Gallagher v. Cerebral Palsy of Massachusetts, Inc.
AC 16-P-1152
| Mass. App. Ct. | Sep 13, 2017Background
- Susan Gallagher worked as a personal care attendant (PCA) providing in-home services to a MassHealth consumer beginning in 2006 and sometimes worked over 40 hours/week without overtime pay.
- CPM (Cerebral Palsy of Massachusetts) contracted with the Executive Office of Health and Human Services to serve as a MassHealth "fiscal intermediary": issuing paychecks, preparing payroll, handling certain tax and unemployment filings, and forwarding MassHealth approvals of authorized hours.
- Gallagher signed forms (including an acknowledgment that the consumer was her employer, W-4, I-9); CPM issued W-2s "FBO [the consumer]."
- Gallagher sued CPM under the Massachusetts Wage Act and overtime statute alleging CPM was her employer and failed to pay overtime; CPM moved to dismiss and relied on the MassHealth regulatory framework.
- The trial judge treated (in effect) the motion as one for summary judgment based on the regulations and a CPM contract; the Appeals Court likewise reviewed de novo and affirmed dismissal, holding Gallagher did not provide services to CPM and thus CPM was not her employer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CPM was Gallagher's employer under G. L. c. 149 (Wage Act) and G. L. c. 151 (overtime) | Gallagher argued CPM functioned as her employer (and failed to pay overtime) and common-law control factors support employment | CPM argued MassHealth regulations and its fiscal-intermediary role show PCAs provide services to consumers, not to CPM | CPM was not Gallagher's employer; regulations show PCAs provide services to consumers, so dismissal affirmed |
| Whether MassHealth regulations displace common-law employer/independent-contractor test | Gallagher relied on common-law control factors to characterize employer status | CPM and the court relied on G. L. c. 149, § 148B and detailed MassHealth regulations governing PCA/fiscal-intermediary roles | The statutory/regulatory framework governs; courts apply § 148B threshold (did plaintiff provide services to defendant) and here regulations show she did not provide services to CPM |
| Whether CPM was a joint employer of Gallagher | Gallagher argued CPM exercised sufficient control or shared employment obligations | CPM argued it lacked the right to control PCA duties and only performed administrative/payroll tasks under regulation | Joint-employer theory fails: CPM had no right to control PCA work and did not satisfy joint-employer criteria |
Key Cases Cited
- Doucette v. Massachusetts Parole Bd., 86 Mass. App. Ct. 531 (2014) (treating motion as summary judgment when court relied on materials outside complaint)
- Marram v. Kobrick Offshore Fund, Ltd., 442 Mass. 43 (2004) (parties may brief extrinsic material and court may consider it on appeal)
- Sebago v. Boston Cab Dispatch, Inc., 471 Mass. 321 (2015) (statutory two-step test under G. L. c. 149, § 148B: did plaintiff provide services to defendant; if so, presumption of employment and three-part independent-contractor rebuttal)
- Peters v. Haymarket Leasing, Inc., 64 Mass. App. Ct. 767 (2005) (common-law right-to-control factors for employment inquiries)
- Griswold v. Director of the Div. of Employment Security, 315 Mass. 371 (1944) (employment relationship tests at common law)
- Commodore v. Genesis Health Ventures, Inc., 63 Mass. App. Ct. 57 (2005) (definition and standards for joint-employer status)