Wells Fargo & Co. v. Taylor

Background

A Wells Fargo & Company messenger working on a passenger train was injured when an express car derailed. He sued the railroad in a Mississippi court and won a $4,000 judgment. Contracts between the express company and the railroad and a separate messenger’s employment agreement said the messenger would assume risk and not hold either company liable.

Reasoning

The express company then sued in federal court, saying the messenger had violated his contract and obtained the state judgment unfairly. The Court examined whether federal equity could block enforcement of that state judgment and whether the Employers’ Liability Act made the messenger’s waiver void. The Court held the suit was a proper equitable action, that the express company was not a “common carrier by railroad” under the Act, and therefore the waiver in the messenger’s agreement was valid. The Court concluded the messenger was employed solely by the express company and that equity entitled the express company to enforce the contract and stop collection of the state judgment.

Real world impact

The decision lets a company enforce a worker’s written agreement to assume job risks and stops a financially irresponsible worker from using a state-court judgment to make the company pay when the company was not party to that suit. It also confirms that federal courts may enjoin enforcement of state judgments in cases where equity shows the judgment is inequitable or obtained in violation of controlling contracts, and that the Employers’ Liability Act does not reach express companies that do not operate railroads.