Chambers v. RDI Logistics, Inc., SJC–12080.

• Decision Date: 16 December 2016
• Docket Number: SJC–12080.
• Citation: 476 Mass. 95,65 N.E.3d 1
• Parties: Timothy P. CHAMBERS& another v. RDI LOGISTICS, INC., & another ; Dee & Lee, LLC, & another,third-party defendants.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

476 Mass. 95
65 N.E.3d 1

Timothy P. CHAMBERS¹ & another²
v.
RDI LOGISTICS, INC., & another ;³

Dee & Lee, LLC, & another,⁴ third-party defendants.

SJC–12080.

Supreme Judicial Court of Massachusetts, Bristol.

Argued Oct. 5, 2016.
Decided Dec. 16, 2016.

65 N.E.3d 4

Harold L. Lichten (Peter M. Delano, Boston, with him) for the plaintiffs.

Michael T. Grant (Andrew J. Fay with him), Boston, for the defendants.

Present: GANTS, C.J., BOTSFORD, LENK, HINES, GAZIANO, LOWY, & BUDD, JJ.

LENK, J.

476 Mass. 96

We are called upon in this case chiefly to consider whether G.L. c. 149, § 148B, the independent contractor statute, is preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA), 49 U.S.C. § 14501(c). The plaintiffs, who contracted with the defendants through small corporations that the plaintiffs apparently formed for this purpose, performed services in Massachusetts as furniture delivery drivers. They brought this putative class action against the defendants under the independent contractor statute, asserting that they had been misclassified as independent contractors. Following the addition of other claims and counterclaims, summary judgment entered for the defendants dismissing the plaintiffs' claims on the ground that they were preempted by the Federal statute.

We conclude that, while a portion of the independent contractor statute is preempted by the FAAAA, the remainder is severable and remains applicable to the plaintiffs' misclassification claim. Nor is summary judgment dismissing that claim warranted on the separately asserted basis that the plaintiffs lack standing as individuals to assert claims for misclassification under the statute. Material issues of disputed fact preclude the entry of summary

65 N.E.3d 5

judgment on either basis. We conclude similarly that the dismissal, without explanation, of the claim of retaliation that Timothy Chambers individually asserts under G.L. c. 149, § 148A, was improper.

Finally, we review the denial of the plaintiffs' request for a protective order, brought in the wake of the defendants' communications with putative class members in which they were offered payments in exchange for signed releases. While discerning no abuse of discretion requiring reversal in these circumstances, we acknowledge the legitimate concerns raised by such communications and the authority of a judge to enter appropriate protective orders when necessary.

1. Background. Since this case concerns a grant of summary judgment, we "summarize the relevant facts in the light most favorable to the plaintiff [s]." Somers v. Converged Access, Inc., 454 Mass. 582, 584, 911 N.E.2d 739 (2009). RDI Logistics, Inc. (RDI), is a furniture delivery company headquartered in South Easton. Richard

476 Mass. 97

Deslongchamps, Jr., is the founder and president of RDI. The company provides "last mile" delivery services for large retail furniture companies.⁵ The plaintiffs delivered furniture for RDI for several years on a full-time basis, working approximately sixty hours per week over five or six days. Since RDI only does business with independent business entities, the plaintiffs incorporated prior to entering into contracts with RDI.⁶ The contracts contained both nonsolicitation and noncompete clauses, which effectively prevented the plaintiffs from performing any delivery work for RDI's competitors during their tenure with the company and for three years thereafter.

RDI's managers informed the plaintiffs that their contracts would be terminated if they worked for any company other than RDI. The company also required the plaintiffs to wear uniforms and to display signs on their trucks bearing either RDI's logo or the logos of RDI's customers. RDI deducted from the plaintiffs' pay the costs of uniforms, truck lease payments, and damage allegedly done to customers' property in the course of their deliveries. RDI also regulated how the plaintiffs loaded the furniture on their trucks, which customers they delivered to, and the specific windows of time in which they were to deliver their goods to customers. Finally, RDI required that the plaintiffs follow prescribed routes to reach their customers and use global positioning system devices to ensure that the plaintiffs did not deviate from their assigned routes.

