Chambers v. RDI Logistics, Inc. , 476 Mass. 95 ( 2016 )

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SJC-12080
TIMOTHY P. CHAMBERS1 & another2 vs. RDI LOGISTICS, INC., &
another;3 DEE & LEE, LLC, & another,4 third-party defendants.
Bristol. October 5, 2016. - December 16, 2016.
Present: Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy,
& Budd, JJ.
Independent Contractor Act. Federal Preemption. Statute,
Federal preemption, Severability. Practice, Civil, Summary
judgment, Standing. Employment, Retaliation. Protective
Order.
Civil action commenced in the Superior Court Department on
September 20, 2013.
An emergency motion for a protective order was considered
by Richard T. Moses, J.; a motion for reconsideration was
considered by him; and the case was heard by him on motions for
summary judgment.
1
Individually and on behalf of all others similarly
situated.
2
Leroy Johnson, individually and on behalf of all others
similarly situated.
3
Richard J. Deslongchamps, Jr.
4
Three T & C Transport, Inc.
2
The Supreme Judicial Court granted an application for
direct appellate review.
Harold L. Lichten (Peter M. Delano with him) for the
plaintiffs.
Michael T. Grant (Andrew J. Fay with him) for the
defendants.
LENK, J. We are called upon in this case chiefly to
consider whether G. L. c. 149, § 148B, the independent
contractor statute, is preempted by the Federal Aviation
Administration Authorization Act of 1994 (FAAAA),
49 U.S.C. § 14501(c). The plaintiffs, who contracted with the
defendants through small corporations that the plaintiffs
apparently formed for this purpose, performed services in
Massachusetts as furniture delivery drivers. They brought this
putative class action against the defendants under the
independent contractor statute, asserting that they had been
misclassified as independent contractors. Following the
addition of other claims and counterclaims, summary judgment
entered for the defendants dismissing the plaintiffs' claims on
the ground that they were preempted by the Federal statute.
We conclude that, while a portion of the independent
contractor statute is preempted by the FAAAA, the remainder is
severable and remains applicable to the plaintiffs'
misclassification claim. Nor is summary judgment dismissing
that claim warranted on the separately asserted basis that the
3
plaintiffs lack standing as individuals to assert claims for
misclassification under the statute. Material issues of
disputed fact preclude the entry of summary judgment on either
basis. We conclude similarly that the dismissal, without
explanation, of the claim of retaliation that Timothy Chambers
individually asserts under G. L. c. 149, § 148A, was improper.
Finally, we review the denial of the plaintiffs' request
for a protective order, brought in the wake of the defendants'
communications with putative class members in which they were
offered payments in exchange for signed releases. While
discerning no abuse of discretion requiring reversal in these
circumstances, we acknowledge the legitimate concerns raised by
such communications and the authority of a judge to enter
appropriate protective orders when necessary.
1. Background. Since this case concerns a grant of
summary judgment, we "summarize the relevant facts in the light
most favorable to the plaintiff[s]." Somers v. Converged
Access, Inc., 454 Mass. 582, 584 (2009). RDI Logistics, Inc.
(RDI), is a furniture delivery company headquartered in South
Easton. Richard Deslongchamps, Jr., is the founder and
president of RDI. The company provides "last mile" delivery
services for large retail furniture companies.5 The plaintiffs
5
"Last mile" delivery services consist of delivery from a
warehouse where furniture is stored to individual customers.
4
delivered furniture for RDI for several years on a full-time
basis, working approximately sixty hours per week over five or
six days. Since RDI only does business with independent
business entities, the plaintiffs incorporated prior to entering
into contracts with RDI.6 The contracts contained both
nonsolicitation and noncompete clauses, which effectively
prevented the plaintiffs from performing any delivery work for
RDI's competitors during their tenure with the company and for
three years thereafter.
RDI's managers informed the plaintiffs that their contracts
would be terminated if they worked for any company other than
RDI. The company also required the plaintiffs to wear uniforms
and to display signs on their trucks bearing either RDI's logo
or the logos of RDI's customers. RDI deducted from the
plaintiffs' pay the costs of uniforms, truck lease payments, and
damage allegedly done to customers' property in the course of
their deliveries. RDI also regulated how the plaintiffs loaded
the furniture on their trucks, which customers they delivered
to, and the specific windows of time in which they were to
deliver their goods to customers. Finally, RDI required that
the plaintiffs follow prescribed routes to reach their customers
6
Johnson and his then partner, Daryl McConaga, formed Dee &
Lee, LLC, in August, 2007. Chambers formed Three T & C
Transport, Inc., in early 2009. RDI filed a third-party
complaint for indemnity against both of these entities.
5
and use global positioning system devices to ensure that the
plaintiffs did not deviate from their assigned routes.
After approximately four years of service, RDI terminated
its contract with Johnson's company in December, 2011, under
disputed circumstances.7 During the summer of 2013, Chambers
informed his fellow drivers at RDI that he suspected that RDI
was misclassifying them as independent contractors rather than
as employees. In August, 2013, RDI informed Chambers that his
contract was subject to a sixty-day review period.8 On the
evening of September 18, 2013, Deslongchamps confronted Chambers
and accused him of attempting to file a lawsuit under the
independent contractor statute. After a brief argument,
Deslongchamps fired Chambers.
