Court Opinion

ID: 4501171
Source: CourtListenerOpinion
Date Created: 2020-01-24 13:04:09.343235+00
Date Added: 2024-06-11T13:32:44.135602
License: Public Domain

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18-P-1404                                              Appeals Court

  JOEL WEISS       vs.   LOOMIS, SAYLES & COMPANY, INC., & another.1

                              No. 18-P-1404.

        Suffolk.         September 11, 2019. - January 23, 2020.

               Present:     Blake, McDonough, & Hand, JJ.

 Independent Contractor Act.       Practice, Civil, Directed verdict.

     Civil action commenced in the Superior Court Department on
January 30, 2014.

    The case was tried before Christine M. Roach, J.

     Stephen S. Churchill (Brant Casavant also present) for the
plaintiff.
     James W. Bucking (Allison L. Anderson also present) for the
defendants.
     Stephen T. Melnick, Jennifer M. Duke, & Mary K. Sexton, for
Massachusetts Technology Leadership Council, Inc., amicus
curiae, submitted a brief.

    McDONOUGH, J.        Joel Weiss filed a single-count complaint in

the Superior Court, alleging that the defendants, Loomis Sayles

    1   Loomis, Sayles & Company, L.P.
                                                                     2

& Company, Inc., and Loomis Sayles & Company, L.P.

(collectively, Loomis), misclassified him as an independent

contractor rather than an employee.   See G. L. c. 149, §§ 148B

(§ 148B or independent contractor statute), 150.     In the middle

of the jury trial, after Loomis had moved for a directed verdict

and had begun presenting evidence in its defense, the judge

directed a verdict in favor of Loomis, the party with the burden

of proof.   We reverse.2

     Evidence.   In assessing the judge's order allowing Loomis's

motion for a directed verdict, we summarize the evidence in the

light most favorable to Weiss, the nonmoving party, while

drawing all reasonable inferences in his favor.    See Donaldson

v. Farrakhan, 436 Mass. 94, 96 (2002).   In 2010, a recruiter at

Eliassen Group, LLC (Eliassen), a large information technology

staffing firm, contacted Weiss about certain project-based work

at Loomis, a financial services company.3   Weiss, a software

engineer with significant experience in the financial sector,

was interested in the engagement.   After Weiss signed, as

     2 We acknowledge the amicus brief submitted by the
Massachusetts Technology Leadership Council, Inc.

     3 More specifically, Loomis is an asset management company
that creates and manages custom investment portfolios for
institutional clients. The particular project called for an
individual to take over an application called Risk Insite, and
to support and update it as necessary.
                                                                       3

president of JoSol, Inc. (JoSol),4 an independent contractor

agreement (initial contractor agreement) with Eliassen, he

interviewed with Loomis supervisors, Kevin McGuire and Luke

Antolini.    A decision was made that Weiss was a good fit for

Loomis.

     On August 4, 2010, Loomis entered into a "professional

services vendor agreement" with Eliassen for "Joel Weiss for

technology services."    The initial contractor agreement between

Weiss's company, JoSol, and Eliassen ran for three months.       The

parties subsequently extended the agreement on several

occasions.   The only JoSol employee authorized to provide

services to Loomis was Weiss.    On February 1, 2013, Loomis and

Eliassen entered into a second "professional services vendor

agreement" for "Joel Weiss for Technology Services."     That

contract, which ran through December 31, 2013, contained

language stating that Weiss was "free to accept engagements from

others during the term of this Agreement, so long as such

actions [did] not impair [his] ability to perform his . . .

services to Loomis Sayles."     If Loomis had extended an offer of

     4 JoSol, Weiss's preexisting consulting company, had just
two employees: Weiss and his wife, Sarah. Weiss opted to
contract with Eliassen through JoSol because the corporation-to-
corporation arrangement was a better overall financial deal than
a direct relationship with Eliassen. Before the Loomis
engagement, Eliassen required Weiss to furnish proof that JoSol
was a legitimate business. Notably, Loomis never learned of the
existence of JoSol.
                                                                    4

employment, Weiss would have accepted it; Loomis provided its

employees with a more generous benefit package than those

available through JoSol and Eliassen.   Weiss, however, was not

given that choice.

