The saga surrounding the challenges to the Massachusetts “ABC” Test for independent contractors has taken a potentially positive turn for the transportation industry. A decision issued by the U.S. Court of Appeals for the First Circuit on September 30 reversed a Federal District Court’s ruling regarding FAAAA preemption and sent the matter back to that court for further consideration as to whether the Massachusetts statute satisfies the broad federal preemption test consistent with the principles articulated by the Court of Appeals.

As background, the current law in Massachusetts creates a presumption that workers are employees, unless all three criteria of Section 148(B) of the Massachusetts General Laws are met, which is commonly referred to as the “ABC” Test. The three prongs of the “ABC Test” are: (A) the worker is free from control and direction in performing the work (under the contract and in fact); (B) services provided by the worker are outside of the usual course of the business of the employer; and (C) the worker is customarily engaged in an independent business performing such services. There was a revision to Prong B in 2004 that eliminated an exemption for workers who performed their work “outside of the company’s places of business,” which forced motor carriers that regularly utilize independent contractors within Massachusetts to change their business models to comply or run the risk of penalties.