| Date: | 10/02/2026 |
|---|---|
| Organization: | Division of Administrative Law Appeals |
| Docket Number: | CR-25-0366 |
City Auditor who left his position but continued to perform the same work on a regular basis as a consultant for the City in a City office with City equipment was an employee for retirement purposes and thus is eligible to purchase creditable service for the time he served as a consultant.
Robert Ekstrom appeals the May 23, 2025 decision of the New Bedford Retirement Board, declining to allow him to purchase service with the City of New Bedford from 2021 to 2023 because he was a consultant/independent contractor during that period. I held a hearing on April 1, 2026 and June 24, 2026 via Webex. I marked the joint prehearing memorandum, which included agreed facts, as Pleading A and admitted eleven exhibits into evidence that had been filed with the joint memorandum. Mr. Ekstrom, the former New Bedford City Auditor, testified, as did Michael Gagne, who was the City’s Chief Financial Officer during the relevant period, and Eric Jaikes, the New Bedford City Solicitor. I granted the New Bedford Retirement Board’s request to sequester the witnesses. The record closed when the parties filed closing briefs on July 31, 2026.
Findings of Fact
Based on the testimony, agreed facts, and exhibits presented at the hearing and reasonable inferences from them, I make the following findings of fact:
On April 7, 2025, Board counsel sent the New Bedford mayor a letter seeking his thoughts on whether Mr. Ekstrom was a City employee or an independent contractor. The letter noted that the professional services contract:
(1) required that Mr. Ekstrom carry his own personal automobile insurance, (2) required all documents the Consultant prepares and receives become the property of the City, (3) required all communications be confidential, which extends to Mr. Ekstrom’s employees, officers, agents, attorneys, subcontractors or other representatives, (4) identifies Mr. Ekstrom as consultant, “solely responsible for the methods and means used in performing the services” under the Agreement, (5) required to maintain records pertaining to the Agreement’s requirements and maintain such records for six (6) years, permitting access to the City for review and copying, (6) required Mr. Ekstrom to maintain internal accounting controls and permit the City to review his audited financial statements and (7) the invoices he submitted to the City were on his Robert W. Ekstrom Financial Consulting letterhead and were billed to the City at an hourly rate based on the time spent on the services provided and (8) reported his compensation on a 1099 rather than a W-2 Form.
(Ex. 11.)
In response to this inquiry, Eric Jaikes, the New Bedford City Solicitor, acknowledged that Mr. Ekstrom had worked for the City during the period he sought to purchase but declined to take a position as to whether he was an employee or an independent contractor. He stated that when the City was negotiating for his services, it was Mr. Ekstrom who:
suggested a consulting agreement, with Mr. Ekstrom providing services on a part-time basis. Additionally, the Scope of Services contained in both Agreements for Professional Services were agreed upon by Mr. Ekstrom and the City. Mr. Ekstrom’s hourly rate reflected in the Agreements was higher than that for a comparable Unit C employee due in part to the fact that Mr. Ekstrom would not be receiving benefits from the City such as health insurance, vacation, sick, or personal leave, etc.
(Agreed fact 28; Ex. 8.) As to whether Mr. Ekstrom was an employee or an independent contractor, Mr. Jaikes responded that:
It is the Administration’s opinion that whether Mr. Ekstrom should be classified as an “employee” in accord with the Retirement statute, thereby allowing him to purchase creditable service for that 19 month period, requires an application of facts to Massachusetts statutes and case law, responsibility for which we believe rests with the New Bedford Retirement Board and not the City of New Bedford.
Id.
