TCPA Vicarious Liability: How to Protect Your Lead Generation Business
If your business purchases leads or uses third-party vendors to make marketing calls, you need to understand how vicarious liability can affect lead generators under the Telephone Consumer Protection Act (TCPA). A recent decision from the Northern District of Ohio (Dickson v. Direct Energy, LP (Dec. 16, 2025)) offers a roadmap for how companies can structure their vendor relationships to avoid being held responsible for calls they didn't make.
The case also provides a useful contrast with another recent decision, (Klassen v. SolidQuote LLC (D. Colo. Nov. 19, 2025), where the defendant lost on the issue of vicarious liability despite being four entities removed from the actual caller. Understanding why these cases went different ways can help you protect your business.
What Is Vicarious Liability Under the TCPA?
Vicarious liability is the legal principle that holds one party responsible for the actions of another. In the TCPA context, this means a company can face liability for illegal calls or text messages made by its vendors, contractors, or lead generators—even when the company never touched a phone.
The Federal Communications Commission and federal courts have made clear that sellers can be held vicariously liable for TCPA violations committed by third-party telemarketers under federal common law agency principles. "Agency is a 'fiduciary relationship that arises when one person (a 'principal') manifests assent to another person (a 'agent') that the agent shall act on the principal's behalf and subject to the principal's control, and the agent manifests assent or otherwise consents so to act." Therefore, "whether an agency relationship exists is based on an assessment of the facts of the relationship and not on how the parties define their relationship."
As one court noted, any other interpretation would "allow companies to evade TCPA liability simply by creative contracting." The question becomes: what actually constitutes an agency relationship, and how can companies legitimately avoid creating one?
Dickson v. Direct Energy: Avoiding TCPA Agency Liability
Matthew Dickson received multiple ringless voicemails advertising Direct Energy's services in 2017. One message explicitly stated it was from "Nancy Brown with Direct Energy."
The problem? Direct Energy didn't send those voicemails—Total Marketing Concepts (TMC) or one of its vendors did.
Dickson sued Direct Energy under a vicarious liability theory, arguing that TMC was Direct Energy's agent. The magistrate judge initially agreed that a jury question existed on the agency issue. But the district court disagreed and stated that "Direct Energey undoubtedly had a close relationship with TMC, it did not have the requisite control over TMC to form an agency relationship." As such, the court granted summary judgment to Direct Energy.
Why Direct Energy Won
The court found no agency relationship existed as a matter of law, pointing to several key factors:
Clear contractual disclaimer. The contract between Direct Energy and TMC explicitly stated that "neither party is, nor will either party hold itself out to be, vested with any authority to bind the other party contractually, or to act on behalf of the other party as a broker, agent, or otherwise." The agreement created an independent contractor relationship, not an agency.
No operational control. Direct Energy played no role in hiring, training, supervising, or disciplining TMC's employees. This is critical under the Restatement (Third) of Agency, which focuses on the principal's ability to give interim instructions as the hallmark of an agency relationship.
No authority to bind. Despite the magistrate's initial finding, the court determined that TMC could not bind Direct Energy to contracts. TMC could complete initial sales steps, but no contract formed until Direct Energy sent Terms and Conditions and received no rejection from the customer.
Commission structure. TMC received commission only on "good sales"—those that Direct Energy ultimately accepted—rather than hourly wages or per-call compensation. This reinforced the independent contractor relationship.
The court relied heavily on a similar case, (Johnson v. Charter Communications (N.D. Ala. Sept. 2025)), which analyzed substantially similar facts and reached the same conclusion.
TCPA Liability for Ratification: The Klassen Warning
While Direct Energy prevailed, Klassen v. SolidQuote shows the limits of contractual separation. SolidQuote was four entities removed from the lead generator who was making the calls (HnM) in the lead chain and had no direct relationship with either HnM or the intermediary that hired them. Yet the court still found apparent authority through ratification.
What happened? When the plaintiff told SolidQuote's sales agent that she had received (rather than initiated) the call, the agent proceeded to sell her insurance anyway. The court held this constituted ratification of HnM's actions. The court found that "a reasonable person would understand this interaction [the selling of insurance] as indicating that HnM was acting on behalf of SolidQuote when it called [Klassen], and SolidQuote approved of HnM's call. Therefore, SolidQuote exercised apparent authority over HnM by ratifying HnM's actions on its behalf".