Two days later, the plaintiffs filed a class action
complaint against RDI and Deslongchamps, individually, alleging
misclassification. In October, 2013, they filed an amended
complaint, adding a claim for unjust enrichment stemming from
the purported misclassification, as well as an individual claim
on behalf of Chambers alleging retaliation under G. L. c. 149,
7
Although the record is not clear on the circumstances
surrounding this issue, it appears that RDI terminated Johnson
for failing to wear his seat belt while making deliveries.
8
The parties alternatively refer to this notice as a "60-
day termination notice." It is not clear in the record whether
the notice explicitly provided for the termination of Chambers's
contract.
6
§ 148A. The defendants asserted two counterclaims for breach of
contract against Johnson, maintaining that he had violated a
release of claims against RDI that he signed upon his
termination. They also filed a third-party complaint against
the plaintiffs' respective corporations, asserting that the
contracts between those corporations and RDI indemnified RDI
against any damages resulting from the plaintiffs' claims.
In July of 2014, the parties engaged in an unsuccessful
mediation effort. Three months later, as discovery was
underway, RDI sent a series of letters on an ex parte basis to
certain current and former RDI contractors. Each letter
contained a check for $1,000 that would, if endorsed,
purportedly release all claims against RDI. The two-page
letters, in essence, stated that two individuals had filed a
class action complaint against RDI in which they claimed that
they were misclassified as independent contractors. The
letters, which contained the Superior Court case caption, noted
that although "RDI believes firmly that it has not acted
improperly with regard" to its classification of its workers, it
would offer "a one-time payment in exchange for a release" of
any claims relating, inter alia, to the classification of those
workers.
On learning of these letters, the plaintiffs sought an
emergency protective order barring RDI from engaging in further
7
communications with "putative class members." They asked the
judge to strike "any alleged settlements obtained as the result
of the letters and checks" that had been mailed. The motion was
denied. A few months later, the plaintiffs filed a motion for
reconsideration of their emergency motion, claiming that an RDI
driver had informed the plaintiffs' counsel that he and his
fellow drivers feared they would lose their contracts with RDI
if they did not endorse the checks. The judge denied that
motion. The plaintiffs sought interlocutory review before a
single justice of the Appeals Court, which also was denied.
Two weeks later, the plaintiffs moved for partial summary
judgment on their misclassification claim. In response, the
defendants filed a cross motion for summary judgment on all of
the plaintiffs' claims, along with their claims against Johnson
and the plaintiffs' companies. The judge denied the plaintiffs'
motion and allowed the defendants' motion on the ground that the
FAAAA preempted the independent contractor statute in its
entirety.9 The plaintiffs' complaint was dismissed, along with
the defendant's claims against Johnson and the plaintiffs'
9
The parties do not reference the plaintiffs' unjust
enrichment claim, and the judge did not provide a reason for its
dismissal. We assume that the claim was dismissed concurrently
with the misclassification claim. Accordingly, we reverse the
dismissal of that claim.
8
companies.10 We allowed the plaintiffs' application for direct
appellate review.
2. Discussion. a. Summary judgment. The defendants
claim that they are entitled to judgment as a matter of law on
all of the plaintiffs' claims. They contend that the
plaintiffs' misclassification claim fails for two reasons.
First, they suggest that the statute is preempted by the FAAAA.
Second, they argue that the plaintiffs do not have standing
under the independent contractor statute because their contracts
with RDI were through corporate entities. The defendants also
suggest that Chambers' retaliation claim fails because he does
not have standing unless he proves that he is an employee.
i. Standard of review. "We review a grant of summary
judgment de novo to determine 'whether, viewing the evidence in
the light most favorable to the nonmoving party, all material
facts have been established and the moving party is entitled to
judgment as a matter of law.'" DeWolfe v. Hingham Centre, Ltd.,
464 Mass. 795, 799 (2013), quoting Juliano v. Simpson, 461 Mass.
10The judge dismissed the defendants' counterclaims against
Johnson and the plaintiffs' corporations because they were
rendered moot after summary judgment issued on the
misclassification claim. Given our reversal of the award of
summary judgment, the defendants' claims are no longer moot.
See Donahue v. Boston, 304 F.3d 110, 121 (1st Cir. 2002)
(reversing Federal District Court's denial of plaintiffs' motion
on mootness grounds, after having vacated that court's order
allowing summary judgment for defendant). Accordingly, we
vacate the dismissal of the defendants' counterclaims.
9
527, 529-530 (2012). Because we review this matter de novo, "no
deference is accorded the decision of the judge in the trial
court." Federal Nat'l Mtge. Ass'n v. Hendricks, 463 Mass. 635,
637 (2012).11 The defendants, as the moving parties, bear the
"burden of establishing that there is no genuine issue as to any
material fact and that they are entitled to judgment as a matter
of law." DeWolfe, supra.
ii. Misclassification claim. A. Independent contractor
statute. The independent contractor statute "establishes a
standard to determine whether an individual performing services
for another shall be deemed an employee or an independent
contractor for purposes of our wage statutes."12 Somers v.
