Depianti v. Jan-Pro Franchising International, Inc.

465 Mass. 607
CourtMassachusetts Supreme Judicial Court
DecidedJune 17, 2013
StatusPublished
Cited by49 cases

This text of 465 Mass. 607 (Depianti v. Jan-Pro Franchising International, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Depianti v. Jan-Pro Franchising International, Inc., 465 Mass. 607 (Mass. 2013).

Opinions

Lenk, J.

Giovani Depianti, a janitorial cleaning services franchisee, along with franchisees from other States, filed this putative class action in the United States District Court for the District of Massachusetts against the defendant, Jan-Pro Franchising International, Inc. (Jan-Pro). Depianti alleges, inter alia, that Jan-Pro misclassified him as an independent contractor, see G. L. c. 149, § 148B, and committed various wage law violations. A judge of the United States District Court for the District of Massachusetts certified the following questions to this court, pursuant to S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981):

“[1.] Whether a plaintiff’s failure to exhaust administrative remedies pursuant to [G. L. c. 149, § 150,] by filing a complaint with the Attorney General deprives a court of jurisdiction to consider the plaintiff’s claims under [G. L. c. 149, §§ 148, 148B, and 150,] and under [G. L. c. 151, §§ 1 and 1A],
“[2.] Whether and how to apply the ‘right to control test’ for vicarious liability to the franchisor-franchisee relationship. . . .
“[3.] Whether a defendant may be liable for employee misclassification under [G. L. c. 149, § 148B,] where there was no contract for service between the plaintiff and defendant.”

We answer the first question, “No.” We answer the second question, “Yes,” with further discussion concerning the application of the “right to control test” to the franchisor-franchisee relationship. We answer the third question, “Yes.”2

1. Background. Jan-Pro is a Massachusetts corporation “in [609]*609the business of operating and franchising comprehensive cleaning and maintenance businesses.” It sells regional rights to use the Jan-Pro brand to so-called “regional master franchisees.” Upon purchasing these rights, regional master franchisees become the exclusive franchisors of the Jan-Pro brand within defined geographic areas. Regional master franchisees, in turn, sell the right to use the Jan-Pro brand to so-called “unit franchisees,” who perform cleaning services for customers. Unit franchisees are provided with customer accounts by regional master franchisees, though unit franchisees may solicit additional business on their own. All customer accounts so obtained become the property of regional master franchisees.

Regional master franchisees invoice customers directly and receive payment for cleaning services rendered by unit franchisees. They deduct certain fees from the gross revenue collected and remit the balance to unit franchisees. They pay a portion of the fees deducted from the gross revenue to Jan-Pro, in the form of royalties.* *3

Depianti contracted with BradleyMktg Enterprises, Inc. (Bradley), a Jan-Pro regional master franchisee operating in Massachusetts, to purchase a Jan-Pro unit franchise.4 5He performed cleaning services under the Jan-Pro name from approximately June, 2003, through December, 2006. In 2008, he filed a putative class action against Jan-Pro in the United States District Court for the District of Massachusetts, alleging unfair and deceptive business practices in violation of G. L. c. 93A; misclassification as an independent contractor in violation of G. L. c. 149, § 148B; various wage law violations pursuant to G. L. c. 149, §§ 148 and 150, and G. L. c. 151, §§ 1 and 1A; intentional or negligent misrepresentation; quantum meruit; and unjust enrichment.6 Depianti’s claims of unfair and deceptive [610]*610business practices and misrepresentation are based in part on alleged conduct of Bradley, not Jan-Pro, and therefore depend on Jan-Pro being held vicariously liable for the conduct of Bradley, its franchisee.6 By contrast, Depianti’s misclassification and wage claims allege direct, rather than vicarious, liability.

Jan-Pro sought summary judgment as to all claims, and Depianti moved for partial summary judgment on the misclassification claim. After a hearing on the parties’ motions, the United States District Court judge stated his intention to certify the second and third questions, set forth supra, to this court, and invited comment by the parties.

Jan-Pro thereafter argued that the misclassification claim should be dismissed, because Depianti neglected to file a complaint with the Attorney General pursuant to G. L. c. 149, § 150 (§ 150),7 before initiating his action, thereby failing to exhaust his administrative remedies.8 The United States District Court judge determined that Jan-Pro had waived this argument by not raising it earlier in the litigation. However, pursuant to his independent obligation to ensure the United States District Court’s jurisdiction, see FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231 (1990), the judge added the first question, set forth supra, to his certification order, to determine whether Depianti’s failure to file a complaint with the Attorney General before bringing suit deprived the United States District Court of jurisdiction over his misclassification and wage claims.9

[611]*6112. Discussion, a. Failure to file with the Attorney General. The first reported question asks “[w]hether a plaintiff’s failure to exhaust administrative remedies pursuant to [§ 150] by filing a complaint with the Attorney General deprives a court of jurisdiction to consider the plaintiff’s claims under [G. L. c. 149, §§ 148, 148B, and 150,] and under [G. L. c. 151, §§ 1 and 1A].” To this question, we answer, “No.”

Pursuant to § 150, an individual alleging a violation of G. L. c. 149, § 148 or 148B, may bring a private civil action ninety days after filing a complaint with the Attorney General, or sooner if the Attorney General assents to such suit.10 Here, Depianti neglected to submit a complaint to the Attorney General before commencing his private action against Jan-Pro. As stated, however, the United States District Court judge ruled that Jan-Pro waived its objection to this procedural defect. Therefore, Depianti’s failure first to file with the Attorney General is fatal to his misclassification and wage claims only if such failure deprives the United States District Court of jurisdiction. See FW/PBS, Inc. v. Dallas, supra (Federal court has independent duty to ensure its own jurisdiction).

In determining whether a procedural defect deprives a court of jurisdiction to hear a claim, we consider (1) to what extent the defect interferes with the “accomplishment of the purposes implicit in the statutory scheme,” and (2) to what extent the opposing party can “justifiably claim prejudice.” Schulte v. Director of the Div. of Employment Sec., 369 Mass. 74, 79-80 (1975). Here, Depianti’s failure to file a complaint with the Attorney General before initiating his action neither interfered with the accomplishment of the purposes implicit in § 150 nor prejudiced Jan-Pro.

The purposes implicit in § 150 are twofold. The first paragraph [612]*612of § 150 authorizes, but does not require, the Attorney General to bring criminal charges for alleged violations of G. L. c. 149, § 148, the wage statute. G. L. c. 149, § 150.

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Bluebook (online)
465 Mass. 607, Counsel Stack Legal Research, https://law.counselstack.com/opinion/depianti-v-jan-pro-franchising-international-inc-mass-2013.