For Immediate Release - August 24, 2009

Attorney General Coakley Praises Supreme Judicial Court Ruling in Independent Contractor Misclassification Case

BOSTON - Massachusetts Attorney General Martha Coakley praised the Massachusetts Supreme Judicial Court's (SJC) recent decision in Somers v. Converged Access, Inc. (CAI). On Friday, the SJC ruled as to the proper measure of damages an employee must receive when misclassified as an independent contractor under the state's Wage and Hour laws. The SJC ruled that in such circumstances the damages incurred are equal to the value of wages and benefits the worker should have received as an employee, but did not receive from his employer. In issuing the decision, the Court affirmed that the employer bears the burden of proof on the issue of whether an employee is properly classified as an independent contractor. The Attorney General's Office filed an amicus brief in support of the plaintiff in this case.

"The SJC's ruling is an important victory for all workers in the Commonwealth," said Attorney General Coakley. "Employers must know that they will be held responsible if they try to take advantage of their workers by not paying them all of the wages they are owed under the law."

The case, Somers v. Converged Access, Inc., began in May 2006, when Robert Somers filed a lawsuit against his former employer claiming, among other things, that he was misclassified as an independent contractor. In January 2008, the Middlesex Superior Court allowed the employer's summary judgment motion by finding that even though the employer failed to show that Somers was an independent contractor, Somers failed to show any damages. In reaching this conclusion, the trial court relied on the employer's asserted statutory set-off claim, assuming that Somers would have earned less if he had been classified as an employee. The employee appealed the trial court's ruling, and the SJC, on its own initiative, transferred the case from the Appeals Court. The SJC heard arguments from the parties and the Attorney General's Office in May 2009, and on Friday overruled the trial court on the independent contractor issue and remanded the matter to the trial court.

In the SJC's decision, the Court ruled that the Wage Act, which includes the Independent Contractor/Misclassification statute, is a strict liability statute. The Court stated, "Although we have never been called to interpret the term 'valid set-off' in the context of § 150, we understand the term in the common, ordinary sense to refer to circumstances where there exists a clear and established debt owed to the employer by the employee. Here, there was no evidence of any debt that the plaintiff owed to CAI, and no basis to invoke the 'valid set-off' defense." The Court also stated "Misclassification not only hurts the individual employee; it also imposes significant financial burdens on the Federal government and the Commonwealth in lost tax and insurance revenues. Moreover, it gives an employer who misclassifies employees as independent contractors an unfair competitive advantage over employers who correctly classify their employees and bear the concomitant financial burden."

The Attorney General's Office is responsible for enforcing the laws regulating the payment of wages laws, overtime and misclassification of employees in the Commonwealth. The Attorney General's Office issued an Advisory pdf format of independent_contractor_advisory.pdf
to provide guidance to employers on the Independent Contractor/Misclassification Law in April 2008. Workers who believe they have been misclassified, have not been paid all their wages, including earned vacation pay or that their rights have been violated are strongly urged to call the Attorney General's Fair Labor Hotline at (617) 727-3465. More information about the wage and hour laws is also available in multiple languages at the Attorney General's Workplace Rights website: www.massworkrights.com.

The matter was argued for the plaintiff by Harold L. Lichten. Assistant Attorney General Karla E. Zarbo, of Attorney General Coakley's Fair Labor Division, participated at oral argument in support of the employee.

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