Massachusetts employers who utilize the services of independent contractors do so at their own peril. That's because Massachusetts uses the "ABC test" to determine whether someone is truly an independent contractor, a test that heavily disfavors a finding of independent contractor status. (M.G.L. c. 149, §§. 148B, 150). This means that most employers will ultimately lose if their classification of someone as an independent contractor is challenged. On January 23, 2020, the Massachusetts Court of Appeals made it even more difficult to defend a classification of someone as an independent contractor in the case of Weiss v. Loomis, Sayles & Company, Inc.

Loomis is a financial services company that contracted with Joel Weiss, through Mr. Weiss's company, to provide engineering services. Loomis and Mr. Weiss's company entered into an independent contractor agreement that stated Mr. Weiss was an independent contractor. Mr. Weiss worked for Loomis for a number of years, with Loomis ultimately terminating the relationship in September 2013. Mr. Weiss filed suit claiming that he was really an employee and that Loomis had misclassified him as an independent contractor.

This dispute went to trial, with the trial judge eventually deciding that Mr. Weiss, as a matter of law, was an independent contractor. Mr. Weiss appealed that decision, which lead to the decision of the court of appeals.

The court of appeals reversed the trial court's decision, finding that sufficient evidence existed from which a jury could have found in favor of Mr. Weiss on each of the three prongs of the ABC independent contractor test. Read the opinion here. In doing so, the court provided the following helpful guidance on how these prongs are to be applied. Importantly, before doing so, the court rejected Loomis’s argument that Mr. Weiss could not sue in his individual capacity because the agreement was between Loomis and his company, not him individually.

Prong 1 of the Massachusetts Independent Contractor “ABC Test”: Freedom from Direction and Control.

The court found that the following facts showed that Loomis controlled and directed Mr. Weiss, which suggested Mr. Weiss was an employee, not an independent contractor: (1) Loomis restricted Mr. Weiss's ability to perform work for others, (2) Loomis supervisors interviewed Mr. Weiss, (3) Loomis supervisors gave Mr. Weiss assignments and direction and supervised his performance, (4) Mr. Weiss attended meetings at which progress and issues were discussed, (5) Loomis supervisors and Mr. Weiss frequently communicated and discussed the technical details of the project, (6) Loomis provided Mr. Weiss with a workstation, supplies, and equipment, (7) Mr. Weiss was required to submit time reports for approval in order to get paid, (8) Loomis paid Mr. Weiss by the hour, not by the project, and (9) Loomis terminated Mr. Weiss at will and without reason.

Prong 2 of the Massachusetts Independent Contractor “ABC Test”: Usual Course of Business.

The court found that the following facts showed that the services provided by Mr. Weiss were within Loomis's usual course of business, which suggested Mr. Weiss was an employee, not an independent contractor: (1) Loomis maintained a large technology group in furtherance of its service of managing and investing money for clients, (2) Loomis staffed that department with a large number of independent contractors, (3) the contractors worked year-round and full-time, (4) there was intermingling in the technology group between contractors and employees, (5) Loomis publicly advertised the vital role played by the technology group in the success of its business, and (6) Loomis included the services performed by Mr. Weiss and the contractors when touting the success of the technology group.

Prong 3 of the Massachusetts Independent Contractor “ABC Test”: Independently Established Business.

Here, the court noted that the critical inquiry is whether Mr. Weiss was capable of performing the services to anyone he wished, or whether the nature of the business compelled him to depend on a single employer for the continuation of his services. Here, the court focused on the restriction in the agreement between Loomis and Mr. Weiss that stated Mr. Weiss was only free to work for others “so long as his actions did not impair his ability to perform his services to Loomis.” This restriction suggested Mr. Weiss was an employee, not an independent contractor.

As a Massachusetts employment attorney, Ben Steffans has represented numerous independent contractors in misclassification claims and has successfully recovered large amounts of money on their behalf, both on an individual and class action basis. If you are an independent contractor in Massachusetts with questions regarding whether you should be classified as an independent contractor or as an employee call us today for your free consultation.