Archives for August 2013

Court Dismisses Aiding and Abetting Suit under Independent Contractor Statute

A superior court judge has decided that a third party cannot be sued for “aiding and abetting” a violation of the Massachusetts Independent Contractor statute. Despite decisions by other courts allowing such claims to survive at the pleading stage, Justice Brian Davis ruled that, because the underlying suit against a putative employer was statute-based and did not assert a common law tort cause of action, aiding and abetting liability does not exist.

The August 7, 2013 decision is significant to a broad range of companies that face class action lawsuits for aiding and abetting the alleged misclassification of employees. Floodgates were opened in this area by a federal court’s late-2011 decision denying a defendant’s motion to dismiss a cause of action for aiding and abetting the violation of Mass. Gen. L. ch. 149, s. 148B. That statute indisputably does not provide for such liability. Neither, it plainly appears, does the common law of aiding and abetting, a form of civil conspiracy that requires proof of an underlying tort along with the providing of substantial assistance by the aider/abettor.

The defendant is a New York company that acts as an administrator. It was initially accused of employing drivers who were allegedly misclassified as contractors, but those claims were dropped voluntarily on its motion to dismiss. Despite the fact that all events occurred within what is asserted to be an employment relationship, the defendant remains in the case on a claim it violated the Consumer Protection Act (Mass. Gen. L. ch. 93A, s. 11).

Class Action Waivers Okayed for Employment Disputes

Following a mandate from the U.S. Supreme Court, the Massachusetts Supreme Judicial Court (SJC) has held that a contractual waiver of class action claims in an employment dispute must be enforced. The plaintiffs in the ongoing case are franchisees who claim they serve as employees of the defendants but are misclassified in order to deny them wages and benefits. They seek repayment of tens of thousands in franchise fees along with damages under the Massachusetts Wage Act, a statute that mandates the tripling of all damage awards.

The plaintiffs hoped to obtain class certification, a move that would allow them to join all similarly situated franchisees in their litigation, thus threatening the defendants with multi-million dollar damages. Class action suits are intended to make litigation feasible for individuals who suffer relatively small damages but are part of large groups of people suffering from similar alleged wrongs. As part of their franchise agreements, however, the plaintiffs agreed to mandatory arbitration of all disputes on individual bases. A lower court refused to enforce the arbitration clause and class action waiver, citing Massachusetts public policy. In reversing, the SJC followed  Supreme Court decision holding that class action waivers are enforceable. The SJC concluded that, unless a waiver effectively deprives a plaintiff of the ability to redress complaints, it must be enforced. [Read more…]