Discussion
The public employee retirement statute provides that “[a]ny member in service shall, subject to the provisions and limitations of sections one to twenty-eight inclusive, be credited with all service rendered by him as an employee in any governmental unit after becoming a member of the system.” M.G.L. c. 32, § 4(1)(a). Mr. Ekstrom is now a member of the New Bedford Retirement System and was a system member before he entered into the professional services contract with New Bedford, a time period for which he is seeking to purchase creditable service. The parties agree that whether he can make this purchase turns on whether he was an employee of the City during this period. That Mr. Ekstrom signed contracts that described him as an independent contractor does not necessarily stand in his way because the Contributory Retirement Appeal Board has previously determined that a signed contract that called a worker an independent contractor and the workers’ understanding at the time that he was an independent contractor is not dispositive of whether the worker was an employee. Cook v. Northampton Retirement Bd., CR-13-262, Decision at 10 (Cont. Ret. App. Bd., April 2, 2018).
The retirement statute does not give a definition of employee that clearly distinguishes an employee from an independent contractor. In pertinent part, it provides that a public employee is a “person whose regular compensation . . . , is paid by any political subdivision of the commonwealth . . . [and] shall mean any person who is regularly employed in the service of any such political subdivision.” M.G.L. c. 32, § 1. Regular compensation in turn means “compensation received exclusively as wages by an employee for services performed in the course of employment for his employer.” Id. Wages are “the base salary or other base compensation of an employee paid to that employee for employment by an employer.”
These definitions are mostly circular but not completely unhelpful. The City of New Bedford is a political subdivision of the state. And there can be little dispute that Mr. Ekstrom worked regularly for New Bedford during the relevant period because he worked 9 to 5 four days per week at City Hall. See Pollard v. Berkshire County Ret. Sys., CR-08-803, Decision at 4 (Div. Admin. Law App., June 7, 2013) (continuous part-time service qualifies as regular employment).
But before attempting to resolve whether Mr. Ekstrom should be considered a municipal employee for the period of time he seeks to purchase, I address a prerequisite to his purchase application, namely that applications to purchase creditable service must rely on a statutory provision authorizing such purchase. The retirement statute allows state employees to purchase certain contract service; it does not mention municipal employees. M.G.L. c. 32, § 4(1)(s). Thus, municipal employees, like Mr. Ekstrom, must rely on some other provision of the statute if they wish to purchase contract service. The Division of Administrative Law Appeals (DALA) has previously approved contract service purchases by municipal employees under a variety of other provisions within the retirement statute. See Callahan v. Revere Ret. Bd., CR-12-523 (Div. Admin. Law App., Aug. 25, 2017) (purchase of prior part-time service under M.G.L. c. 32, § 4(2)(c)); Levye v. Cambridge Ret. Bd., CR-11-636 (Div. Admin. Law App., Mar. 30, 2012) (purchase of service rendered in a different retirement system under M.G.L. c. 32, § 3(5)).
Mr. Ekstrom argues that his purchase is allowable under M.G.L. c. 32, §§ 3(3) or 4(1). Section 4(1)(a), as previously noted, states that a public employee who is a member in service and performs work for a public employer is entitled to creditable service. This provision does not mention service purchases, but it was cited by an Appeals Court panel as supporting the purchase by a Boston city employee of four months of contract service prior to being admitted as a member of the Boston Retirement System. Crowley v. Contributory Ret. App. Bd., 73 Mass. App. Ct. 1103 (2008) (MAC Rule 23.0 decision).
Section 3(3) provides an employee who had a right to become a retirement system member but failed to do so may have an opportunity to later become a member. Mr. Ekstrom has not cited any decisions addressing whether Section 3(3) may be used by a municipal employee to purchase contract service. Nonetheless, that section is similar to a provision of Section 3(5) that allows an employee to purchase service when wrongly excluded from membership in a retirement system. DALA has granted an application by a member who sought to purchase service for a municipality under Section 3(5) when he first worked for the municipality as a contractor. Cook v. Northampton Ret. Bd., CR-13—262 (Div. Admin. Law App., Nov. 2, 2018.)
None of these decisions discuss in detail why municipal applicants may rely on the cited provisions as bases for purchasing contract service. The theory supporting such purchase must ultimately be that the workers should all along have been treated as employees and retirement deductions been taken from their pay. Thus, what Mr. Ekstrom must prove is that he should have been considered an employee during the 19 months he worked for New Bedford as a contractor.