Converged Access, Inc., 454 Mass. 582, 589 (2009). "Under this
standard, '"an individual performing any service" is presumed to
be an employee'" (citations omitted). Sebago v. Boston Cab
Dispatch, Inc., 471 Mass. 321, 327 (2015). "The purpose of the
independent contractor statute is 'to protect workers by
classifying them as employees, and thereby grant them the
benefits and rights of employment, where the circumstances
11
The plaintiffs ask this court to allow their motion for
summary judgment on each claim at issue before us. We decline
to do so. See Maxwell v. AIG Domestic Claims, Inc., 460 Mass.
91, 97 (2011) ("Denial of a motion for summary judgment is
interlocutory and hence not subject to an appeal as of right").
12
The independent contractor statute most recently was
amended in 2004. See St. 2004, c. 193, § 26. The statute was
first enacted in 1990. See St. 1990, c. 464.
10
indicate that they are, in fact, employees" (citation omitted).
Depianti v. Jan-Pro Franchising Int'l, Inc., 465 Mass. 607, 620
(2013).
To establish that a presumptive employee is actually an
independent contractor, an employer must prove that
"(1) the individual is free from control and direction
in connection with the performance of the service, both
under his contract for the performance of service and in
fact; and
"(2) the service is performed outside the usual course
of the business of the employer; and
"(3) the individual is customarily engaged in an
independently established trade, occupation, profession or
business of the same nature as that involved in the service
performed."
G. L. c. 149, § 148B. To "rebut the presumption of employment,"
an employer must satisfy all three of these prongs. Depianti,
465 Mass. at 621.
B. The FAAAA. In enacting the FAAAA in 1994, Congress
sought to deregulate the trucking industry. See Dan's City Used
Cars, Inc. v. Pelkey, 133 S. Ct. 1769, 1775 (2013). Congress
acted based on a finding "that [S]tate governance of intrastate
transportation of property had become 'unreasonably
burden[some]' to 'free trade, interstate commerce, and American
consumers.'" Id., quoting Columbus v. Ours Garage & Wrecker
Serv., Inc., 536 U.S. 424, 440 (2002). Toward that end,
Congress included a preemption clause in the statute that
11
expressly preempts any State "law, regulation, or other
provision having the force and effect of law related to a price,
route, or service of any motor carrier . . . with respect to the
transportation of property." 49 U.S.C. § 14501(c)(1) (2012).
"The critical question in any preemption analysis is always
whether Congress intended that [F]ederal [law] supersede [S]tate
law" (citation omitted). Bay Colony R.R. v. Yarmouth, 470 Mass.
515, 518 (2015). While Congress's intent to preempt State law
under the FAAAA is explicit, "that 'does not immediately end the
inquiry because the question of the substance and scope of
Congress'[s] displacement of [S]tate law still remains.'" Id.,quoting Altria Group, Inc. v. Good, 555 U.S. 70, 76 (2008).
In order to determine this scope, we "focus first on the
statutory language, 'which necessarily contains the best
evidence of Congress['s] pre-emptive intent'" (citation
omitted). Dan's City Used Cars, Inc., 133 S. Ct. at 1778. The
breadth of the FAAAA's preemption clause is "purposefully
expansive." Massachusetts Delivery Ass'n v. Coakley, 769 F.3d
11, 18 (1st Cir. 2014). Any State laws "'having a connection
with, or reference to,' carrier '"rates, routes, or services,"
are pre-empted'" (citation omitted). Rowe v. New Hampshire
Motor Transp. Ass'n, 552 U.S. 364, 370 (2008).
Congress's overarching goal in establishing such expansive
preemption was twofold. First, it aimed to "ensure
12
transportation rates, routes, and services that reflect[ed]
'maximum reliance on competitive market forces,' thereby
stimulating 'efficiency, innovation, and low prices,' as well as
'variety' and 'quality'" (citation omitted). Id. at 371.
Second, Congress wanted to sweep aside "a patchwork of [S]tate
service-determining laws, rules, and regulations" that would
undercut this goal. Id. at 373.
The United States Supreme Court has interpreted the FAAAA's
preemptive effect broadly, concluding that preemption occurs "at
least where [S]tate laws have a 'significant impact' related to
Congress'[s] deregulatory and pre-emption-related objectives"
(citation omitted). Id. at 371. Despite its expansive ambit,
however, the FAAAA's preemption is not unlimited. State laws
that "affect fares in only a 'tenuous, remote, or
peripheral . . . manner'" are not preempted (citation omitted).
