The United States District Court for the District of Massachusetts recently issued a case involving the straight-forward application of the Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), to a class-wide independent contractor dispute.
In Magalhaes v. Lowe's Home Centers, Inc., Civil Action No. 13-10666-DJC (Mar. 10, 2014), the Lowe's home improvement chain hired independent contractors to install products sold at its stores, including countertops, roofing, flooring, and window treatments. Each of the contractors worked under essentially the same form independent contractor agreements.
The plaintiff worked for Lowe's installing window treatments such as blinds. He had his own business, called "Shades in Place", hired his own employees, and had two vehicles to assist in performing the installations. He could turn down Lowe's work, and could also perform work for other customers. He brought suit under Massachusetts law, contending that he and the other contractors were misclassified, and were actually employees entitled to benefits. He moved for class certification under Rule 23(b)(3).
The court first found that under Massachusetts law an independent contractor needed to be free from control both under contract and, more importantly, as a matter of fact. With that, it quickly concluded that under Dukes the case lacked sufficient commonality and commonality. The evidence showed that although the contracts were the same, the factual circumstances for each of the contractors was different. Thus, while the terms of the contract were a common fact, and the legal theory was the same, each contractor had a different set of circumstances regarding their interaction with Lowe's and the manner in which they ran their businesses. In the terms used by the Dukes Court, the resolution of the issue could not be resolved "in one stroke."
The court also found that the plaintiff was not an adequate class representative. The same independent contractor agreement the plaintiff signed also obligated him to indemnify Lowe's for claims by his employees. Those employees, however, were also putative class members, creating a conflict of interest.
Finding three of the four requirements of Rule 23(a) lacking, the court went on to find that predominance and superiority were also absent. Accordingly, it refused to certify the class.
The Magalhaes decision is interesting in two respects. First, it involved the application of Dukes to an independent contractor misclassification dispute. Second, the court avoided the temptation of certifying the case based on facial similarities among the putative class members' claims, and decided certification based on the fact that those similarities could not resolve the case on a class-wide basis.
The Bottom Line: The Dukes requirement of common proof can be a difficult obstacle to certification in independent contractor misclassification cases.
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