138 | Massachusetts Wage & Hour Peculiarities, 2025 ed. © 2025 Seyfarth Shaw LLP provides a specific and comprehensive regime governing the real estate industry in Massachusetts, while the Independent Contractor Statute applies generally across all industries. However, the SJC did not rule that all real estate salespersons in Massachusetts are or can be classified properly as independent contractors.810 The ruling provides no standard or guidance on what a real estate broker and salesperson need to do, or refrain from doing, to establish an independent contractor relationship given the real estate statute’s requirements. D. Franchisor-Franchisee Relationships In Patel v. 7-Eleven, Inc. (“Patel I”), the SJC held that the Independent Contractor Statute can apply to franchisors and the individual franchisees with whom they contract.811 The SJC held that there is no conflict between the first prong of the ABC test and the Federal Trade Commission Franchise Rule (“FTC Franchise Rule”) that contemplates some degree of franchisor control as a possible element of a franchise relationship.812 In the absence of an actual conflict, the SJC reasoned that the FTC Franchise Rule did not preempt the Independent Contractor Statute.813 The SJC added that “‘significant control’ over a franchisee's ‘method of operation’ and ‘control and direction’ of an individual's ‘performance of services’ are not necessarily coextensive.”814 The SJC cautioned that its holding was limited and recognized the existence of legitimate franchise relationships.815 It acknowledged the existence of the threshold question as to whether the franchisee “is an individual performing any service” for the franchisor.816 The SJC addressed this latter issue in Patel II, which is discussed in Section X.A. It concluded that the convenience store franchisees were not employees of the franchisor because if it were otherwise, the plaintiffs’ proposed construction of the statute would render all typical franchise relationships as presumptive employment relationships.817 E. Liability for Misclassification as an Independent Contractor An employee misclassified as an independent contractor has a private right of action against his or her “employer.” To recover damages, the misclassified employee must demonstrate that in the course of receiving the individual’s services, the employer violated one or more of the wage and hour laws specified in the statute.818 Those laws are: 810 Id. at 578. 811 Patel I, 489 Mass. at 357. 812 Id. at 365-366. 813 Id. at 366. 814 Id. at 367. 815 Id. at 370. 816 Id. at 357, 360, 369. 817 Patel II, 494 Mass. at 576. 818 M.G.L. ch. 149, § 148B(d).
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