GREENBERG TRAURIG, LLP | ATTORNEYS AT LAW | ©2013 Greenberg Traurig, LLP. All rights reserved. Latest Court Decisions Interpreting Massachusetts General Laws, Chapter 149, Section 148B Terence P. McCourt MCLE Boston, Massachusetts October 21, 2015

Greenberg Traurig, LLP | gtlaw.com 2 MASSACHUSETTS INDEPENDENT CONTRACTOR TEST Employment Status Is Presumed Unless the Following is Established: A. Individual is free from control and direction in performance of the service; B. The service is performed outside the usual course of the business of the employer; and C. Individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

Greenberg Traurig, LLP | gtlaw.com 3 Liability Two Step Analysis: 1. Violation of Ch. 149, Section 148B 2. Violation of other legal requirements such as wage law

Greenberg Traurig, LLP | gtlaw.com 4 Independent Contractor 2015 Case Law Developments Impact of Other Laws on Independent Contractor Statute:  Local Regulation  State Law  Federal Law

Greenberg Traurig, LLP | gtlaw.com 5 TAXI INDUSTRY AND IMPACT OF LOCAL REGULATION Sebago v. Boston Cab Dispatch, Inc. 471 Mass. 321 (2015)  Rule 403: City of Boston taxicab regulations.  Consolidated cases regarding classification of drivers as independent contractors.  Court looked at nature of industry and medallion leaseholder arrangements.  Defendants carry their burden on all three prongs.  Rule 403 does not trump state law (not preemption).  Rule 403 creates a system whereby taxi drivers may operate as employees or as entrepreneurs/independent contractors.

Greenberg Traurig, LLP | gtlaw.com 6 REAL ESTATE INDUSTRY AND IMPACT OF STATE LAW Monell v. Boston Pads, LLC 471 Mass. 566 (2015)  Real estate salespeople filed a class action against several related real estate businesses, arguing that they should have been classified as employees rather than independent contractors.  The defendant real estate companies countered that a real estate specific state law, which allows real estate salespeople to be engaged as independent contractors despite the control and supervision that brokers maintain over salespeople (G.L. c. 112, § 87RR), trumped the independent contractor law.  Court held that the real estate statute prevailed based on rule of statutory construction that a specific statute controls over the provisions of a general statute.

Greenberg Traurig, LLP | gtlaw.com 7 DELIVERY INDUSTRY AND IMPACT OF FEDERAL LAW Massachusetts Delivery Association v. Healy 2015 WL (D. Mass. July 8, 2015)  Request for declaratory relief that “B” Prong of Independent Contractor Law is preempted by Federal Aviation Administration Act which preempts certain state laws relating to motor carriers.  MDA argued that converting independent contractors to drivers does impact “prices, routes and services” regulated by federal law.  In 2014, First Circuit held that Section 148B concerns “transportation of property” and remanded to determine preemption question.  Preemption may be applicable if state law’s impact on “prices, routes, and services” is significant.  District Court holding is that Section 148B has a significant effect on prices, routes and services, thus Prong B is preempted by federal law.

Greenberg Traurig, LLP | gtlaw.com 8 FEDERAL PREEMPTION Schwann v. FedEx Ground Package Sys., Inc WL (D. Mass. Feb. 5, 2015)  In light of First Circuit’s 2014 opinion in MDA Case, District Court allowed summary judgment in favor of defendant.  Prong B is not severable from rest of statute, and “Section 148B is preempted as applied to motor carriers like FedEx.”  Appeal has been filed and is scheduled to be heard in late 2015.

Greenberg Traurig, LLP | gtlaw.com 9 Terence P. McCourt Managing Shareholder Greenberg Traurig, LLP One International Place Boston, MA