Rainbow Development, LLC v. Commonwealth Department of Industrial Accidents

20 Mass. L. Rptr. 277
CourtMassachusetts Superior Court
DecidedNovember 19, 2005
DocketNo. SUCV200500435
StatusPublished
Cited by5 cases

This text of 20 Mass. L. Rptr. 277 (Rainbow Development, LLC v. Commonwealth Department of Industrial Accidents) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rainbow Development, LLC v. Commonwealth Department of Industrial Accidents, 20 Mass. L. Rptr. 277 (Mass. Ct. App. 2005).

Opinion

Cratsley, John C., J.

INTRODUCTION

Petitioner, Rainbow Development, LLC d/b/a Auto Shine (hereinafter “Auto Shine”), requested a hearing with the Department of Industrial Accidents (hereinafter “DIA”) to appeal a decision of the other respondent Liberty Mutual Insurance Company (hereinafter “Liberty Mutual”), determining that individuals working for Auto Shine are employees and not independent contractors. On November 22, 2004 a hearing was held. The DIA, through hearing officer Douglas Sears (hereinafter “hearing officer”), proceeded to examine whether these individuals should be classified as “independent contractors” or “employees” under M.G.L.c. 149, §148 and relevant chapters cross-referenced in c. 149, §148.

On January 5, 2005 the hearing officer rendered the opinion of the DIA. Through its hearing officer the DIA concluded that an employer-employee relationship exists and that these individuals are not independent contractors. On February 4, 2005 Auto Shine filed this case to obtain judicial review in the Superior Court. It seeks reversal of the decision of the DIA, alleging that under M.G.L.c. 30A, §14(7), the decision is unsupported by substantial evidence and is based upon an error of law. On June 24, 2005 Auto Shine filed a motion for Judgment on the Pleadings which is opposed by both the DIA and Liberty Mutual.

STATEMENT OF FACTS

The following facts are taken from the Administrative Record (hereinafter “A.R.”).

Auto Shine is a limited liability company with a principal place of business in Duxbuiy, Massachusetts. The company is in the business of “detailing and conditioning” new and used cars. The detailing and conditioning work is performed at car dealerships throughout the South Shore of Massachusetts. Auto Shine negotiates and contacts orally with car dealerships who wish to offer these services to their retail customers.

Auto Shine places advertisements in the newspaper to find individuals to perform the detailing and conditioning services. Individuals are required to sign a four-page contract (hereinafter the “agreement”) classifying themselves as “independent contractors.” Auto Shine has approximately 30-35 workers performing detailing and conditioning at numerous dealerships. The workers report to a dealership assigned by Auto Shine and at that site they receive a list of detailing work to be performed. The dealership pays Auto Shine per the agreement for the services performed. Auto Shine then pays the worker anywhere from 35-50% of what it receives as their compensation.

Auto Shine does not supply any of the cleaning materials, equipment, tools or supplies. However, all cleaning agents and chemicals used must be approved by Auto Shine and Auto Shine has supplies available for workers — the cost of which can be offset against the amount due to the workers. Auto Shine does not directly oversee any of the work performed. However, under the terms of the written agreement the work is to be done per the “industry standard,” and Auto Shine [278]*278can terminate a worker if they fail to perform adequately. While Auto Shine does not require workers to wear uniforms, company shirts do exist and have been worn by workers on occasion. Auto Shine also owns two box trucks. Workers use and operate these trucks in order to take materials and equipment to the various job sites. The workers do not cany general liability insurance nor are they bonded.

STANDARD OF REVIEW

The Superior Court may review an agency decision for the reasons specified in M.G.L.c. 30A, §14. Kozloski v. Contributory Retirement Appeal Bd., 61 Mass.App.Ct. 783, 786 (2004). The Court must give “(d]ue weight to experience, technical competence and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it.” M.G.L.c. 30A, §14(7). See also Athol Daily News v. Bd. Of Review of Employment and Training, 439 Mass. 172, 174 (2003). The Court may not substitute its judgment for that of the agency. TDJ Development Corp. v. Conservation Comm. of North Andover 36 Mass.App.Ct. 124, 128 (1994). Review is confined to the administrative record and the burden of proof rests with the plaintiff to overcome the presumption that the agency’s decision is valid. See Foxboro Harness, Inc. v. State Racing Comm’n, 42 Mass.App.Ct. 82, 85 (1997).

The agency’s decision may be modified or set aside only if the reviewing court “determines that the substantial rights of [a] party may have been prejudiced” because the agency decision is in excess of the statutory authority of the agency, based upon an error of law, unsupported by substantial evidence, arbitrary or capricious, or an abuse of discretion. M.G.L.c. 30A, §14(7). See also Cobble v. Comm’r of the Dept of Social Services, 430 Mass. 385, 390 (1999). “Substantial evidence means such evidence as a reasonable mind might accept as adequate to support a conclusion,” after taking into account opposing evidence in the record. M.G.L.c. 30A, §§1(6); 14(8).

DISCUSSION

M.G.L.c. 149, §148B provides a standard for determining whether an individual performing services shall be deemed an employee or an independent contractor.1 The employer bears the burden of proof and, because the conditions are conjunctive, its failure to demonstrate any one of the criteria set forth in subsections (1), (2), or (3), suffices to establish that the services in question constitute “employment” within the meaning of the statute. Silva v. Director of the Div. of Employment Sec., 398 Mass. 609, 611 (1986) (referring to the identical language found in M.G.L.c. 151A, §2.) A rebuttable presumption is established that any person performing services for another is an employee unless the employer meets the three-prong test. Athol Daily News v. Bd. Of Review of Employment, 439 Mass. 171, 175 (2003). Failure to demonstrate any one of the criteria in the statute suffices to establish that the services in question constitute employment. Id. (emphasis added.)

The hearing officer considered all the relevant criteria set forth in the applicable statutes. Auto Shine contends that the decision of the hearing officer is unsupported by substantial evidence or is based upon an error of law. Specifically, Auto Shine contends that “(t]he undisputed evidence clearly establishes that Rainbow did not exercise any control over these individuals and thus they are independent contractors . . .”2 At the hearing the written agreement between Auto Shine and the workers was entered into evidence and discussed in detail. (A.R. 5; 11; 15-18.) Further, the hearing officer cited many provisions of the agreement within his opinion. (A.R. 76-78.) Auto Shine required that every worker sign the agreement. (A.R 11; 15.) While Auto Shine argued that it primarily used the agreement to establish that the worker was an independent contractor, the text of the agreement also established that the work was to be done to “industry standard” and that only Auto Shine “approved cleaning solutions” were to be used by the workers. (A.R. 20; 76.) The agreement also allowed the worker to obtain approved cleaning supplies directly from Auto Shine and the payment for such supplies could be deferred and offset against the earnings of the worker. (A.R. 76.) The hearing officer found and this Court agrees that while the agreement attempts to establish an independent contractor relationship, it also asserts control over the performance of the worker via the contract. M.G.L.c. 149, §148B(a)l.

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Bluebook (online)
20 Mass. L. Rptr. 277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rainbow-development-llc-v-commonwealth-department-of-industrial-accidents-masssuperct-2005.