Timothy P. Chambers & another vs. RDI Logistics, Inc., & another; Dee & Lee, LLC, & another, third-party defendants
Case Details
- Citation
- 476 Mass. 95
- Judge(s)
- Present: Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, & Budd, JJ.
- Procedural Posture — the stage the case had reached
- appeal
- State
- Massachusetts
- Circuit
- 1st Circuit
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
The appellate court reversed summary judgment on the misclassification claim and retaliation claim, holding that prong two of the independent contractor statute is severable from the preempted portion and material facts remain disputed; however, the court affirmed the denial of the protective order against RDI's ex parte communications.
Excerpt
Timothy P. Chambers & another vs. RDI Logistics, Inc., & another; Dee & Lee, LLC, & another, 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. In a civil action brought by plaintiffs who contracted with the defendants through small corporations that the plaintiffs had formed for the purpose of contracting to perform services in Massachusetts as furniture delivery drivers, the judge erred in granting summary judgment in favor of the defendants, where, although a portion of G. L. c. 149, § 148B, the independent contractor statute, is preempted by the Federal Aviation Administration Authorization Act of 1994, 49 U.S.C. § 14501(c), the remainder was sever-able and remained applicable to the plaintiffs’ claim of misclassification, regarding which material facts remained in dispute [99-108]; and where the plaintiffs had alleged enough facts to establish a genuine issue of material fact whether they had standing to assert claims for misclassification under the independent contractor statute [108-109]; moreover, the judge erred in dismissing, without explanation, one plaintiff’s claim of retaliation [109-110], In a civil action brought by plaintiffs who contracted with the defendants through small corporations that the plaintiffs had formed for the purpose of contracting to perform services in Massachusetts as furniture delivery drivers, the judge did not abuse his discretion in denying the plaintiffs’ emergency motion for a protective order to enjoin one defendant from contacting its workers, where the judge’s determination that the communications were not coercive or misleading was not unreasonable. [110-112] 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, L; a motion for reconsideration was considered by him; and the case was heard by him on motions for summary judgment. The Supreme Judicial Court granted an application for direct appellate review. Harold L. Lichten (Peter M. Delano also present) for the plaintiffs. Michael T. Grant (Andrew J. Fay also present) for the defendants. Individually and on behalf of all others similarly situated. Leroy Johnson, individually and on behalf of all others similarly situated. Richard J. Deslongchamps, Jr. Three T & C Transport, Inc. 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 (FA A A A), 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 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. The plaintiffs 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. The contracts contained both nonsolicitation and noncompete clauses, which effectively prevented the plaintiffs from performing any delivery work for RDTs competitors during their tenure with the company and for three years thereafter. RDTs 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 RDTs logo or the logos of RDTs 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 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. 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. 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, Deslong-champs fired Chambers. Two days later, the plaintiffs filed a class action complaint against RDI and Deslongchamps, individually, alleging misclass-ification. 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, § 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 montos 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 toe 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 communications with “putative class members.” They asked the judge to strike “any alleged settlements obtained as the result of toe letters and checks” that had been mailed. The motion was denied. A few months later, toe 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 toe 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. The plaintiffs’ complaint was dismissed, along with the defendant’s claims against Johnson and the plaintiffs’ companies. 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’s 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. 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). 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.” 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 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 [SJtate governance of intrastate transportation of property had become ‘unreasonably burdensome]’ 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 expressly preempts any State “law, regulahon, 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 Congresses] 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 Congresses] pre-emptive intent’ ” (citahon 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 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 Congresses] 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 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. C. Prong Wo. 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 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 “substituting] ... 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 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, 41
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