     In September 2010, Weiss commenced work in Loomis's

technology group.    Working in teams, the Loomis managers in the

group created and oversaw projects to meet the needs of the

Loomis investment professionals.5   As a member of McGuire's team,

Weiss worked on a number of these team projects, creating and

fixing information technology applications.   Weiss also worked

on several projects of various lengths for other managers,

including one spearheaded by John Gidman, Loomis's chief

information officer (CIO).   In total, Weiss worked on at least

fifteen Loomis projects.

     Weiss reported, among others, to McGuire.   During their

daily interactions, McGuire "would give [Weiss] direction" and

Weiss would bring issues to McGuire.    The "powers that be" also

assigned required tasks to Weiss as part of his daily job.

Weiss worked directly with the Loomis employees who used the

applications, assisting with specific issues and upgrades.

     5 The investment professionals (portfolio managers,
analysts, and traders) made up only thirty-five to forty percent
of Loomis's total workforce of 680.
                                                                    5

     Loomis assigned Weiss to a cubicle directly across from

McGuire's office and provided Weiss with a desk, computer,

office supplies, a badge allowing building access, a Loomis

picture identification card, a Loomis telephone number, and a

Loomis e-mail address.   Although Weiss had no set work hours,

"the conventional wisdom" was that he should be in the office

during business hours.   For the first two years, Weiss worked

five days per week in the office; during his final year, he

worked at home, as did "most of the people [he] knew [at

Loomis]," on Fridays and during holiday periods.   When he worked

at home, he used his personal laptop computer, which someone at

Loomis helped him partition to keep his business work separate

from his personal matters.    He always alerted his Loomis

supervisor to his whereabouts.

     Weiss attended at least a couple of team-wide and project-

specific meetings per week.   All members of the team -- Loomis

employees and contractors -- attended the team-wide meetings.6

The contractors frequently communicated with Loomis managers and

worked out the technical details of projects with them.      On many

occasions, Loomis converted contractors into employees.

     6 Loomis referred to the contractors, among other
designations, as "consultants," "developers," "temps," and
"vendors."
                                                                   6

     Each week, Weiss submitted time sheets signed by McGuire to

Eliassen, which paid JoSol seventy-five dollars per hour; and

from those proceeds, JoSol paid Weiss a salary.7   Loomis paid

Eliassen $104 per hour for Weiss's services.   Loomis approved

some of the contractors' direct requests for rate increases.

     In Weiss's first year, McGuire had no objections to Weiss

working overtime, and Weiss was permitted to work as many hours

as he wanted.   Toward the end of Weiss's third year, Antolini,

acting on Gidman's instruction, asked Weiss to keep his weekly

hours under fifty.   Shortly after that conversation, Weiss was

instructed not to log more than forty hours per week without

prior approval from Gidman.

     During Weiss's tenure, Loomis employed forty individuals in

the technology group,8 which had a budget of $50 million

(approximately six to ten percent of Loomis's overall budget).

Loomis also staffed its technology group with eighty to one

hundred independent contractors; many of these contractors

worked full time at Loomis for years.   In fact, the Eliassen

     7 At some point, Weiss negotiated a four dollars per hour
pay raise with Eliassen.

     8 The technology development professionals in the group
consisted primarily of database engineers, database
administrators, and software engineers. McGuire was uncertain
whether the individuals performing these services were employees
or contractors. There was evidence that the consultants were
also unsure whether other workers in the technology group were
contractors or Loomis employees.
                                                                    7

recruiter informed Weiss that his contract was "open ended" and

that he had "never had a consultant finish [at Loomis]."     Loomis

had never hired an independent contractor directly; contractors

were required to first set up a contract with a staffing firm

(such as Eliassen).

    In the annual reports that Gidman prepared for Loomis's

board of directors, he included the work of all the service

providers among the achievements of the technology group.     The

names of the independent contractors, including Weiss, appeared

in the organizational charts contained in those reports.

Moreover, in a 2011 "organizational realignment" chart sent to

the entire company, Gidman listed the names of the independent

contractors, including Weiss, with the employees; he did so in

order to communicate the full extent of the "expertise and

resources" that could be utilized by the Loomis technology

group.

