Anderson et al v. Home Delivery America et al

Filing 99

Judge George A. OToole, Jr: OPINION AND ORDER entered granting 65 Motion for Partial Summary Judgment (Lyness, Paul)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 11-10313-GAO
CALVIN ANDERSON, MURILO SILVA, RALSTON JOHNSON, and JOHNNIE FUNCHES,
individually and on behalf of a class of similarly situated individuals,
Plaintiffs,
v.
HOMEDELIVERYAMERICA.COM, INC., d/b/a Home Delivery America,
and SLS LOGISTICS SERVICES, INC.,
Defendants.

OPINION AND ORDER
December 30, 2013
O’TOOLE, D.J.
The plaintiffs are delivery drivers for Home Delivery America (“HDA”). The complaint
alleges that HDA, as well as Sears Logistics Services (“SLS”), which is alleged to be a joint
employer with HDA, have misclassified the plaintiffs as independent contractors contrary to the
requirements of Mass. Gen. Laws ch. 149, §148B, and as a result have violated the
Massachusetts Wage Law, Mass. Gen. Laws ch. 149, § 148. The plaintiffs move for partial
summary judgment solely against HDA, seeking a determination that they are employees of
HDA and that HDA is consequently liable for violating Section 148.
I.

Background
The undisputed facts relevant to this motion are as follows:
The plaintiffs perform work for HDA by delivering and installing products that customers

have bought through Sears and K-Mart stores. SLS provides logistical services in managing
home delivery of retail merchandise, but it has outsourced its delivery service in the
Massachusetts area to HDA. HDA works out of SLS’s warehouse in Westwood. Plaintiffs

Anderson, Silva, and Funches all contracted with HDA to perform delivery services. Each
contracted with HDA not directly in his individual capacity but rather through a business form
such as a limited liability company or corporation. The drivers drove trucks bearing a Sears logo,
wore uniforms with both Sears and HDA logos, and performed deliveries in accordance with
daily manifests provided by SLS and HDA. Drivers, such as plaintiffs Anderson, Silva, and
Funches, each drove his own truck and also employed and paid a “helper” to assist in the
deliveries. As a helper, plaintiff Johnson did not have a contract with HDA, and he was paid by
the driver whom he helped. When under contract, each driver worked full time and exclusively
delivering for HDA.
II.

Discussion
Under Massachusetts law, an “individual” performing services for another is considered

to be an employee of the other unless:
(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.
Mass. Gen. Laws ch. 149, § 148B. All three conditions must be established for HDA to prevail in
its assertion that the drivers were not employees but independent contractors, and the burden is
on HDA to establish each condition. De Giovanni v. Jani-King Int’l, Inc., 262 F.R.D. 71, 84 (D.
Mass 2009). In other words, there is a presumption that the drivers are employees, and it falls to
HDA to prove otherwise. See Somers v. Converged Access, Inc., 911 N.E.2d 739, 747 (Mass.
2009).

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HDA does not contest the relevant facts. It instead makes two legal arguments. First, it
says that the plaintiffs fall outside the protection of Section 148B because they contracted with
HDA through legal entities, and not personally, so that they are not “individuals” within the
meaning of the statute. Second, HDA argues that Section 148B is preempted by the Federal
Aviation Administration Authorization Act, 49 U.S.C. § 14501(c)(1) (“FAAAA”).
HDA’s first argument depends on the appropriateness of choosing to honor form over
substance, so that when Joe Driver drives his truck without incorporating he is an employee, but
if he drives his truck under the aegis of Joe Driver, Inc., then he is an independent contractor. But
that formalistic distinction is precisely what Section 148B is intended to preclude. As the
Massachusetts Attorney General has noted, a principal objective of the law is to prevent potential
employers, who would be otherwise subject to the wage statute, Section 148, from avoiding
compliance by requiring the persons they contract with to do so under legal forms “such as LLCs
and S corporations.” An Advisory from the Attorney General’s Fair Labor Division on M.G.L.
149 § 148B (“AG Advisory”). I agree with those courts that have concluded that a worker can
qualify as an employee under § 148B “even if he has incorporated his business, and the
employer's formal relationship is with the entity and not the individual.” Martins v. 3PD, Inc.,
2013 WL 1320454, at *16-17 (D. Mass. Mar. 28, 2013). See also, De Giovanni, 262 F.R.D. at
86.
The inquiry is whether in substance the worker is an employee or a person (or entity)
acting genuinely as an independent contractor. There is no convenient bright line to be used, and
each case must be determined on its own facts. Recently, in another case I decided that a plaintiff
was not an “individual” within the meaning of Section 148B. Debnam v. FedEx Home Delivery,
2013 WL 5434142 (Sept. 27, 2013). In that case, the plaintiff claiming to be an employee under

