New England Survey Systems, Inc.
Department of Industrial Accidents
December 8, 2015
action commenced in the Superior Court Department on April
case was heard by Frances A. McIntyre, J., on a motion for
judgment on the pleadings.
Timothy K. Cutler for the plaintiff.
Douglas S. Martland, Assistant Attorney General, for the
Grainger, Hanlon, & Agnes, JJ.
N.E.3d 676] Agnes, J.
Workers' Compensation Act, G. L. c. 152 (act), provides
that whenever the Commissioner of the Department of
Industrial Accidents (the department) determines that an
employer has not provided the insurance required by
law, " a stop work order shall be
served on said employer, requiring the
cessation of all business operations at the place of
employment or job site." G. L. c. 152, § 25C(1), as
amended through St. 1989, c. 341, § 82. The stop work
order takes effect upon service on the employer, and remains
in effect until the employer satisfies the commissioner [53
N.E.3d 677] that it has obtained the required insurance and
paid the $100 per day civil penalty for each day it was in
violation of the law, beginning with the date of service of
the order. Ibid. Section 25C also provides for
additional civil and criminal penalties against employers who
do not obtain the insurance required by law. See G. L. c.
152, § 25C(5)-(6), (9)-(11). Subsection (10) of §
25C sets forth one of the additional civil penalties that an
employer who fails to obtain the insurance required by the
act may face. It states:
" In addition to being subject to the civil penalties
herein provided, an employer who fails to provide for
insurance or self insurance as required by this chapter or
knowingly misclassifies employees, to avoid higher premium
rates, will be immediately debarred from bidding or
participating in any state or municipal funded contracts for
a period of three years and shall when applicable be subject
to penalties provided for in section fourteen" (emphasis
G. L. c. 152, § 25C(10). The issue before us, which is
one of first impression, is whether the phrase " to
avoid higher premium rates," as it appears in subsection
(10), modifies the two preceding clauses (" who fails to
provide for insurance or self insurance as required by this
chapter or knowingly misclassifies employees" ) or
modifies only the immediately preceding clause ("
knowingly misclassifies employees" ).
plaintiff, New England Survey Systems, Inc. (NESS), contends
that the placement of the comma after the word "
employees" means that the phrase " to avoid higher
premium rates," modifies the two preceding clauses with
the effect that an employer like NESS -- against whom a stop
work order issued due to its failure to have the insurance
required by law, but who was not shown to have acted with the
intent to avoid higher insurance premiums -- is not subject
to automatic debarment. In essence, NESS claims that prior to
implementing the penalty of debarment, the department was
required to prove that NESS's admitted
failure to provide insurance was motivated by a desire to
avoid higher premium rates. The department, on the other
hand, asserts that under § 25C(10), debarment occurs
whenever a stop work order issues against an employer who
failed to obtain or provide the required insurance,
regardless of the employer's intent or motivation. While
we agree with NESS that the penalty of debarment for three
years is a severe sanction, we do not agree with its reading
of subsection (10). Instead, we conclude that the words used
by the Legislature express its intention that the debarment
provision contained in subsection (10) applies when an
employer fails to obtain or provide workers' compensation
insurance, without the need to establish that this was the
result of the employer's intent to avoid higher insurance
premiums. Accordingly, we affirm the ruling made by the
Superior Court judge which, in turn, is consistent with the
interpretation followed by the department.
N.E.3d 678] 1. Background.
Stop work order and debarment.
December 28, 2012, an investigator with the department was
working in the Brookline area and came upon NESS's place
of business. The investigator queried the Workers'
Compensation Rating and Inspection Bureau's computer
system and discovered that NESS had a canceled workers'
compensation insurance policy. The investigator issued NESS a
stop work order pursuant to G. L. c. 152, § 25C.
NESS's president, John Roberge, who maintained he was
unaware that the policy had lapsed, contacted its insurance
provider that day, and the provider reinstated coverage
immediately. The department nevertheless maintained
was automatic and nondiscretionary under § 25C(10).
filed an administrative appeal from the debarment
order. The department held an appeal hearing
on January 16, 2013, and issued a written decision upholding
the stop work order and debarment penalty on March 29, 2013.
NESS filed a further appeal in the Superior Court under G. L.
c. 30A, § 14. NESS moved for judgment on the pleadings,
and the department filed an opposition. On July 15, 2014,
after hearing, a Superior Court judge issued a memorandum and
order affirming the department's decision. Judgment
entered for the department on October 20, 2014, and this
Applicable principles ...