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Federal Judge Holds FAAAA Preempts a Critical Portion of the Massachusetts Independent Contractor Law

On July 8, 2015, a federal district court judge held that a section of the Massachusetts Independent Contractor law, as applied to same-day delivery services, is preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA). This is a significant development because Massachusetts has one of the most stringent tests for satisfying independent contractor status in the country.

Massachusetts High Court Rules Real Estate Agents Not Subject to State’s Stringent Independent Contractor Law

On June 3, the Massachusetts Supreme Judicial Court held that the Commonwealth’s independent contractor law does not apply to real estate salespersons licensed under, and affiliated with and working for, a licensed brokerage firm. The court’s ruling in Monell v. Boston Pads, LLC, SJC-11661, although limited in scope, represents a significant victory for the real estate brokerage industry.

Massachusetts Independent Contractor Law Survives Trade Association’s Challenge

The Massachusetts Independent Contractor statute, Mass. G.L. c. 149, § 148B, establishes a rigorous three-part test for determining whether a worker performing services for an employer may be considered an independent contractor, rather than an employee. The U.S. District Court for the District of Massachusetts recently dismissed facial and as-applied challenges to the second prong of this test brought by a nonprofit trade association of delivery service providers. In Massachusetts Delivery Association v. Coakley, No. 10-11521 (September 26, 2013), the Massachusetts Delivery Association (MDA) had argued that the second prong of the test was preempted by the Federal Aviation Administration Authorization Act (FAAAA) because of its effect on labor costs and, therefore, prices. The district court held, however, that because the challenged prong of the test does not relate to the transportation of property and has only a potential effect on prices the FAAAA does not preempt it.
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