Id.The defendants contend that the FAAAA preempts the
independent contractor statute for two reasons. First, they
contend that the FAAAA preempts the statute because the second
prong of G. L. c. 149, § 148B (prong two), dictates that motor
carriers such as RDI perform their services using employees
rather than independent contractors. They also argue that prong
two cannot be severed from the statute because the Legislature
drafted the statute as a conjunctive test with three inseparably
13
intertwined prongs. Second, the defendants argue that the FAAAA
preempts the application of the independent contractor statute
to motor carriers such as RDI because enforcement of the
plaintiffs' misclassification claim would have an impermissible
impact on motor carriers' services.13
C. Prong two. The defendants are correct that prong two
draws the independent contractor statute into the gravitational
pull of the FAAAA's preemption. Prong two provides an
impossible standard for motor carriers wishing to use
independent contractors. This de facto ban constitutes an
impermissible "significant impact" on motor carriers that would
undercut Congress's objectives in passing the FAAAA; the statute
containing prong two also forms part of an impermissible
"patchwork" of State laws due to its uniqueness. See Rowe, 552
U.S. at 371, 373.
A delivery driver for a motor carrier necessarily will be
performing services within "the usual course of the business of
the employer" whenever a court concludes that delivery services
13
Before turning to analysis, we denote the limited scope
of the defendants' challenge to the independent contractor
statute. The issue here is not whether the independent
contractor statute is facially preempted, but rather whether the
FAAAA preempts the independent contractor statute, in whole or
in part, as applied to motor carriers such as the defendants.
See, e.g., California Div. of Labor Standards Enforcement v.
Dillingham Constr., N.A., 519 U.S. 316, 319 (1997).
Accordingly, the application of the independent contractor
statute to entities other than motor carriers will be unaffected
by this decision.
14
are part of its usual course of business. See G. L. c. 149,
§ 148B (a) (2). Prong two thereby, in essence, requires that
motor carriers providing delivery services, such as RDI, use
employees rather than independent contractors to deliver those
services. As a result, motor carriers are compelled to adopt a
different manner of providing services from what they otherwise
might choose because prong two dictates the type of worker that
will provide the services. This likely also would have a
significant, if indirect, impact on motor carriers' services by
raising the costs of providing those services. See, e.g., G. L.
c. 151, § 1 (requiring that employers pay employees minimum
wage). The statute containing prong two therefore contravenes
the objectives of Congress in enacting the FAAAA by
"substitut[ing] . . . its own governmental commands for
'competitive market forces' in determining (to a significant
degree) the services that motor carriers will provide." Rowe,
552 U.S. at 372.
Moreover, with prong two included, the statute contravenes
the congressional objective of preventing a "patchwork of
[S]tate service-determining laws." Id. at 371. Unlike the
first and third prongs, prong two "stands as something of an
anomaly" amongst State laws regulating the classification of
workers. Schwann v. FedEx Ground Package Sys., Inc., 813 F.3d
429, 438 (1st Cir. 2016). Very few States have enacted such a
15
test, which explicitly hinges employee status on the connection
between the services performed by the worker and the employer's
usual course of business. Id., and cases cited. The
provision's distinctiveness both undercuts Congress's intent to
prevent "a patchwork of [S]tate service-determining laws, rules,
and regulations," Rowe, supra, and suggests that Congress did
not intend to allow such provisions to stand as a "type of pre-
existing and customary manifestation of the [S]tate's police
power." Schwann, supra.
D. Severability of prong two. The defendants take the
view that the prongs of the independent contractor statute are
nonseverable because they operate conjunctively and are
inextricably intertwined. They argue that, given that prong two
of the independent contract statute triggers the FAAAA's
preemption, the entire statute, on this view, must fall. This
contention fails for several reasons.
When compelled to strike down part of a statute, the court
will, "as far as possible, . . . hold the remainder to be
constitutional and valid, if the parts are capable of separation
and are not so entwined that the Legislature could not have
intended that the part otherwise valid should take effect
without the invalid part." Massachusetts Wholesalers of Malt
Beverages, Inc. v. Commonwealth, 414 Mass. 411, 420 (1993),
quoting Boston Gas Co. v. Department of Pub. Utils., 387 Mass.
16531, 540 (1982). "On the other hand, '[i]f the court is unable
to know whether the Legislature would have enacted a particular
bill without the unconstitutional provision, it will not sever
the unconstitutional provision, but will strike the entire
statute'" (citation omitted). Murphy v. Commissioner of the
Dep't of Indus. Accs., 418 Mass. 165, 169 (1994).
The initial inquiry in determining the severability of the
independent contractor statute is whether the statute is
"capable of separation." Massachusetts Wholesalers of Malt
Beverages, Inc., 414 Mass. at 420. A statute is capable of
separation when, as here, the severed provision "is not so
connected with and dependent upon other clauses of the act as to
constitute an essential factor of the whole." Petition of
Worcester County Nat'l Bank of Worcester, 263 Mass. 394, 400
(1928). Although the prongs of the independent contractor
statute are conjunctive, they operate independently of one
another. The statute as severed would provide two independent
tests that motor carriers would have to meet in order to
establish that their workers are independent contractors.
