Court Sees Haven for Delivery Company that Uses Independent Contractors

Pointing out that “legitimate business-to-business relationships” are not barred by the Massachusetts Independent Contractor statute, a superior court judge held recently that a delivery company would not be liable for damages under the law if the contractors it uses to make deliveries in fact operate their own delivery businesses.

In typical fashion, the plaintiff’s class action counsel argued at summary judgment in the case Okeke v. Dynamex Operations East, Inc. that drivers who make deliveries for the company must be considered employees under a portion of Mass. Gen. L. ch. 149, s. 148B, the Massachusetts Independent Contractor statute. The law holds that workers who perform duties within the usual course of business of the entity they work for are employees and not contractors as a matter of law. While the argument has frequently persuaded courts in the past, it did not in the Okeke case, in which the judge cited evidence that some drivers operated businesses and employed as many as 17 others to make deliveries for Dynamex.

“Were the plaintiffs’ interpretation of section 148B to prevail, no corporation operating in the Commonwealth could contract with another corporation to perform work in the same field. Under the plaintiffs’ view, the latter courporation would be an employee of the former, because its services would be provided in the former corporation’s usual course of business,” the court wrote.

The decision seems to turn on particular facts that may not exist in all cases. The use of independent contractors to perform delivieries is common in the delivery business. The simple formation of a corporate entity to nominally “employ” a driver and receive his/her pay is likely not enough to defeat application of the Independent Contractor statute. Where as in Okeke a contractor employs numerous drivers himself, however, the situation may be different as long, at least, as the employer properly pays workers under applicable wage and other laws.