2 Steps Back — First Circuit Could Have Done More for the Independent Contractor Business Model -

Approximately one year ago in FLASH No. 46, we wrote about Massachusetts District Court Judge Robert G. Stearns’ industry positive decision in Schwann, et al. v. FedEx Ground Package System, Inc. In short, guided by the First Circuit Court of Appeals’ ruling in Massachusetts Delivery Ass’n v. Coakley, 769 F.3d 11 (1st Cir. 2014), Judge Stearns granted summary judgment in favor FedEx Ground on the grounds that Prong 2 of the Massachusetts Independent Contractor Law, Mass. Gen. Laws ch. 149, §148B (the “Massachusetts “ABC” Test”) was preempted for motor carriers under the Federal Aviation and Administration Authorization Act of 1994 (“FAAAA”) because application of Prong 2 would “unquestionably have an impact on ‘price, route[s], [and] services’ by in effect proscribing the carrier’s preferred business model.” In addition, Judge Stearns ruled that Prong 2 could not be severed from the statute as a whole; enforcing either Prong 1 or Prong 3 would lead to the same result: a preempted impact on a motor carrier’s choice of business model. As a result, the entire Massachusetts “ABC” Test must be treated as preempted.