The defendants contend nonetheless that the statute is "so
entwined that the Legislature could not have intended that the
part otherwise valid should take effect without the invalid
part" (citation omitted). Murphy, 418 Mass. at 169. While the
independent contractor statute is itself silent on the issue of
17
severability, the Legislature has stated generally that "[t]he
provisions of any statute shall be deemed severable, and if any
part of any statute shall be adjudged unconstitutional or
invalid, such judgment shall not affect other valid parts
thereof." G. L. c. 4, § 6, Eleventh. There is, then, a
presumption in favor of the severability of the statute. See
Peterson v. Commissioner of Revenue, 444 Mass. 128, 138 (2005).
The question thus becomes whether upholding the statute as
severed would frustrate the legislative purpose of the
independent contractor statute. That purpose is "to protect
workers by classifying them as employees, and thereby grant them
the benefits and rights of employment, where the circumstances
indicate that they are, in fact, employees." Taylor v. Eastern
Connection Operating, Inc., 465 Mass. 191, 198 (2013). In
enacting the statute, the Legislature intended to provide
greater protection than did the common-law "right to control"
test that previously governed misclassification claims. See,
e.g., Commonwealth v. Savage, 31 Mass. App. Ct. 714, 717 (1991).
Since the "right to control" test is incorporated in the
first prong of the statute, the practical effect of striking the
statute if it were not severable would be to eliminate the third
prong, the so-called "independent business" test. The
elimination of that test, and the return to the status quo ante,
cannot be readily reconciled with the Legislature's intent to
18
provide additional safeguards for the Commonwealth's workers
beyond that test. We agree with the United States Court of
Appeals for the First Circuit that the Legislature would have
preferred "two-thirds of this loaf over no loaf at all" in order
to provide the most protection for workers in the Commonwealth.
See Schwann, 813 F.3d at 441 (concluding independent contractor
statute is severable under Massachusetts law).14
E. The statute as severed. The defendants contend in the
alternative that the FAAAA preempts the independent contractor
statute, even as severed, because the enforcement of the
plaintiffs' claims would have some impact on the defendants'
services.
The statute as severed, applying only the first and third
prongs, does not have "a 'significant impact' related to
Congress'[s] deregulatory and pre-emption-related objectives"
(citation omitted), Rowe, 552 U.S. at 371, because it does not
target or restrict motor carriers in any way. Motor carriers,
14
The defendants point to several instances in which the
Legislature has considered and rejected amendments to the
independent contractor statute that purportedly would have had
the effect of rendering prong two severable. None of these
amendments, however, directly addressed the issue of
severability. Rather, they were attempts to substantively alter
the provisions of the statute. We cannot conclude that, in
rejecting these proposed amendments, the Legislature intended
that the independent contractor statute be nonseverable. Cf.
Cook v. Patient Edu, LLC, 465 Mass. 548, 555 n. 14 (2013) ("We
do not draw conclusions concerning the intent of the Legislature
based on the failure to enact a subsequent amendment").
19
like any other industry, may structure their business model to
use either independent contractors or employees. The first
prong requires that an employer prove that a worker is "free
from control and direction in connection with the performance of
the service," both contractually and factually, in order to
establish that a worker is an independent contractor. See G. L.
c. 149, § 148B (a) (1). The third prong requires, in turn,
that, to be an independent contractor, "the individual is
customarily engaged in an independently established trade,
occupation, profession or business of the same nature as that
involved in the service performed." G. L. c. 149, § 148B (a)
(3). Unlike prong two, there is nothing intrinsic to these
provisions that prevents motor carriers from using independent
contractors. To the extent that the first and third prongs have
an effect on motor carriers, we conclude that such an effect is
too "indirect, remote, and tenuous" to trigger the FAAAA's
preemption. See, e.g., Californians For Safe & Competitive Dump
Truck Transp. v. Mendonca, 152 F.3d 1184, 1189 (9th Cir. 1998),
cert. denied, 526 U.S. 1060 (1999) (upholding California's
prevailing wage law against FAAAA preemption claim).
Moreover, the statute as severed represents exactly the
sort of traditional exercises of State police power where
preemption is presumptively disfavored. See New York State
Conference of Blue Cross & Blue Shield Plans v. Travelers Ins.
20
Co., 514 U.S. 645, 655 (1995) ("where [F]ederal law is said to
bar [S]tate action in fields of traditional [S]tate
regulation, . . . we have worked on the 'assumption that the
historic police powers of the States were not to be superseded
by the Federal Act unless that was the clear and manifest
purpose of Congress'" [citation omitted]). While the uniqueness
of prong two, and its significant impact on motor carriers,
suffices to overcome this presumption, the statute with only
prongs one and threethe first and third prongs falls into the
category of "generally applicable background regulations" that
Congress presumptively does not intend to preempt. See Dilts v.
Penske Logistics, LLC, 769 F.3d 637, 646 (9th Cir. 2014), cert.
denied, 135 S. Ct. 2049 (2015).
Finally, without prong two, the statute contains only
commonly used State and Federal tests of employment, indicating
that it does not fall within the intended scope of the FAAAA's
preemption.15 In enacting the FAAAA, Congress was concerned with
15
At least sixteen other States have enacted a statute
using similar language to that in the first and third prongs of
G. L. c. 149, § 148B -- the right to control and independent
business tests -- to determine whether workers are employees or
independent contractors. See Ark. Code Ann. § 11-10-210(e)
(2016); Colo. Rev. Stat. § 8-70-115(1)(b) (2016); Conn.
