The Massachusetts SJC has ruled in Bernard Sebago, et al. v. Boston Cab Dispatch, Inc., SJC-11757, that drivers were properly classified as independent contractors, pursuant to G. L. c. 149, § 148, overturning an Appeals Court ruling in the drivers’ favor last year. The plaintiffs in the case, licensed taxicab drivers, alleged that they were misclassified as independent contractors, depriving them of minimum wages, overtime pay, tips, and the protections afforded by the Wage Act, G. L. c. 149, § 148. They alleged that the owners violated G. L. c. 149, § 148 (Wage Act); G. L. c. 151, §§ 1, 7 (minimum wage law); G. L. c. 151, § 1A (overtime law); and G. L. c. 149, § 152A (tips law).
In Massachusetts, it is presumed that a worker is an employee unless the following criteria are met:
- (A) 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;
- (B) the service is performed outside the usual course of the business of the employer; and
- (C) 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.
The Court first determined whether the drivers provided services to each of the specific types of defendants (the defendants included taxicab owners, radio associations, and a taxicab garage). The trucking and courier industries should take note, however, that in analyzing whether the drivers provided services to each of the specific types of defendants, Judge Cordy specifically cited to a portion of a Federal Court decision to compare its rationale here: “Contrast Massachusetts Delivery Ass’n v. Coakley, 769 F.3d 11, 14, 21 n.4 (1st Cir. 2014) (“[C]ouriers deliver packages for delivery companies. There can be no dispute that they act in the course of business for the delivery companies, even if one performs the deliveries and the other arranges the deliveries”). Nonetheless, the SJC held that these taxicab drivers were providing services for the collective defendants.
It then moved on to determine whether the drivers were employees or independent contractors. In analyzing Part A of the criteria as to whether the driver is free from control and direction, the SJC held: “Drivers receive minimal direction from medallion owners or radio associations. The drivers choose the shifts they work and are free to transport as many or as few passengers as they wish during those shifts.”
In analyzing Part B of the criteria as to whether the driver’s service is performed outside the usual course of the business of the owners, the Court distinguished between the driver’s service of providing transportation from the owners’ business of leasing taxicabs to the driver, which is not dependent on the outcome of the driver’s services.
In regards to the last prong, the SJC relied on an earlier precedent, that “[T]he critical inquiry under this prong is whether ‘the worker is capable of performing the service to anyone wishing to avail themselves of the services or, conversely, whether the nature of the business compels the worker to depend on a single employer for the continuation of the services.’ Athol Daily News, 439 Mass. at 181.” The Court held that “[d]rivers earn as much as they are able and need not accept a single dispatch.”
The Court’s decision was reached within the context of the municipal regulatory scheme for taxicabs and held that “[it] creates a system whereby taxicab drivers may operate as employees or as entrepreneurs with their own separately defined and separately regulated businesses.” While each case of alleged worker misclassification is fact and industry specific, owners with a workforce comprising both employees and independent contractors should view this decision as favorable.