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Section 148B managed multiple delivery routes out of two locations. He owned multiple vehicles
and had hired over sixty employees during the course of his contract with FedEx. Id. I concluded
that under those circumstances he was engaged in a “legitimate . . . business-to-business
relationship” (AG Advisory) with FedEx and was therefore not an “individual” employee within
the meaning of the statute. Id.
In contrast, the facts of this case show that the plaintiffs do qualify as employees under
Section 148B. They worked as individual truck drivers performing full-time personal services
exclusively for HDA. They did not manage any delivery operations beyond their personal
(individual) work for HDA. HDA also dictated that the drivers were required to hire a helper,
who had to wear the Sears and HDA uniform, and undergo drug and background testing
performed by HDA.
Johnson, who was a helper, also qualifies as an employee under Section 148B even
though he did not directly contract with HDA. The Supreme Judicial Court has held that “the
lack of a contract for service between the putative employer and putative employee does not
itself preclude liability under G.L. c. 149, § 148B.” Depianti v. Jan-Pro Franchising Int’l, Inc.,
990 N.E.2d 1054, 1069 (Mass. 2013). In Depianti, the question arose in the context of a two-tier
franchising arrangement. Jan-Pro, the franchisor, contracted with a “master franchisee,” which
then contracted with a “unit franchisee,” the plaintiff. Noting that remedial statutes such as
Section 148B are “entitled to liberal construction,” id. at 1066, the court held that the unit
franchisee was not excluded from being considered an employee simply because of the lack of a
direct contractual relationship with the franchisor. A helper stands in essentially the same
relationship to HDA as the unit franchisee did to the franchisor. HDA makes no further argument
with regard to helpers beyond the simple lack of a direct contractual relationship.

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HDA also argues, quite briefly, that Section 148B is preempted by the FAAAA because a
ruling in the plaintiffs’ favor would interfere with its contracting with third party businesses to
perform delivery services for it, arguably impinging improperly on federally regulated activity.
This is the same categorical error. It is not a proper interpretation of the statute to think that
because an individual who incorporates may still be considered an employee, then any
incorporated entity must be considered an employee. Section 148 does not interfere with
legitimate business-to-business independent contractor relationships but rather seeks to prevent
companies from avoiding the Massachusetts wage law with respect to workers who are in
substance employees. See Martins, 2013 WL 1320454, at *10-13 (finding that Section 148B is
not preempted by the FAAAA); Massachusetts Delivery Ass’n v. Coakley, 2013 WL 5441726, at
*4-10 (D. Mass. Sept. 26, 2013) (same).
The final issue is whether HDA violated the Massachusetts Wage Law by taking
unlawful deductions from the drivers’ pay. Mass. Gen. Laws ch. 149, § 148. HDA does not
contest the allegation that deductions were taken from the plaintiffs. HDA’s argument is simply
that the plaintiffs were not employees and therefore the wage statute does not apply. For the
reasons discussed above, it does apply and it follows that HDA’s deductions from the plaintiffs’
pay violated Section 148.
III.

Conclusion
For the foregoing reasons, the plaintiffs’ Motion for Partial Summary Judgment as to

liability against HDA (dkt. no. 65) is GRANTED.
It is SO ORDERED.
/s/ George A. O’Toole, Jr.
United States District Judge

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