The Massachusetts Supreme Judicial Court recently held that the Massachusetts Independent Contractor Law may apply to individuals who perform services outside of Massachusetts for a Massachusetts company. The decision, Taylor v. Eastern Connection Operating, Inc., significantly expands the potential reach of Massachusetts wage and hour laws.
The plaintiffs in Taylor were New York residents. They worked as couriers in New York for a company headquartered in Massachusetts. The plaintiffs performed their services exclusively in New York. The independent contractor agreements they entered into with the company, however, provided that the agreement “and all rights and obligations of the parties shall be construed in accordance with the laws where” the company was headquartered, i.e., Massachusetts.
The plaintiffs filed a putative class action, claiming that they had been misclassified as independent contractors under Massachusetts law. The company then moved to dismiss. The trial court granted the motion, concluding that the Massachusetts Independent Contractor Law does not apply to non-Massachusetts residents working outside of the state.
On appeal, the Massachusetts Supreme Judicial Court reversed the trial court’s decision. Significantly, the court stated that “there is no presumption against the application of Massachusetts statutes to conduct occurring outside Massachusetts but within the United States.” Accordingly, the court remanded the case back to the trial court for an evaluation of whether the Massachusetts Independent Contractor Law should be applied to the plaintiffs’ claims.
This decision raises the specter that Massachusetts wage and hour laws, including the strict definition of independent contractor set forth in the Massachusetts Independent Contractor Law, could be applicable to workers who never even set foot in the Commonwealth.