CLAYTON SCHWANN, individually and on behalf of a class of all others similarly situated; THOMAS LEDUC, individually and on behalf of a class of all others similarly situated; RAMON HELEODORO, individually and on behalf of a class of all others similarly situated; JAMES E. DUGGAN, individually and on behalf of a class of all others similarly situated; ERIC VITALE, individually and on behalf of a class of all others similarly situated; MUCHIRAHONDO PHINNIAS, individually and on behalf of a class of all others similarly situated; TEMISTOCLES SANTOS, individually and on behalf of a class of all others similarly situated; ROBERT SANGSTER, individually and on behalf of a class of all others similarly situated; JEFF BAYLIES; LAWRENCE ADAMS, Plaintiffs, Appellants, MARVIN SANTIAGO, individually and on behalf of a class of all others similarly situated; MANUEL MONTROND, individually and on behalf of a class of all others similarly; SERRULO FERNANDEZ DEJESUS, individually and on behalf of a class of all others similarly situated; WAN PYO CONG, individually and on behalf of a class of all others similarly situated; LEON HECTOR, Plaintiffs,
FEDEX GROUND PACKAGE SYSTEM, INC., d/b/a FEDEX HOME DELIVERY, Defendant, Appellee
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. [Hon. Richard G. Stearns, U.S. District Judge].
Harold L. Lichten, with whom Shannon Liss-Riordan and Lichten & Liss-Riordan, P.C. were on brief, for appellants.
Peter Sacks, State Solicitor, with whom Maura Healey, Attorney General of Massachusetts, and Elizabeth N. Dewar, Assistant State Solicitor, were on brief, for the Massachusetts Attorney General, amicus curiae.
William M. Jay, with whom James C. Rehnquist, Kate E. MacLeman, and Goodwin Procter LLP, were on brief, for appellee.
Before Lynch, Stahl, and Kayatta, Circuit Judges.
KAYATTA, Circuit Judge.
Plaintiffs here are individuals who contracted with Defendant FedEx Ground Package System, Inc. (" FedEx" ) to provide so-called first-and-last mile pick-up and delivery services. They claim that FedEx should have treated and paid them as employees in certain respects, rather than as independent contractors, because FedEx cannot satisfy all three necessary requirements under the Massachusetts Independent Contractor Statute, Mass. Gen. Laws ch. 149, § 148B(a) (the " Massachusetts Statute" ). We find that the express preemption provision of the Federal Aviation Administration Authorization Act of 1994 (" FAAAA" ), 49 U.S.C. § 14501(c)(1), preempts the application of one of those requirements to FedEx. We also find that the preempted requirement is severable from the two remaining requirements of the Massachusetts Statute, and we remand for further consideration of whether Plaintiffs may prevail on their claims under Massachusetts law by relying on either of those requirements.
A. Relevant Facts
FedEx is a federally registered motor carrier that is licensed to provide nationwide package pick-up, transportation, and delivery services. As relevant to the claims in this case, FedEx did not itself customarily perform what is called " first-and-last mile" pick-up and delivery services to customers. Instead, it contracted with individuals such as Plaintiffs whom it treated as independent contractors to perform these services. FedEx's relationship with these individuals was governed by an Operating Agreement (" OA" ).
Under the OA, each individual contractor acquired an exclusive and transferable interest in customer accounts located in a designated geographical area in return for assuming the responsibility of providing daily pick-up and delivery services for FedEx in that area. The OA contemplated that such services may be performed by persons other than the individual contractor, and established a financial structure by which the contractors were compensated. The OA also provided that FedEx shall not have authority " to prescribe hours of work, whether or when the Contractor is to take breaks, what route the Contractor is to follow, or other details of performance." The contractor bore all costs and expenses incurred in providing the pick-up and delivery services, including but not limited to those associated with obtaining and using a suitable vehicle, fuel, compliant communications equipment, uniforms, and insurance. At least some of these costs and expenses were defrayed through forms of supplemental compensation paid to the contractor under the OA's financial structure.
B. State Law
Plaintiffs contend that FedEx misclassified them as independent contractors and seek damages for loss of wages, improper wage deductions, and loss of benefits under the Massachusetts Statute and the Massachusetts Wage Act (the " Wage Act" ), Mass. Gen. Laws ch. 149, § § 148, 150, as well as attorneys' fees.
The relevant text of the Massachusetts Statute provides that " an individual performing any service . . . shall be considered to be an employee" unless:
(1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and
(2) the service is performed outside the usual course of the business of the employer; and,
(3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as ...