    For four weeks in December 2011, two weeks in January 2012,

and three weeks in June 2012, Weiss worked on a cash flow

project for the Commonwealth of Massachusetts.   While working

forty to sixty hours per week at Loomis, Weiss spent an

additional ten to twenty hours per week on the Commonwealth's

project.   In September 2013, without explanation or notice,

Loomis terminated Weiss.   Weiss subsequently collected
                                                                      8

unemployment benefits through JoSol.     Loomis was JoSol's last

business engagement.

     Discussion.   1.   Standard of review.   We review the

allowance of a motion for a directed verdict to determine

whether "anywhere in the evidence, from whatever source derived,

any combination of circumstances could be found from which a

reasonable inference could be drawn in favor of the plaintiff"

(citation omitted).     Claudio v. Chicopee, 81 Mass. App. Ct. 544,

546 (2012).   A directed verdict in favor of the party with the

burden of proof, here Loomis, should be granted only in

"exceptional" cases.9    Brunelle v. W.E. Aubuchon Co., 60 Mass.

App. Ct. 626, 630 (2004).

     2.   Misclassification claim.   "Under § 148B (a), an

individual who performs services shall be considered to be an

employee, for purposes of G. L. c. 149 and G. L. c. 151, unless

the employer satisfies its burden of proving by a preponderance

of the evidence that '(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

     9 We have reminded trial judges that in close cases, "it is
sound practice to deny the motion and to give the case to the
jury, which may render the question academic by returning a
verdict for the defendant. If the jury finds for the plaintiff,
the trial judge may, upon a motion for judgment [notwithstanding
the verdict] reconsider and decide the issue previously
presented by the motion for a directed verdict" (citation
omitted). Chapman v. Katz, 448 Mass. 519, 530 n.25 (2007).
                                                                     9

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 that

involved in the service performed.'"   Somers v. Converged

Access, Inc., 454 Mass. 582, 589 (2009), quoting G. L. c. 149,

§ 148B (a).   Thus a putative employer like Loomis may rebut the

statutory presumption of employment by establishing by a

preponderance of the evidence the three prongs of an independent

contractor relationship.   See G. L. c. 149, § 148B (a) (1)-(3).

If Loomis failed to satisfy even one statutory prong, Weiss was

Loomis's employee.   See Somers, supra at 589-591.   The

independent contractor statute must be applied in a manner that

furthers its purpose to protect workers "from being deprived of

the benefits enjoyed by employees through their

misclassification as independent contractors."    Id. at 592.   As

a remedial statute, § 148B is entitled to a liberal

construction.   See Depianti v. Jan-Pro Franchising Int'l, Inc.,

465 Mass. 607, 620 (2013).

    a.   Standing.   At all relevant times, Loomis's primary

defense was that Weiss, as an individual, lacked standing to

bring a misclassification claim.   Loomis reasons that because it

obtained Weiss's engineering services through its legitimate

business-to-business relationship with Eliassen, and Weiss
                                                                   10

voluntarily provided services through JoSol, his preexisting

corporation and employer, § 148B was inapplicable.   See Chambers

v. RDI Logistics, Inc., 476 Mass. 95, 108-109 (2016).     Weiss

counters that Loomis contracted for the individual services of

Weiss, and used an intermediary, Eliassen, to evade its

statutory obligations to its long-term "consultants."     The trial

judge did not reach the standing issue; she grounded her

directed verdict ruling on Loomis's establishment of Weiss's

independent contractor status as a matter of law.    We conclude

that the evidence was sufficient to support a finding that Weiss

had standing as an individual to assert a misclassification

claim under § 148B.10

     Here, the evidence demonstrated that Loomis contracted with

Eliassen not for the services of JoSol, but for "Joel Weiss for

technology services."   Asked why Weiss's name appeared on the

contract, Gidman explained that "the provider of the services is

tremendously important [to Loomis] because not all people are

the same . . . [and Weiss had] a specific set of expertise and

experience [Loomis was] looking for."   In fact, Weiss was the

only JoSol employee authorized by Loomis to perform the services

     10As a threshold matter, we note that the Supreme Judicial
Court has indicated that "[t]he statutory reference to
'individuals who provide services' . . . does not expressly
exclude individuals who provide services through a corporation."
Chambers, 476 Mass. at 109.
                                                                     11

in issue.    Weiss provided his personal services to Loomis for

three years, working forty to sixty hours per week.     Due to time

constraints and the contractual restriction that Loomis imposed

on Weiss's work for others, a jury could find that the services

of Weiss, the alleged independent contractor, were not "actually

available to entities beyond [Loomis], even if they [were]

purport[ed] to be so."     Chambers, 476 Mass. at 109, quoting

Advisory 2008/1, Attorney General's fair labor and business

division.    Although other factors could support a finding of a

legitimate business-to-business relationship exempt from

liability under § 148B, the factual issue should have been

submitted to the jury.11    See Chambers, supra at 96, 108-109

(treating standing as question of fact).

