Boston taxi drivers are correctly classified as independent contractors, the Massachusetts Supreme Judicial Court ruled last week. However, other users of ICs might still use caution as the court indicated its decision will not likely impact other industries.
The case was Bernard Sebago & Others vs. Boston Cab Dispatch Inc. & Others. Sebago was represented by Boston attorney Shannon Liss-Riordan, who also represented drivers in a misclassification lawsuit against Uber and represents ICs involved in other on-demand platform businesses also known as the “gig economy.”
In the Massachusetts case, Boston taxi drivers had sued Boston cab companies claiming they were misclassified as ICs. The court used a three-prong test to determine IC status, ultimately ruling the IC status was OK. And while good news for Boston taxi firms, the court noted the ruling likely won’t apply to other industries.
“This case may not be a precedent for other industries or even other digital service providers operating in other cities or states due to its particular set of facts. However the judgement does provide a useful indication of what those types of businesses need to do to ensure they are not misclassifying their workers. U.S. District Judge Vince Chhabria, who is overseeing the Lyft case, has said that existing labor law doesn’t map well with these companies’ business models. That may mean that to fit within the existing law, some companies may need to revise their business model.”
“The plaintiffs speculate that our decision today will provide incentives for businesses in other industries to deconstruct their operations into component parts to avoid the strictures of the Wage Act,” according to court records. “This concern is not warranted. Our cases are clear that employers may not circumvent the Wage Act or other laws affecting employee compensation by creating illusory distinctions in the services they provide.”
For more on this case, see this commentary by Morgan, Brown & Joy LLP.