U.S. Appeals Court Finds that Massachusetts’ Independent Contractor Statute Could be Precluded by Federal Law

In  a decision that could have broad implications for enforcement of Massachusetts’ tough employee classification law, the U.S. Court of Appeals has concluded that federal law just might make it null and void, at least as it applies to motor carriers. The problem, the court held, is that one of three tests under Mass. Gen. L. ch 149, s. 148B may infringe upon the federal government’s superior authority to regulate interstate commerce.

Relying on the FAAAA (Federal Aviation Administration Authorization Act),  a federal law that bars Massachusetts and other states from regulating the prices, routes or services offered by motor carriers, the Court of Appeals reversed a lower court’s award of judgment to the Massachusetts Attorney General. The AG is defending a suit brought by the Massachusetts Delivery Association, which argues that broad language in the Massachusetts Independent Contractor Statute  effectively bans courier companies from engaging delivery drivers as contractors. Same day delivery companies are being forced to hire drivers as employees, they argue. The result is higher prices and different routes and other services.

There can be little doubt that same day courier companies have been under fire in recent years because of the Independent Contractor Statute. Many of them have faced class action lawsuits that claim their contracted drivers are misclassified. Demands for damages have been in the millions of dollars, and some courier companies have changed their business models as a result.