Mr. Ekstrom tries several approaches. He argues that DALA should look to the Wage and Hour statute that sets forth specific standards for determining whether a person is an employee or an independent contractor. The Wage and Hour statute presumes that a person working for an employer is an employee unless the following three things can be shown:
M.G.L. c. 149, § 148B(a). Were this statute applicable in the retirement law context, Mr. Ekstrom could easily be determined to have been an employee when he worked under a professional services contract. Looking at just the last two criteria, he was functioning as the City Auditor, which was a City position that he had just left, and hence his work was not outside the usual course of business of the City. Mr. Ekstrom did not have an independent business that served multiple communities providing municipal auditor services, did not develop one while working under the professional services contract, and indeed worked on auditing exclusively for New Bedford at City Hall.
But CRAB has decided that M.G.L. c. 149, § 148B(a) does not apply to retirement matters. It observed that Section 148B’s definition of employee was stricter than the common-law approach and that:
The Legislature . . . did not make these stricter definitions of “employee” applicable to the retirement law. . . . Thus, we, DALA, and the courts have continued to apply traditional common-law principles in considering whether a contracted municipal worker is an employee or an independent contractor.
Cook v. Northampton Retirement Bd., CR-13-262, Decision at 7 (Cont. Ret. App. Bd., Apr. 2, 2018). CRAB described the common-law approach as focusing on the degree of control the employer exercised over the worker. It stated:
We have held that whether a worker is deemed an employee or an independent contractor under the retirement law must be determined by the “nature of the relationship,” and that the “most prominent, if not the controlling criterion” is the degree to which the employer controls the contractor’s work. The “control test” arises from the common law, which originally utilized the test to determine whether an employer should be held liable for the tortious deeds of a contractor. The reasoning behind the distinction was that, if the employer exercised control over the contractor’s performance of his work duties, the employer was also in a position to protect the safety of others and minimize his risk. Thus, the degree of control exercised by the employer over his contractor was linked both to his ability to prevent harm and to the degree of fault fairly attributable to the employer.
Id. at 6.
In practice, this has meant that who supervises a worker, where they work, and under what conditions are part of the evaluation. For example, when an attorney named Danna Crowley was hired by the City of Boston’s treasury office trust department, she was not at first treated as a City employee. She submitted invoices for the 35 hours per week she worked, and she received work from the City’s corporation counsel and the secretary of the treasury department, both of whom supervised her work. After four months, on August 4, 1988, she became a Boston Retirement System member. Her hours, work, location and supervision did not change. An Appeals Court panel determined that she was an employee, holding that:
As the DALA magistrate explicitly found, [corporation counsel and the secretary-treasurer] had “exclusive control of [Crowley’s] work assignments and were responsible for evaluating her job performance.” CRAB adopted this finding. Crowley was hired by [corporation counsel] and reported to [corporation counsel and the secretary-treasurer], and Crowley worked in a designated location at Boston City Hall, using supplies provided by the city. She was required to sign in and out each day. Crowley’s job duties did not change after August 4, 1988, and [corporation counsel and the secretary-treasurer] continued to supervise her work. These facts demonstrate sufficient control to show that Crowley should be considered an employee and not an independent contractor.
Crowley, Decision at 5-6 (2008). It did not matter to the Court that Ms. Crowley had to submit invoices to be paid during her first four months or whether the invoices were for the same amount of time each week because the evidence showed that she was regularly employed by the City or that the invoices described her as a vendor. Decision at 3, 7.
Similarly, Kathleen Callahan worked for many years as the grant administrator for the Revere Police Department. For the first 15 years, she worked part-time, had to submit invoices to get paid during many of those years, and for some of the time the funds to pay her came from grants. Magistrate Kenneth Forton determined that she was an employee during this period because she was regularly employed by the City of Revere in service for the benefit of the Police Department and she was supervised by the police chief. It did not matter that for a time she was paid out of grant funds she had raised, nor did it matter that she did not receive sick or vacation time. Callahan v. Revere Ret. Bd., CR-12-523 (Div. of Admin. Law App., Aug. 25, 2017.)