Why the Different Outcomes?
The key distinction is opportunity and response. Direct Energy never had an opportunity to ratify because it wasn't present on the ringless voicemail calls—those messages were deposited automatically without any real-time human interaction. (Side note: ringless voicemails are bound to same consent requirement as AI-generated voice calls and require prior express written consent if being used for marketing purposes.) SolidQuote's agent, by contrast, made a real-time decision to continue a sales pitch after being told the call was outbound.
This distinction matters for several reasons:
Nature of communication: RVMs are automated and deposited without recipient interaction. Live calls involve human agents who can assess and respond to information—including red flags about compliance.
Timing of knowledge: SolidQuote's agent learned during the call that the consumer had received rather than placed the call. This real-time knowledge, combined with the decision to proceed anyway, created the ratification.
Layers of separation don't matter: The court didn't care about the intermediary chain once SolidQuote's agent made the real-time decision to continue selling.
How to Avoid Vicarious Liability under TCPA
These cases together establish that TCPA vicarious liability analysis involves two distinct inquiries: whether the structural relationship creates agency, and whether real-time conduct constitutes ratification. Here's how to protect against both.
Structural Protections: Avoiding Agency
Include clear agency disclaimers in your contracts. State explicitly that the vendor is an independent contractor, not an agent, and that neither party has authority to bind the other. The court stated that Direct Energy "took great pains to disclaim any agency relationship with clear and concise language in the parties' contract."
Structure the relationship so vendors cannot bind you contractually. Require that any sale completed by a vendor isn't final until you review and accept it. Send your own terms and conditions to consumers separately.
Maintain operational independence. Avoid controlling the vendor's hiring, training, supervision, or discipline of employees. You can set performance standards and require compliance certifications, such as reporting consumers who want to be placed on a DNC list, but don't manage their day-to-day operations.
Operational Protections: Preventing Ratification
Implement call screening protocols. Before proceeding with any warm transfer, verify that the call was consumer-initiated. Build this into your scripts and quality monitoring. Train agents to terminate these calls immediately to avoid any potential ratification issues.
Document your compliance training. Maintain records showing that you've trained agents on these protocols. This demonstrates good faith efforts to avoid non-compliant calls.
Create escalation procedures. When agents encounter potential compliance issues, they should know how to escalate rather than improvise.
Contractual Protections: Belt and Suspenders
Require TCPA compliance certifications from all lead sources and call vendors. Include specific representations about consent collection and calling practices.
Include indemnification provisions. While indemnification won't prevent you from being sued, it can help you recover damages from the vendor who caused the problem.
Reserve audit rights. Having the right to audit your vendors' compliance practices doesn't create an agency relationship—the Direct Energy court noted this specifically.
Vet your call sources carefully. Even with contractual TCPA compliance requirements, your buyers may have claims against you if their ratification creates liability.
Key Takeaways
Agency disclaimers work—but only if the substance matches the form. Direct Energy's contract said no agency, and its actual practices confirmed it. If your contract says "independent contractor" but you're controlling the vendor's operations, courts will look past the label.
Distance from the caller doesn't protect you from ratification. SolidQuote was four entities removed from the caller but still faced liability because of what its agent did when confronted with a compliance issue.
Real-time conduct matters more than contractual structure. You can have perfect contracts and still create liability if your people make bad decisions in the moment.
Training is your last line of defense. Agents who know to terminate questionable calls prevent ratification. Agents who proceed anyway create it.
The safest approach combines structural and operational protections. Good contracts that avoid agency plus good training that prevents ratification.
The Bottom Line
TCPA vicarious liability isn't a trap for careful businesses—it's a doctrine that holds companies accountable for the calls made in their name. The Dickson and Klassen cases show that you can legitimately avoid liability by structuring relationships correctly and training your people to respond appropriately when compliance issues arise.
The key insight is that these are two separate inquiries. A defendant may prevail on the structural agency question yet still face liability on ratification if its agents accept and proceed with calls they know or should know are non-compliant. Protect yourself on both fronts.