Gen. Stat. § 31-222(a)(1)(B) (2016); Del. Code Ann. tit. 19,
§ 3302(10) (2016); Idaho Code Ann. § 72-1316(4) (2016);
La. Rev. Stat. Ann. § 23:1472(12)(E) (2016); Me. Rev. Stat.
tit. 26, § 1043(11)(E) (2016); Nev. Rev. Stat. § 612.085 (2016);
N.M. Stat. Ann. § 51-1-42(F)(5) (2016); 43 Pa. Stat. Ann.
21
State laws that created a "patchwork" of differing State
regulations that would interfere with "the competitive
marketplace." Rowe, 552 U.S. at 373. State laws that are "more
or less nationally uniform" do not pose a "patchwork problem."
Schwann, 813 F.3d at 440.
The defendants' contention that the statute if severed
nonetheless would be preempted rests on the untenable view that
the FAAAA preempts any State regulation that, if enforced, would
have any impact on motor carriers. In advancing this
§ 753(l)(2)(B) (2016); S.D. Codified Laws § 61-1-11 (2016);
Tenn. Code Ann. § 50-7-207(e)(1) (2016); Utah Code Ann. § 35A-4-
204(3) (LexisNexis 2016); Vt. Stat. Ann. tit. 21, § 1301(6)(B)
(2016); Wash. Rev. Code § 50.04.140 (2016); W. Va. Code § 21A-
1A-16(7) (2016).
Additionally, the test to determine employment under the
Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (2012) (FLSA),
also includes analysis similar to the first and third prongs of
G. L. c. 149, § 148B. See, e.g., Donovan v. Brandel, 736 F.2d
1114, 1117, 1120 (6th Cir. 1984) (noting that degree of
purported employer's control and economic dependence of worker
on employer are both relevant to determining employment under
FLSA). In a majority of States, the common-law test
incorporates the right to control analysis of the first prong,
and in some States, the test also incorporates the independent
business analysis of the third prong. See Feary, Independent
Contractor Employment Classification: A Survey of State and
Federal Laws in the Motor Carrier Industry, 35 Transp. L.J. 139,
146-148 (2008). Finally, the language in the first and third
prongs is integral to parts of the Federal Internal Revenue
Service test to determine employment. See Rev. Rul. 87-41,
1987-1 C.B. 296 (setting forth twenty-factor test to determine
employment status, which includes level of control exercised by
employer and whether worker works full time for that employer).
22
contention, the defendants rely primarily on the United States
Supreme Court's decision in Northwest, Inc. v. Ginsberg, 134
S. Ct. 1422 (2014). They mistakenly interpret Ginsberg as a
pronouncement that the application of any State law to motor
carriers is preempted if it would have even a tangential impact
on their provision of services. The Ginsberg Court held that
the FAAAA preempted a plaintiff's State law claim for breach of
the covenant of good faith and fair dealing against an airline
for terminating his membership in its frequent flyer program.
See id. at 1426-1427. The claim at issue in Ginsberg, however,
directly concerned services provided by the airline -- admission
to the frequent flyer program and its attendant benefits. See
id. at 1430-1431. Hence, the forbidden connection under the
FAAAA was obvious: the plaintiffs' requested relief consisted
of better services at a lower rate.
What Ginsberg teaches is that State laws are "more likely
to be preempted when they operate at the point where carriers
provide services to customers at specific prices." Dilts, 769
F.3d at 646. Here, by contrast, the plaintiffs'
misclassification claim is not directly related to the
defendant's "services," but relates instead to a "generally
applicable background regulation[] . . . several steps removed
from prices, routes, or services." Id. This tenuous connection
to services does not, without more, fall within the FAAAA's
23
preemptive scope. See New York State Conference of Blue Cross &
Blue Shield Plans, 514 U.S. at 655 ("If 'relate to' were taken
to extend to the furthest stretch of its indeterminacy,
then . . . Congress's words of limitation [would be] a mere
sham"). If the FAAAA preempted any regulation that could result
in an effect on motor carriers, the defendants would be exempt
from all State regulation, a result that the FAAAA clearly does
not countenance.16 See Dan's City Used Cars, Inc., 133 S. Ct. at
1778 ("the breadth of the words "related to" [in the FAAAA] does
not mean the sky is the limit").
Because there are material facts in dispute as to the
plaintiffs' claims under the statute as severed, summary
judgment should not have been allowed on the plaintiffs'
misclassification claim.
F. Plaintiffs' standing. The defendants contend that the
grant of summary judgment on the plaintiffs' misclassification
claims was warranted for the separate reason that the plaintiffs
16
Indeed, the FAAAA's preemption clause explicitly exempts
several areas of State regulation that could result in an
increase in costs for motor carriers. For example, the FAAAA
explicitly allows State regulation of motor carriers related to,
inter alia, "motor vehicles," "highway route controls,"
"limitations based on the size or weight of the motor vehicle,"
and "insurance requirements." See 49 U.S.C. § 14501(c)(2)(A).
