Sebago v. Boston Cab Dispatch, Inc.
471 Mass. 321
| Mass. | 2015Background
- Boston Police Commissioner promulgated Rule 403 (2008) under a 1930 legislative delegation to comprehensively regulate Boston taxicabs (medallions, leasing, radio dispatch, fares, driver rules).
- Rule 403 contemplates multiple business models (owner-operator, leased, shifted, managed) and requires standardized shift-lease agreements that include an optional "Independent Contractor" clause.
- Plaintiffs (licensed Boston taxi drivers) leased medallions/taxis at flat rates and alleged they were misclassified as independent contractors, bringing Wage Act, minimum wage, overtime, and tips claims.
- Defendants include medallion owners, radio associations, and a garage; they argued Rule 403 contemplates independent-contractor relationships and that plaintiffs are independent contractors under G. L. c. 149, § 148B.
- The Superior Court denied summary judgment for defendants on misclassification; the SJC reviewed whether Rule 403 conflicts with the independent contractor statute and applied the three-prong test in § 148B.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does G. L. c. 149, § 148B apply to Boston taxicab drivers or is Rule 403 controlling? | Rule 403 cannot override the State independent-contractor statute; drivers should be deemed employees if statutory criteria met. | Rule 403 creates a separate regulatory business structure (leasing, dispatch, driving) and permits drivers to be independent contractors; statute does not preempt the regulation. | § 148B applies; Rule 403 does not conflict with it and may be harmonized with the statute. |
| Did plaintiffs provide a "service" to each defendant group (medallion owners, radio associations, garage)? | Drivers' operation makes medallions/taxis valuable; thus they provide services to owners/radio associations. | Drivers leased vehicles and were generally independent; radios and owners run distinct businesses; garage received no services from plaintiffs. | Plaintiffs provided services to radio associations (voucher processing) and arguably to medallion owners incidentally, but not to the garage; summary judgment for the garage was proper. |
| Under § 148B prong (1) were drivers free from control/direction? | Plaintiffs point to regulation and rules governing drivers as indicia of control. | Defendants emphasize lease autonomy: drivers select shifts, can decline dispatches, and operate independently in practice. | Defendants met prong (1): drivers were generally free from control/direction despite regulatory rules. |
| Under § 148B prongs (2) and (3) were services outside defendants' usual business and were drivers independently established businesses? | Plaintiffs: transporting passengers is central to taxi-related businesses (owners/radios) so services are within usual course and drivers dependent. | Defendants: leasing and dispatching are distinct businesses under Rule 403; drivers operate entrepreneurial businesses, may lease from different owners and dispatchers. | Defendants met prongs (2) and (3): transportation for fares is incidental to owners' and radio associations' regulated businesses; drivers were customarily engaged in independent business. |
Key Cases Cited
- Somers v. Converged Access, Inc., 454 Mass. 582 (2009) (describing § 148B framework and presumption of employment)
- Depianti v. Jan-Pro Franchising Int'l, Inc., 465 Mass. 607 (2013) (explaining § 148B and limits on arrangements that evade wage laws)
- Boston Gas Co. v. Somerville, 420 Mass. 702 (1995) (municipal regulations cannot conflict with state law)
- Athol Daily News v. Board of Review, 439 Mass. 171 (2003) (employer's business definition relevant to "usual course" analysis)
- Awuah v. Coverall N. Am., Inc., 460 Mass. 484 (2011) (payments required for the right to work violate public policy)
- Weinfield's, Inc. v. Commonwealth, 305 Mass. 108 (1940) (contract form does not necessarily control classification)
- Commissioner of Div. of Unemployment Assistance v. Town Taxi of Cape Cod, Inc., 68 Mass. App. Ct. 426 (2007) (flat-lease taxi drivers not employees for unemployment insurance; factors indicating independence)