Disputes between Boston area taxicab drivers and medallion owners came to a head as the Massachusetts Supreme Judicial Court issued a ruling in Sebago v. Boston Cab Dispatch. At the heart of the debate is the classification of these drivers as independent contractors, instead of employees.
The Massachusetts Independent Contractor Statute
Under the Massachusetts Independent Contractor statute, there is a presumption that all workers are employees, unless three conditions exist:
- The worker exercises discretion and control over the manner in which he performs work duties;
- Work responsibilities occur outside of the employer’s normal course of business; and
- The worker independently engages in a trade that is similar to the work performed.
When applying this statute to the Sebago case, the Court ruled in favor of Boston Cab, finding that all conditions were met. The taxicab drivers followed regulations set by local codes, not the medallion owners. The drivers did not pay any percentage of their earnings to the medallion owners, and therefore, the success of the owners is not dependent on the success of the drivers. And, lastly, the drivers operated a business separate from the owners, which is evidenced by their ability to lease medallions from any owner and use any dispatch service they chose.
If you have questions about an independent contractor classification, reach out to our office today to speak with an experienced attorney.