First Circuit Revives Industry Group's Challenge to Massachusetts Independent Contractor Statute

A recent ruling from the First Circuit Court of Appeals captioned Massachusetts Delivery Association v. Coakley has important implications for industry groups representing employers that find themselves embattled in wage and hour litigation regarding widespread industry practices.  In overturning a ruling from the U.S. District Court for the District of Massachusetts, the First Circuit held that an industry group’s challenge to the enforcement of the Massachusetts Independent Contractor Statute must proceed, notwithstanding the fact that several members of the industry group were defendants in litigation regarding the statute in the state courts.

The Massachusetts Delivery Association (“MDA”) is a non-profit trade organization composed of more than 40 members engaged in the business of providing same-day delivery services, many of which retain the services of independent contractors to make deliveries.  Following a wave of litigation challenging the classification of the delivery drivers as independent contractors under Massachusetts law, the MDA filed a lawsuit seeking to enjoin the Massachusetts Attorney General from enforcing the Massachusetts Independent Contractor Statute in the delivery services industry.  The statute mandates that “an individual performing any service . . . shall be considered an employee” unless, among other requirements, the “service is performed outside the usual course of business of the employer.”  See Mass. Gen. Laws ch. 149, § 148B.  The MDA argued that this stringent requirement, not imposed by any other state, would require its members to change their fundamental business models, drive up costs, and adversely affect prices, routes and services.  For these reasons, the MDA argued that any application of the statute to companies in the delivery services industry was subject to the preemption provisions of a particular federal statute and imposed a constitutionally impermissible burden on interstate commerce.

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