Timothy P. Chambers et al. Individually and on Behalf of a Class of Persons Similarly Situated
RDI Logistics, Inc. et al Opinion No. 132341
MEMORANDUM OF DECISION ON PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT
Richard T. Moses, Justice
The present action is before the court in connection with the First Amended Class Action Complaint filed on October 22, 2013, by the plaintiffs, Timothy P. Chambers (" Chambers") and Leroy Johnson (" Johnson"), collectively referred to as the " plaintiffs, " against the defendants, RDI Logistics, Inc. (" RDI") and Richard J. Deslongchamps, Jr. (" Deslongchamps"). In its amended complaint, plaintiffs claim to have been misclassified by RDI as independent contractors, rather than employees, in violation of G.L.c. 149, § 148B. They have filed this action pursuant to G.L.c. 149, § 150, claiming that they have been deprived of wages to which they are legally entitled. Also, plaintiffs assert a claim for unlawful retaliation in violation of G.L.c. 149, § 148A, and a claim of unjust enrichment purportedly based upon the misclassification of the plaintiffs.
The defendants deny any misclassification of the plaintiffs, and have filed a counterclaim against Johnson alleging that any claim which he has asserted is barred by a release executed by him.
The plaintiffs have moved for partial summary judgment under G.L.c. 149, § 148B, seeking a ruling that they are employees of the defendants, RDI and Deslongchamps, for the purposes of the Massachusetts Wage Act. Defendants have filed an opposition to the aforesaid motion seeking denial of the same, and entry of summary judgment in defendants' favor, claiming that the application of the Massachusetts Wage Act is preempted by the Federal Aviation Administration Authorization Act of 1994 (The " FAAAA"), 49 U.S.C. § 14501. Further, RDI asserts that the provisions of the Massachusetts Wage Act do not apply italic circumstances in the case at bar in that the plaintiffs operated through legitimate business entities, and further, that even were the Massachusetts Wage Act to apply, the plaintiffs have not established the absence of genuine issues of material fact as to whether they were misclassified. Lastly, it is asserted that the plaintiffs have failed to demonstrate any misclassification resulted in a violation of any of the statutes enumerated in section 148B, and have failed to demonstrate that any damage was suffered on account of any violation.
The parties appeared before the court on June 2, 2015, for argument, and the matter was taken under advisement.
Thereafter, defendants filed with the court their " Notice of Supplemental Authorities" providing additional authorities on their claim of preemption under the FAAAA.
On July 22, 2015, plaintiffs filed a response to the aforesaid Notice of Supplemental Authorities, and on August 31, 2015, filed Plaintiffs' Notice of Supplemental Authority in Opposition to RDI's Motion for Summary Judgment, once again addressing the applicability of the FAAAA.
Finally, on October 2, 2015, plaintiffs filed an additional notice of supplemental authority in opposition to RDI's motion for summary judgment once again addressing case law pertaining to the applicability of the FAAAA.
For the reasons hereinafter stated, the plaintiffs' motion for partial summary judgment must be denied, and the motion for summary judgment of RDI and Deslongchamps must be allowed.
The following undisputed material facts are taken from the summary judgment record.
In 1987, Deslongchamps founded RDI. RDI is a motor carrier registered with the Federal Motor Carrier Safety Administration, and regulated by the United States Department of Transportation (" DOT").
RDI has many years of operating experience in operating an independent delivery service which has grown into a successful business providing to its customers professionally managed logistics services throughout New England and other areas in the United States.
Over the years, RDI has developed a successful business model, pursuant to which it provides so-called " last mile" delivery services to its customers, which are principally furniture companies, and include Jordan's Furniture, Boston Interiors and Mattress Giant.
RDI's business model requires that any agreement with third-party truckers to deliver furniture to any of RDI's customers be with corporately operated businesses.
Each entity is required to execute a contract with RDI entitled " Independent Truckman's Agreement" (" ITA").
The circumstances surrounding both Chambers' and Johnson's dealing with RDI are somewhat similar. A different trucking company had previously serviced Boston Interiors in connection with delivery of furniture to its customers. Johnson had previously worked for that company, during which time it lost its contract with Boston Interiors, which was then taken over by RDI.