     b.     Independent contractor status.   Weiss argues that the

jury could reasonably have found that Loomis failed to establish

one or more of the statutory prongs of § 148B.     We agree.

     11All parties agreed that Loomis, Eliassen, and JoSol were
legitimate businesses. The fact that Loomis obtained Weiss's
services through a contract with a legitimate staffing company
did not automatically render § 148B inapplicable. See Sebago v.
Boston Cab Dispatch, Inc., 471 Mass. 321, 328-329 (2015) (noting
that employer end runs around their G. L. c. 149 obligations
through contractual arrangements with third parties are
prohibited); Depianti, 465 Mass. at 622 (finding that language
in G. L. c. 149, § 148B [a] [1] "does not reflect any
legislative intent to allow an employer to insulate itself from
liability for misclassification by causing or creating another
entity to contract with its employees").
                                                                    12

    i.   Freedom from control and direction.   Based on the

evidence presented, the jury could have reasonably found that

Weiss was subject to Loomis control and direction, both under

his contract for the performance of the services, and in fact.

The issue turns on whether Loomis had the right to supervise,

direct, and control the details of Weiss's performance, or

whether Weiss was free from supervision "not only as to the

result to be accomplished but also as to the means and methods

that are to be utilized in the performance of the work"

(citation omitted).   Athol Daily News v. Board of Review of the

Div. of Employment & Training, 439 Mass. 171, 177 (2003).

    Here, JoSol's contract with Eliassen restricted Weiss's

ability to perform services for others that might have

interfered with his work at Loomis.   Before agreeing to the

engagement, Loomis supervisors interviewed Weiss.     McGuire gave

Weiss assignments and directions, and actively supervised the

performance of Weiss's services from McGuire's office directly

across from Weiss's cubicle.   Weiss brought McGuire his "issues"

and attended meetings where progress was discussed.    E-mails

established that Weiss and McGuire frequently communicated and

discussed the technical details of projects.   As part of his

daily job, Weiss performed required tasks for other Loomis

managers.   Loomis also provided Weiss with a workstation and the

supplies and equipment he needed to perform the services.      In
                                                                      13

order to get paid, Weiss was required to submit his hours weekly

to his supervisor at Loomis for approval.      Loomis paid Weiss by

the hour, not by the project, and had the authority to grant

raises.      Loomis monitored and limited Weiss's hours, and

terminated Weiss at will without reason.      This evidence was

sufficient to support a finding of control under the Athol Daily

News standard, precluding a directed verdict in Loomis's favor.12

See Athol Daily News, 439 Mass. at 177.

       ii.   Usual course of business.   In assessing whether

services are performed outside the usual course of business of

the company, one relevant factor is whether the services are

necessary or merely incidental to the business.      See Carey v.

Gatehouse Media Mass. I, Inc., 92 Mass. App. Ct. 801, 807

(2018).      "[A] service need not be the sole, principal, or core

product that a business offers its customers . . .      in order to

be furnished in the usual course of that business."      Id. at 808.

"[T]he manner in which a business defines itself" is another

relevant factor in the usual course of business inquiry.        Id. at

805.    The Supreme Judicial Court has illustrated the concept of

services provided within the employer's usual course of business

       The language of JoSol's contractor agreements with
       12

Eliassen, while relevant, is not dispositive on the right of
control issue. See Boston Bicycle Couriers, Inc. v. Deputy
Director of the Div. of Employment & Training, 56 Mass. App. Ct.
473, 483-484 (2002).
                                                                   14

with three examples:     an art instructor providing services on a

"regular or continuous basis" within an art museum; musicians

performing as a "usual and customary activity" of a beer bar;

and an organist playing music as a "usual part of" a funeral

home's business (citations omitted).     Athol Daily News, 439
Mass. at 179.   We conclude that the jury applying these

principles could have found that Weiss performed services within

the usual course of Loomis's business.

