Issue link: https://read.dmtmag.com/i/164136
Cover Story This classification statute has teeth. It goes on to provide that the misclassification of a worker as an independent contractor would result in a violation of Massachusetts' Wage Act, which would trigger the employer's exposure to extensive criminal and civil penalties, including punitive damages and attorney's fees. Section 148B implements the above socalled "3-prong test" – sometimes referred to as the "ABC Test" – for determining whether a worker is an employee or may properly be classified as an independent contractor. Importantly, the statute is conjunctive and requires all three requirements to be met before a driver can be classified as an independent contractor. For motor carriers, of course, the problem lies in the second, so-called "Prong 2" requirement – that the service being performed by the owner/operator is "outside the usual course" of the motor carrier's business. As a practical matter, that requirement renders it impossible for a motor carrier to use owner/operators and satisfy the statutory requirements. By the very nature of their work, the services being performed by a truck driver cannot be shown to be "performed outside the usual course of the business of the employer." Hence, motor carriers operating in Massachusetts who want to use the independent contractor model cannot lawfully do so without great risk. Since Section 148B was enacted, enterprising plaintiff lawyers have seized upon this new fertile ground to develop a cottage industry in filing both individual and class action lawsuits on behalf of independent contractor-drivers against private and for-hire motor carriers alleging misclassification claims, and in some cases Massachusetts' Attorney General has pursued civil and criminal investigations and prosecutions against motor carriers resulting in substantial fines and penalties. It is virtually impossible for carriers to successfully defend such actions because they cannot show the service being performed by the driver is "outside the usual course of" the motor carrier's business. The cases rarely go to trial but are usually settled – for substantial amounts – at or shortly after the summary judgment stage. In short, driver misclassification cases in Massachusetts have been a bonanza for plaintiff lawyers, as few defendants have pressed the legal defense that the misclassification statute should be preempted by the Federal Aviation Administration Authorization Act of 1994, 49 U.S.C. §14501(c) ("FAAAA"). The FAAAA, provides, inter alia, that a state "may not enact or enforce a law, regulation or other provision having the force and effect of law related to a price, route or service of any motor carrier . . . or any motor private carrier, broker or freight forwarder with respect to the transportation of property." 49 U.S.C. § 14501(c). Although several cases involving the application of Section 148B to motor carriers have been decided by Massachusetts trial courts and many in the transportation industry and transportation bar have informally advocated FAAAA preemption of Section 148B, particularly its "Prong 2," the affirmative preemption defense has lain dormant and has been largely ignored – until recently. In two recent decisions, courts have split in their views on whether the FAAAA preempts Section 148B, and in a third case the issue is pending. Hence, though still up in the air, the issue seems on track for resolution soon. Martins v. 3PD, Inc. is a class action pending in the U.S. District Court for the District of Massachusetts in which the plaintiff drivers allege the defendant motor carrier is liable under Section 148B for misclassifying them as independent contractors. The defendant moved for summary judgment on the basis of FAAAA preemption, claiming the statute effectively would impose the enforcement of a state law adversely affecting its prices, routes or services, and hence is preempted by the FAAAA. By decision dated March 28, 2013 on the parties' crossmotions for summary judgment, the Court denied the defendant's motion and granted the plaintiffs' motion, ruling the FAAAA did / owner operator / September 2013 / / 22 OO 0913 text.indd 22 8/7/13 8:30 AM