Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 151 Decisions interpreting the meaning of “usual course of business” under the second prong of the Independent Contractor Statute reflect the complex and fact-intensive nature of the issue. For example, the Appeals Court held that a software engineer could be found by a jury to perform services within the usual course of business of a financial services company that managed and invested client funds because the company “publically advertised the vital role played” by technology workers such as the plaintiff to the success of its business. 886 Another court held under the facts of one case that the services of delivery drivers were within the “usual course of business” of a delivery company. 887 In reaching that conclusion, the court gave deference to the Attorney General’s interpretation of “usual course of business” in the 148B Advisory and also focused on the manner in which the company held itself out to the public. 888 By contrast, in another case decided in the District of Massachusetts, the court held that an insurance agent who sold insurance products performed services outside the “usual course of business” of an insurance company with a primary business function of structuring and drafting insurance products. 889 The court drew a distinction between the creation or “manufacture” of insurance products and the sale of those products, concluding that although sales are a critical function to any manufacturing business, that does not make sales the usual course of a manufacturer’s business under the Independent Contractor Statute. 890 Even within particular industries there have been mixed decisions regarding the “usual course of business” prong. 891 Because Massachusetts courts have interpreted the “usual course of business” prong of the Independent Contractor Statute in only a limited number of cases, employers may look to other bodies of law assessing the application of the second prong of the ABC test. 892 In a case interpreting the Massachusetts Unemployment Statute, which uses the same “usual course of business” phrase, the SJC held that the services of news carriers were not outside the usual course of a newspaper publisher’s business because distributing a daily newspaper occurred in the usual course of the employer’s business—and that encompassed its news carriers’ task of delivering papers along their routes. 893 Similarly, when an auto detailing business hired individuals to 886 Weiss , 97 Mass. App. Ct . at 9-10. 887 Martins v. 3PD, Inc. , 2013 U.S. Dist . LEXIS 45753, at *40-48 (D. Mass. Mar. 28, 2013). 888 Id . at 40-43 (holding that the company hired deliver drivers “ for a vital and necessary aspect of the business” and “held it self out as a deliver company” through it s advert ising and market ingmaterials, such as it s website). 889 Ruggierro v. Am. United Life Ins. Co. , 137 F. Supp. 3d 104, 118 (D. Mass. 2015) (stat ing “ I agree with the defendant s that providing informat ion about and fashioning a product one manufactures is not the same as being in the business of direct ly selling it .”). 890 Id . at 119; see also Valle v. Powertech Indus. Co., Ltd. , 381 F. Supp. 3d 151, 167 (D. Mass. 2019) (dist inguishing Ruggiero and holding that the plaint iff salesman performed services in the usual course of the defendant manufacturing company’s business, because the defendant “was involved in direct ly selling it s product s through it s internal sales division”, which included employees who performed sales services similar to the services provided by the plaint iff). 891 Compare Depianti v. Jan-Pro Franchising Int’l, Inc ., 39 F. Supp. 3d 112, 127-29 (D. Mass. 2014) (finding that a company sat isfied the second prongwhere it s “usual business was establishing a t rademark and cleaning system that was then licensed to regional franchisees” who, in turn, sold and provided the actual cleaning services.”) with Awuah v. Coverall N. Am., Inc. , 707 F. Supp. 2d 80, 82-84 (D. Mass. 2010) ( Awuah I) (finding that a company failed to sat isfy the second prongwhere it was in the business of selling cleaning services, just like the workers at issue, and not in the business of selling franchises). 892 Awuah I, 707 F. Supp. 2d at 82-84. 893 Athol , 439 Mass. at 179 (interpreting the Unemployment Statute, M.G.L. ch. 151A, § 2). See also Coll. News Serv ., 2006 WL 2830971, at *6 (finding that services provided by newspaper carriers were not out side the usual course of business in the context