Most tellingly, Joseph Cook, a law school graduate worked under a written professional services contract with the City of Northampton that deemed him to be an independent contractor until he passed the bar exam and became a municipal employee. CRAB, fully aware that Mr. Cook had worked under a written professional services contract, remanded the matter to DALA to determine whether Mr. Cook worked truly independently or under the control of the City’s law department. Cook, decision at 2, 10-11 (Contributory Ret. App. Bd., Apr. 2, 2018.) As noted earlier, on remand, DALA determined that the City law department maintained sufficient control over Mr. Cook’s work that he was in fact an employee. DALA decision at 9-11.
The facts concerning Mr. Ekstrom’s work as a consultant also show that he was actually an employee, not an independent contractor. When he started as a consultant, the work he performed was the same work he performed when he was the City Auditor. He continued to work in City Hall, with a City-provided office, desktop computer, and laptop, and he communicated with a City-provided cell phone and on the City’s email. When he later took over some of the work of the City’s Chief Financial Officer, this again was work ordinarily performed by a City employee, and he performed it at City Hall with the equipment provided to him by the City. His auditing work was subject to supervision by the Chief Financial Officer and the tasks he performed that were Chief Financial Officer tasks were subject to supervision by the mayor.
That Mr. Ekstrom submitted invoices in order to receive payment for the work he performed does not detract from this conclusion, just as it did not in Crowley. Many of the other conditions set forth in his professional services contract had little impact on the nature of his relationship with the City. The documents he created became property of the City, which is hardly surprising for a municipal worker who works at City Hall. The requirement that he keep records of his work for the City for six years does not appear to have required any extra effort in practice since he worked at City Hall and presumably kept his records there since his nascent consulting business had no records. The clause requiring that he was to keep his communications with other City workers confidential assumed that Robert W. Ekstrom Financial Consulting had numerous employees when in fact it had only Mr. Ekstrom. The clause discussing his firm’s internal auditing controls and audited financial records again assumes the existence of an actual consulting firm that did not exist. Unsurprisingly, given the agreement, his compensation was reported on a 1099, not a W-2, but this did not change the nature of his actual working relationship with the City.
How much Mr. Ekstrom was supervised by the City when working under contract must be evaluated in the light of the supervision provided when he was employed by the City as the auditor. As a contractor, he was supervised by the part-time Chief Financial Officer, Mr. Gagne, who regarded him as the de facto City Auditor and appears to have supervised him accordingly. While undoubtedly relying on Mr. Ekstrom’s expertise, Mr. Gagne gave him assignments beyond what the contract called for and at times directed him how to perform certain tasks. When in the second year of the contract, Mr. Ekstrom took on some of the roles of the Chief Financial Officer, he was required to attend the mayor’s weekly staff meetings, which I take to be a means by which the mayor supervised high ranking City employees. As the City supervised Mr. Ekstrom in a manner that looks like the way it supervised him when he was employed as the Auditor, this shows a sufficient level of control to establish that he was an employee.
When Mr. Ekstrom entered into the first professional services agreement with the City, he may have wanted space to branch out and perform other work for other people, but in practice that did not happen. In the 19 months he worked for the City as a consultant, he worked only for the City at City Hall performing work that was normally the work of a City employee. Because his position seems to have been treated no differently than when he was
the City Auditor, I conclude that Mr. Ekstrom was an employee for retirement purposes, and that he may therefore purchase the 19 months he worked under a contract.
Division of Administrative Law Appeals
James P. Rooney
Administrative Magistrate
Division of Administrative Law Appeals
14 Summer Street, 4th floor
Malden, MA 02148
Tel: (781) 397-4700
www.mass.gov/dala
Dated: October 2, 2026