Delivery Drivers as Independent Contractors under Massachusetts Law Preempted by Federal Law

Delivery Drivers as Independent Contractors under Massachusetts Law Preempted by Federal Law

Under Massachusetts Law, in order for you to be properly classified as an independent contractor, the company that you perform services for must establish, among other things, that the service you provide is different from the service that the company provides. Companies such as FedEx hire couriers who provide delivery services and are paid for each completed delivery as opposed to by the hour or week.

In a recent case FedEx contended that because individual couriers necessarily act within the usual course of the business of their employers, they would always be deemed employees under the Massachusetts Independent Contractor Statute. As such, the statute “effectively prohibits motor carriers from engaging their couriers as independent contractors.”

In light of a recent First Circuit Decision, Massachusetts Delivery Ass’n v. Coakley, 769 F.3d 11 (1st Cir. 2014) [MDA], the U.S. District Court for the District of Massachusetts withdrew its previous summary judgment order and instead awarded summary judgment in favor of FedEx on the employee’s count for wrongful classification of pick-up and delivery drivers as independent contractors in violation of Mass. Gen. Laws Ch. 149, § 148B. See Schwann v. FedEx, (Civil Action No. 11-11094-RGS) (Feb. 5, 2015) [Schwann II].

In Schwann II, the District Court found that the Federal Aviation Administration Authorization Act (FAAAA) preempted the second element of §148B. The FAAAA expressly preempts state laws “related to a price, route, or service of any motor carrier . . . with respect to the transportation of property.”

The Massachusetts District Court relied on MDA, which held first, “a statute’s ‘potential’ impact on carriers’ prices, routes, and services can be sufficient if it is significant, rather than tenuous, remote, or peripheral. Empirical evidence is not necessary to warrant FAAAA preemption, and courts may “look to the logical effect that a particular scheme has on the delivery of services or the setting of rates.” Second, “FAAAA preemption does not apply when a state statute concerns motor carriers in matters unrelated to the transportation of property.” The Court noted, “it is not sufficient that a state law relates to the ‘price, route, or service’ of a motor carrier in any capacity; the law must also concern a motor carrier’s ‘transportation of property.’ ”

In the most recent case, the Court in Schwann II held, “looking to such logical (if indirect) effects, the application of section 148B to FedEx and other similar motor carriers would unquestionably have an impact on ‘price, route[s], [and] services’ by in effect proscribing the carrier’s preferred business model.”

The Court rejected the plaintiff’s contention that even if the second prong of section 148B is preempted, he would nonetheless prevail at summary judgment on the basis of the third prong. However, as FedEx points out, the preempted prong is not severable from the statute as a whole. An employer must meet its burden as to each prong to properly classify a worker as an independent contractor.”

The court noted “the regulatory authority retained by the states [is] not ‘to be used as a guise for continued economic regulation as it relates to prices, routes or services.’ ”

This recent decision in Schwann II is an impediment for courier workers who claim employee status under Massachusetts Law. Couriers who once were protected by employee status under the statute may now have to fight to obtain that employee status against companies who wish to classify couriers as independent contractors. If you have any concerns about your status as an employee or independent contractor please contact Adam Shafran.

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