This circumstance then prompted Johnson and his then partner, Daryl McConaga (" McConaga") to approach RDI to obtain work.
They proceeded to form Dee & Lee, LLC on August 21, 2007, which thereafter entered into an ITA with RDI.
Chambers began his dealings with RDI in 2009. He had previously performed delivery services for approximately fifteen years. He was made aware that RDI would only do business with other businesses, which would act as independent contractors and maintain their own employees. As a result he caused a Subchapter S corporation, Three T& C Transport, Inc. (" Three T& C"), to be formed and designated himself as president of said entity.
On September 20, 2009, Chambers executed an ITA as president and CEO of Three T& C. Also on September 20, 2009, both Johnson and McConaga executed an ITA on behalf of Dee & Lee, as co-owners. The ITAs mirror each other, with the exception that the ITA pertaining to Three T& C requires that the contractor deliver consumer items from the retail establishment of Jordan's Furniture to the residences of Jordan's customers.
The ITA executed on behalf of Dee & Lee provides that consumer items from the retail establishment of Boston Interiors in Stoughton, be delivered to the residences of Boston Interiors' customers.
Each of the ITAs provides that it shall be for a three-year duration subject to earlier termination in accordance with the terms of contract. The contractor is required to provide its own manned vehicles and pay all costs of ownership, operation, and maintenance of the same.
Paragraph six of each ITA requires that the contractor provide at its own expense employer's liability insurance, workers' compensation insurance, or an approved occupational accident plan. It further requires the contractor to pay all wages and social security and withholding taxes as to its employees.
Paragraph nine of each ITA is entitled " Control and Exclusive Use, " and provides:
In performing services under this agreement the Contractor will direct the operation of his equipment in all respects and will determine the means of performance including, but not limited to, such matters as choice of routes, points of service of equipment and rest stops. RDI shall have no rights to direct or control Contractor in this regard. The parties intend to create and [ sic ] independent contractor relationship and not an employer-employee relationship.
Paragraph twelve of which is entitled " Nonsolicitation, " precludes the contractor, while performing services under the agreement, or within three (3) years after its termination, from soliciting any of RDI's employees, customers, or suppliers.
Both Three T& C and Dee & Lee chose to rent delivery vehicles from RDI, which bore RDI's logo and, in the case of Three T& C, the logo of Jordan's Furniture, and with respect to Dee & Lee, the logo of Boston Interiors. Said vehicles were owned by RDI, and hence, operated under RDI's DOT number. RDI did not require the leasing of its vehicles by its contractors, and both Chambers and Johnson, as principals of their respective entities, chose not to purchase their own trucks with their own DOT numbers. As of 2015, RDI does business with approximately eighty contractors, thirty-nine of whom use their own United States DOT number. Furthermore, there is no prohibition on any of RDI's contractors from running multiple trucks.
Relatively strict guidelines are required to be followed in connection with delivery services, including such matters as to when the customer's loading docks are open, the wearing of uniforms when required by the customer, general appearance of the contractor's employees, and certain safety procedures. Also, in light of the fact that entities such as Jordan's Furniture, Boston Interiors, and Mattress Giant were required to provide their customers with a window of time for furniture delivery, the window for such deliveries was passed on to contractors, and hence, the trucks would be typically loaded with the last delivery to be loaded first, and the first delivery to be loaded last. Each of the trucks was equipped with a GPS in order that RDI could be aware of their location in the event a question arose as to the status of deliveries.
The evidence reveals that until Dee & Lee ceased its relationship with RDI, it continued to file necessary corporate tax returns. obtain liability insurance, and workers' compensation insurance for helpers. Principals such as Johnson and Chambers procured occupational accident plans in lieu of workers' compensation insurance covering themselves while under dispatch and on duty.
Furthermore, income tax returns for the respective entities reflect the 1099 income received from RDI. The plaintiffs were free to hire helpers for their deliveries and did so on multiple occasions.
While the plaintiffs challenge whether or not their respective entities were permitted to do work for other companies, it is clear that in 2011, Three T& C did, on at least one occasion, work for another company in addition to RDI.
By affidavit, Johnson asserts that in making deliveries, he typically worked from 5:00 a.m. to 6:00 p.m., Tuesdays through Saturdays. He also describes certain schedules from 2007 to December 2011 ...