Decision Marks Major Development Under Mass. Independent Contractor Statue
Foley Hoag LLP secured a victory on October 5, 2022 for client Loomis Sayles & Company at a jury trial in the Weiss v. Loomis Sayles & Company, Inc., et al. case in the Massachusetts Superior Court for Suffolk County.
The case concerned a service provider's (Joel Weiss) claim that financial investment company, Loomis Sayles, misclassified him as an independent contractor. Weiss provided software engineering services to Loomis Sayles through his own company, JoSol, Inc., and a technology services provider, the Eliassen Group. After JoSol's business relationship with Loomis Sayles ended, Weiss claimed that he was misclassified by Loomis Sayles and entitled to a cash payment for lost employee benefits. The jury returned a verdict in favor of Loomis Sayles, finding that Weiss lacked standing to bring his claim.
The jury found that because Weiss performed services through legitimate businesses – JoSol and the Eliassen Group – the Massachusetts independent contractor statute did not apply. Here, Loomis Sayles hired the Eliassen Group for technology services, and in turn, Eliassen hired JoSol to perform that work. The jury found these to be legitimate businesses engaged in a legitimate business arrangement. This meant that Weiss lacked standing to bring a claim against Loomis Sayles for misclassification.
This case marks a major clarification under the Massachusetts independent contractor statue, and is a significant legal development for companies that procure services through other companies, a practice that is both commonplace in Massachusetts and vital to the Commonwealth's economy.
"When we started this case, there was little to no precedent on this threshold standing question," said Foley Hoag partner and Labor & Employment practice co-chair Allison Anderson. "In other words, if a real business engages with another real business, does the employee of the first business have standing to sue for misclassification against the second business?" Foley Hoag pressed this threshold argument at summary judgment, in an initial jury trial that ended in directed verdict for Loomis Sayles, on appeal, and again at this re-trial.
"Over the last nine years, this went from a grey area of the law, to a recognized question of law: a plaintiff needs to get over the business-to-business hurdle in order for the independent contractor statue to apply," Anderson continued. "We are very pleased by this precedent-setting outcome for our client."
The Foley Hoag team consisted of attorneys Anderson, Jim Bucking, Matthew Baltay, Christian Garcia, Natalie Panariello and senior paralegal Carla Nigro.