This list was not "intended to be all inclusive, but merely to
specify some of the matters that are not 'prices, rates or
services' and which are therefore not preempted." H.R. Conf.
Rep. 103-677, 103d Cong., 2d sess. (1994), reprinted in 1994
U.S.C.C.A.N. 1715, 1756.
24
lack standing to bring such claims. The defendants maintain in
this regard that the protections of the independent contractor
statute apply only to "individuals" who perform services as
such. See G. L. c. 149, § 148B ("For the purpose of this
chapter and chapter 151, an individual performing any service,
except as authorized under this chapter, shall be considered to
be an employee . . ."). They argue that the plaintiffs, in
contracting with RDI through corporate entities, foreclosed any
claim for misclassification. Because the relevant facts are in
dispute, however, summary judgment on this basis is unwarranted.
The defendants urge that the plaintiffs ceded standing
under the independent contractor statute because they
purposefully chose and financially benefited from using the
corporate form. They construe the statutory reference to
"individuals who provide services" as meaning that only workers
who provide services as individuals have standing. In so
limiting the scope of the statute, the defendants cite to an
advisory from the Attorney General stating that "legitimate
independent contractors and business-to-business relationships
in the Commonwealth . . . will not be adversely impacted by [the
independent contractor statute]." See Advisory 2008/1, Attorney
General's fair labor and business division.
The statutory reference to "individuals who provide
services," however, does not expressly exclude individuals who
25
provide services through a corporation. The Attorney General's
advisory, which the defendants emphasize reflects this
understanding, notes as well that "businesses . . . created and
maintained in order to avoid [application of the independent
contractor statute]" would not immunize employers against
enforcement.17 The Attorney General articulated certain factors
material to a determination whether the corporate form
represents a legitimate business-to-business relationship, or
one whose raison d'etre is to prevent the classification of
workers as employees:
"[Whether] the services of the alleged independent
contractor are not actually available to entities beyond
the contracting entity, even if they purport to be so;
whether the business of the contracting entity is no
different than the services performed by the alleged
independent contractor; or the alleged independent
contractor is only a business requested or required to be
so by the contracting entity."
Id. This nonexhaustive list of factors properly focuses on
whether the worker's use of the corporate form was at the
worker's behest or forced upon the worker by an employer in
order to misclassify him or her. See Anderson vs.
17
"Insofar as the Attorney General's office is the
department charged with enforcing the wage and hour laws, its
interpretation of the protections provided thereunder is
entitled to substantial deference, at least where it is not
inconsistent with the plain language of the statutory
provisions." Smith v. Winter Place LLC, 447 Mass. 363, 367-368
(2006).
26
Homedeliveryamerica.com, Inc., U.S. Dist. Ct., No. 11-10313-GAO
(D. Mass. Dec. 30, 2013).
Here, the plaintiffs have alleged enough facts to establish
a genuine issue of material fact as to whether they have
standing under the independent contractor statute. They assert
that they formed companies only to be able to contract with RDI,
did not perform services for any companies other than RDI, and
were forbidden from performing work for any companies other than
RDI. These allegations raise the question whether the
plaintiffs incorporated for their own benefit, as the defendants
suggest, or whether RDI required them to incorporate in order to
misclassify them as independent contractors. Summary judgment
is precluded on this basis.
iii. Retaliation claim. Apparently due to the grant of
summary judgment to the defendants dismissing the plaintiffs'
misclassification claim on preemption grounds, Chambers's
retaliation claim also was dismissed. The parties disagree
whether the retaliation claim is independent of the
misclassification claim, and whether it properly was dismissed.
General Laws c. 149, § 148A, provides that "[a]ny employer
who discharges or in any other manner discriminates against any
employee because such employee . . . has instituted . . . any
proceeding under or related to this chapter . . . shall have
violated this section." Chambers claims that his contract with
27
RDI was terminated in retaliation for the assertion of his
rights under the independent contractor statute, and that
irrespective of whether he succeeds in establishing that he was
misclassified as an independent contractor, he may pursue his
claim for retaliation. By contrast, the defendants maintain
that Chambers's retaliation claim properly was dismissed along
with the misclassification claim, because G. L. c. 149, § 148A,
only applies to workers classified as employees under the
independent contractor statute. Insofar as we vacate the
allowance of summary judgment on the plaintiffs'
misclassification claim, Chambers's retaliation claim is
revived, even under the defendants' suggested interpretation of
the statute.18 We leave for another day resolution of this
dispute as to statutory interpretation.
b. Emergency motion for protective order and motion for
reconsideration. The plaintiffs argue that the judge erred in
denying their emergency motion for a protective order to enjoin
RDI from contacting its workers and to invalidate any releases
that were executed. They contend that the judge was obligated
to allow their requests because the defendants' communications
with its workers were misleading and coercive. We review the
judge's denial of the motions to determine whether either
18
The plaintiffs could succeed in establishing that they
are misclassified employees.