    Loomis is in the business of managing and investing money

for its clients.    The jury could have found that Loomis

maintained a large technology group as part of its normal

operations; and that Loomis staffed it on a regular and

continuous basis with a significant number of independent

contractors.    Indeed, according to one Eliassen recruiter, the

contractors never finished at Loomis.    The contractors provided

the technology services needed by Loomis's investment

professionals, working full time for years on assignments from

their Loomis managers.     There was intermingling within the

technology group to the point that neither Loomis employees nor

contractors knew whether they were interfacing with fellow

employees or independent contractors.
                                                                  15

     Moreover, Loomis publicly advertised the vital role played

by the technology group in the success of its business.13

Gidman, Loomis's CIO, acknowledged that the highly regulated

investment industry and the sophistication of its clients

"place[ed] demands" on Loomis for a deep infrastructure;

information and technology is a required component of that

infrastructure; and that the work of the technology group is

"important to the operation of Loomis."   Finally, Gidman

specifically included the services performed by Weiss and the

contractors among the accomplishments of the technology group in

the annual reports to the board of directors.     This evidence

would have amply supported a finding that Weiss performed

services within the usual course of Loomis's business.

     iii.   Independently established business.   "The critical

inquiry under this prong is whether 'the worker is capable of

performing the service to anyone wishing to avail themselves of

the services or, conversely, whether the nature of the business

     13On its website, Loomis listed technology as a specific
group within the organization. Under the "Careers" section,
Loomis described the role served by the group as follows:
"Technological leadership and an ongoing commitment to operating
efficiency can significantly impact a firm's financial success.
With that mission in mind, the technology group partners with
every person, team and department at Loomis Sayles to ensure our
most efficient processes and best tools are in place for the
task at hand. The ideal candidate for positions in technology
will have the knowledge and experience needed to develop and/or
support technology solutions throughout the company."
                                                                   16

compels the worker to depend on a single employer for the

continuation of the services.'"   Sebago v. Boston Cab Dispatch,

Inc., 471 Mass. 321, 336 (2015), quoting Athol Daily News, 439
Mass. at 181.   Stated differently, the question is whether at

the time the services were provided, the individual was "wearing

the hat" of the putative employer or the "hat of his own

independent enterprise."    Boston Bicycle Couriers, Inc. v.

Deputy Director of the Div. of Employment & Training, 56 Mass.

App. Ct. 473, 480 (2002).   "Essentially, [this prong] requires

the [putative employer] to demonstrate that the worker is

performing services as an entrepreneur" (citation omitted).

Subcontracting Concepts, Inc. v. Commissioner of the Div. of

Unemployment Assistance, 86 Mass. App. Ct. 644, 649 (2014).     The

determination whether this statutory prong is satisfied "must be

based upon a comprehensive analysis of the totality of relevant

facts and circumstances of the working relationship.   No one

factor is outcome-determinative."    Boston Bicycle Couriers,

Inc., supra at 484.   We need not repeat the evidence that would

establish that Loomis did not, as a matter of law, necessarily

meet its evidentiary burden with respect to this prong.     Suffice

it to say that a jury could have found that in reality, Weiss

was not free to provide services to anyone of his choice; and

that the hat he wore for three years through fifteen different

projects had a Loomis label on it.   Of particular significance
                                                                      17

was the restriction inserted by Loomis in the contract that

Weiss was only free to work for others "so long as such actions

[did] not impair [his] ability to perform his . . . services to

Loomis Sayles."

    In sum, in order to prevail, Weiss had to prevail on only

one of the statutory prongs, and there was evidence from which

the jury could have found in favor of Weiss on each of the

statutory prongs.   At the time the trial judge granted the

motion for a directed verdict on the misclassification claim,

Loomis had not proven that Weiss was an independent contractor

as a matter of law.   The verdict was directed in error.      A new

trial on the misclassification claim will be required.

    Conclusion.     The judgment on the directed verdict is

reversed and the case is remanded to the Superior Court for

further proceedings consistent with this opinion.

                                    So ordered.