taken in violation of the UBP.”

"Even if Atlantis violated the UBP in connection with the ABC Lighting Program, which Marathon explains above did not occur, Marathon is not responsible for the actions of its independent contractor, Atlantis," Marathon said

"As an initial matter, there is no provision in the UBP that permits the Commission to hold an ESCO accountable for the actions of an agent, let alone an independent contractor. Turning to New York common law, for a valid agency relationship to exist, one party must 'retain[] a degree of direction and control over another.' Where the actions of an independent contractor give rise to legal claims for liability, an agency relationship will not be found unless the other contracting party maintains a degree of ownership over the independent contractor’s business and operations," Marathon said

"Here, the Independent Contractor Agreement between Marathon and Atlantis plainly states that Atlantis is 'not an employee or partner of Marathon' and that Atlantis 'will work independently at its own schedule, under its own supervision.' Further, Marathon had no role in the development of the ABC Lighting Program. More specifically, Marathon did not draft marketing language or review marketing materials. Nor did Marathon discuss strategy with Atlantis in targeting specific classes of customers to market the ABC Lighting Program. Moreover, Marathon was not consulted in the development of ABC’s Lease Agreement, and neither Marathon’s nor ABC’s respective agreements reference the other. For all these reasons, Marathon cannot be held liable for the actions of ABC under a common-law legal agency theory," Marathon said

As previously reported, Marathon is voluntarily and proactively suspending enrollment of any new customers associated with the ABC Lighting Program until the Commission orders otherwise.

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Vice President Sales & Marketing -- Retail Supplier -- Houston
• NEW! -- Executive Director -- Retail Supplier
• NEW! -- Director of Billing Operations
• NEW! -- Director/Manager Channel Sales -- Retail Supplier -- Houston
• NEW! -- Analyst, Supply & Settlements -- Retail Supplier -- Houston
• NEW! -- Manager of Supply -- Retail Provider -- Dallas
• NEW! -- Pricing Analyst -- Retail Supplier
• NEW! -- Channel Partner Manager, Northeast -- Retail Provider