After approximately four years of service, RDI terminated its contract with Johnson's company in December, 2011, under disputed circumstances.⁷ During the summer of 2013, Chambers informed his fellow drivers at RDI that he suspected that RDI was misclassifying them as independent contractors rather than as employees. In August, 2013, RDI informed Chambers that his contract was subject to a sixty-day review period.⁸ On the evening

476 Mass. 98

65 N.E.3d 6

of September 18, 2013, Deslongchamps confronted Chambers and accused him of attempting to file a lawsuit under the independent contractor statute. After a brief argument, Deslongchamps fired Chambers.

Two days later, the plaintiffs filed a class action complaint against RDI and Deslongchamps, individually, alleging misclassification. In October, 2013, they filed an amended complaint, adding a claim for unjust enrichment stemming from the purported misclassification, as well as an individual claim on behalf of Chambers alleging retaliation under G.L. c. 149, § 148A. The defendants asserted two counterclaims for breach of contract against Johnson, maintaining that he had violated a release of claims against RDI that he signed upon his termination. They also filed a third-party complaint against the plaintiffs' respective corporations, asserting that the contracts between those corporations and RDI indemnified RDI against any damages resulting from the plaintiffs' claims.

In July of 2014, the parties engaged in an unsuccessful mediation effort. Three months later, as discovery was underway, RDI sent a series of letters on an ex parte basis to certain current and former RDI contractors. Each letter contained a check for $1,000 that would, if endorsed, purportedly release all claims against RDI. The two-page letters, in essence, stated that two individuals had filed a class action complaint against RDI in which they claimed that they were misclassified as independent contractors. The letters, which contained the Superior Court case caption, noted that although "RDI believes firmly that it has not acted improperly with regard" to its classification of its workers, it would offer "a one-time payment in exchange for a release" of any claims relating, inter alia, to the classification of those workers.

On learning of these letters, the plaintiffs sought an emergency protective order barring RDI from engaging in further communications with "putative class members." They asked the judge to strike "any alleged settlements obtained as the result of the letters and checks" that had been mailed. The motion was denied. A few months later, the plaintiffs filed a motion for reconsideration of their emergency motion, claiming that an RDI driver had informed the plaintiffs' counsel that he and his fellow drivers feared they would lose their contracts with RDI if they did not endorse the checks. The judge denied that motion. The plaintiffs sought interlocutory review before a single justice of the Appeals Court, which also was denied.

476 Mass. 99

Two weeks later, the plaintiffs moved for partial summary judgment on their misclassification claim. In response, the defendants filed a cross motion for summary judgment on all of the plaintiffs' claims, along with their claims against Johnson and the plaintiffs' companies. The judge denied the plaintiffs' motion and allowed the defendants' motion on the ground that the FAAAA preempted the independent contractor statute in its entirety.⁹ THE PLAINTIFFS' COmplaint was dismissed, along with the defendant's claims against Johnson and the plaintiffs' companies.¹⁰ We allowed the plaintiffs' application for direct appellate review.

65 N.E.3d 7

2. Discussion. a. Summary judgment. The defendants claim that they are entitled to judgment as a matter of law on all of the plaintiffs' claims. They contend that the plaintiffs' misclassification claim fails for two reasons. First, they suggest that the statute is preempted by the FAAAA. Second, they argue that the plaintiffs do not have standing under the independent contractor statute because their contracts with RDI were through corporate entities. The defendants also suggest that Chambers' retaliation claim fails because he does not have standing unless he proves that he is an employee.

i. Standard of review. "We review a grant of summary judgment de novo to determine ‘whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as a matter of law.’ " DeWolfe v. Hingham Centre, Ltd., 464 Mass. 795, 799, 985 N.E.2d 1187 (2013), quoting Juliano v. Simpson, 461...