Massachusetts Supreme Judicial Court Blocks App Driver Ballot Initiatives

In a unanimous opinion issued on June 14, 2022, the Massachusetts Supreme Judicial Court found it was an error for the Massachusetts Attorney General to certify two proposed ballot initiatives to redefine the employment classification of rideshare app drivers. The Court determined the initiatives contained at least two substantially distinct policy decisions, and that the lumping together of multiple policy questions does not allow voters to answer a single initiative with a simple “yes” or “no.”

The Massachusetts Attorney General certified Initiative Petitions 21-11 and 21-12 in September 2021. The petitions, which are identical except for the former’s additional section relating to paid driver safety training, would classify rideshare app drivers as independent contractors rather than employees and spell out minimum compensation and benefit standards for drivers. However, both petitions also contain a separate, substantially distinct provision, buried in language at the end, which would narrow the tort of liability for companies like Uber and Lyft for driver misconduct.

The provisions state that for the purposes of third-party lawsuits, rideshare app drivers are independent contractors. While this provision seems consistent with the other language in the petitions, the Court noted a less obvious implication: Accepting the provision places a burden on third parties injured by drivers’ misconduct or negligence to prove that drivers are employees, not independent contractors, in order to hold the parent companies liable.

In January 2022, Plaintiffs challenged these provisions on the grounds that a law defining and regulating the contractual relationship between network companies and app-based drivers violates the state law requirement that ballot initiatives concern only related or mutually dependent subjects. Plaintiffs further alleged the Attorney General’s summaries of the proposed laws did not adequately explain how the petitions would change the existing legal landscape if approved by voters.

The Court agreed with Plaintiffs and found that, because of the measure stipulating that rideshare app drivers are independent contractors for the purpose of third-party lawsuits, the petitions contain at least two substantively distinct policy decisions and thus fail the state law “related subjects” requirement. More specifically, the Court held that designating app drivers as independent contractors for the purpose of Massachusetts wage and hour laws did not also require determining the companies’ potential tort liability.

This ruling does not come as a complete surprise, as the Court hinted during oral argument in May that it is critical of any attempt to mislead voters.

Massachusetts Attorney General and gubernatorial candidate, Maura Healey, whose office defended the ballot measure, stated her respect for the decision to bar the ballot initiatives, but clarified that she plans to continue efforts to force Uber and Lyft to comply with Massachusetts employment law and ensure that rideshare drivers have the same rights as all other employees.

The classification of app drivers is a question that has been hotly contested for years. In fact, Healy has previously brought lawsuits against both Uber and Lyft. And, although the Court struck down the ballot initiatives, Healy’s efforts remain popular with the 80% of rideshare drivers who reported wanting the flexibility of independent contractor status with access to new benefits.

The caption for this action is Koussa et al. v. Attorney General et al., case number SJC-13237, filed in the Supreme Judicial Court for Massachusetts.

The legal team at Miller Shah LLP has extensive experience representing employee misclassification matters as well as other violations of the Fair Labor Standards Act and similar state laws. If you have any questions regarding this subject, please contact Samantha Kielbania (sjkielbania@millershah.com) or Chiharu Sekino (cgsekino@millershah.com). The firm can also be reached toll-free at (866) 540-5505.

Miller Shah LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. The firm is an active member of Integrated Advisory Group (https://iag.global), which provides clients access to excellent legal and accounting resources around the globe. For more information about the firm, please visit www.millershah.com.

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