28
constituted an abuse of his discretion. See Merles v. Lerner,
391 Mass. 221, 226 (1984). An abuse of discretion occurs when
the judge's decision rests upon "a clear error of judgment in
weighing the factors relevant to the decision . . . such that
[it] falls outside the range of reasonable alternatives," or
when the judge's decision constitutes a "significant error of
law" (citations omitted). Commonwealth v. Ellis, 475 Mass. 459,
476 (2016).
The plaintiffs filed their motion under Mass. R. Civ. P. 23
(d), 365 Mass. 767 (1974), which provides, in relevant part,
that a court "may require such security and impose such terms as
shall fairly and adequately protect the interests of the class
in whose behalf the action is brought or defended." "We have
noted that [rule 23] '"was written in the light of [Fed. R. Civ.
P. 23]," . . . hence case law construing the Federal rule is
analogous and extremely useful'" (citations omitted). Longval
v. Commissioner of Correction, 448 Mass. 412, 417 n.9 (2007).
In Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981), where
a protective order had been issued pursuant to Fed. R. Civ. P.
23(d), the United States Supreme Court concluded that "[b]ecause
of the potential for abuse, a . . . court has both the duty and
the broad authority to exercise control over a class action and
to enter appropriate orders governing the conduct of counsel and
parties." A protective order is appropriate to prevent
29
"[m]isleading or coercive communications with potential class
members that could or are intended to undermine participation in
a class or collective action." Davine vs. Golub Corp., U.S.
Dist. Ct., No. 14-30136-MGM (D. Mass. Oct. 24, 2014), citing
Gulf Oil Co., supra at 102. In this regard, courts should
scrutinize with care instances in which employers send
communications to class and putative class members who are their
workers, given the heightened possibility of coercion between an
employer and its workers. See Kleiner v. First Nat'l Bank of
Atlanta, 751 F.2d 1193, 1202 (11th Cir. 1985). Moreover, when
employers do send communications to class members, putative or
otherwise, "it is critical that the class receive accurate and
impartial information regarding the status, purposes and effects
of the class action." Id.Nonetheless, the United States Supreme Court made clear
that a court's authority to issue protective orders is bound by
the limits of the First Amendment to the United States
Constitution. See Gulf Oil Co., 452 U.S. at 103 (striking down
protective order as invalid restraint on expression).
Accordingly, the issuance of a protective order "should be based
on a clear record and specific findings that reflect a weighing
of the need for a limitation and the potential interference with
the rights of the parties." Id. at 101. Additionally, the
30
issuance of a protective order must be "justified by a
likelihood of serious abuses." Id. at 104.
In denying the plaintiffs' motions, the judge appears
adequately to have taken these factors into account. The judge
denied the plaintiffs' initial emergency motion because he
concluded that "the subject correspondence issued to present and
former drivers [for RDI] is neither misleading [n]or coercive
and amply notifies recipients of the pending litigation." The
plaintiffs' motion for reconsideration asserted similar grounds
as their initial motion, with the addition of allegations that
Deslongchamps had terminated Chambers in retaliation for
asserting his rights under the independent contractor statute.
The motion stated also that several unnamed affiants contacted
the plaintiffs' counsel, stating that they feared retaliation
from RDI if they did not endorse the checks. The judge denied
the motion for reconsideration because "there [had] not been a
sufficient showing that Chambers was terminated in violation of
[G. L. c. 149, § 148A,] or that the defendants engaged in
illegal coercive tactics in connection with the settlement of
individual claims."
The judge's determination that the letters were not
coercive or misleading such that they merited the issuance of a
protective order was not unreasonable based on the record before
him. The letters contained a citation to the plaintiffs' class
31
action and they fairly described the status of the case.
Additionally, the letters explicitly stated that RDI would not
consider the employees' decision whether to endorse the check in
business dealings unrelated to the matter. The letters also
advised the recipients that they may wish to consult with an
attorney before deciding whether to endorse the check. Finally,
the fact that several drivers contacted the plaintiffs' counsel
suggests that the letters provided sufficient information to
allow such contact.
Absent further information suggesting that the
communication was misleading or coercive, we conclude that the
judge, on the record before him, did not abuse his discretion in
denying the emergency motion for a protective order or the
motion for reconsideration. We do not express a view as to the
validity of the releases in question.19
3. Conclusion. The denials of the emergency motion for a
protective order and the motion for reconsideration are
affirmed, and the grant of summary judgment is vacated. The
19
The validity of such releases and the judge's decision on
a preliminary basis not to issue a protective order invalidating
them are quite different matters. We note that releases "will
be enforceable as to the statutorily provided rights and
remedies conferred by the Wage Act only if such an agreement is
stated in clear and unmistakable terms." Crocker v. Townsend
Oil Co., 464 Mass. 1, 14 (2012). "[T]he release must be plainly
worded and understandable to the average individual, and it must
specifically refer to the rights and claims under the Wage Act
that the employee is waiving." Id. Whether the releases here
satisfy such criteria is not before us.
32
matter is remanded to the Superior Court for further proceedings
consistent with this opinion.
So ordered.