LENK, J.
The question presented in this case is whether, in the circumstances, individuals who live and work outside of Massachusetts for a corporation headquartered in Massachusetts may bring an action in a Massachusetts court to enforce certain Massachusetts independent contractor, wage, and overtime pay statutes. Insofar as the written contract between the parties contains an enforceable clause requiring both that actions be brought in Massachusetts and that the "Contract and all rights and obligations of the parties" be determined under Massachusetts law, and where application of Massachusetts law is not contrary to a fundamental policy of the jurisdiction where the individuals live and work, we conclude that it was error to dismiss the plaintiffs' complaint.
1. Background. We recite the facts alleged in the complaint, accepting as true such facts, as well as any reasonable inferences drawn therefrom. See Mass. R. Civ. P. 12 (b) (1), (6), 365 Mass. 754 (1974); Ginther v. Commissioner of Ins., 427 Mass. 319, 322 (1998).
The plaintiffs, Judith Ann Taylor, Gardner Taylor, and Donald Wellington, are individuals who live in New York and work there as couriers for the defendant, Eastern Connection Operating, Inc., a corporation headquartered in Woburn, Massachusetts. The defendant is in the business of delivering packages in various States along the East Coast, including Massachusetts and New York.
The plaintiffs entered into identical contracts (collectively, the contract) with the defendant to perform package pickup and delivery services exclusively in New York.
In 2010, the plaintiffs brought this action in the Superior Court on behalf of themselves and other similarly situated individuals. They alleged that the defendant had misclassified them as independent contractors rather than as employees, in violation of G. L. c. 149, § 148B, the Massachusetts independent contractor statute. They also alleged that the defendant failed to pay them wages and overtime in violation of G. L. c. 149, § 148, the Massachusetts wage statute, and G. L. c. 151, § 1A, the Massachusetts overtime statute (collectively, the Massachusetts wage statutes).
The defendant moved to dismiss the complaint for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. See Mass. R. Civ. P. 12 (b) (1), (6). The judge allowed the motion, concluding that the Massachusetts independent contractor statute does not apply to non-Massachusetts residents working outside Massachusetts, and, therefore, that the plaintiffs cannot be reclassified as employees pursuant to that statute. He determined also that, as independent contractors, the plaintiffs failed to state claims under the Massachusetts wage statutes, since those statutes apply only to employees. See G. L. c. 149, § 148; G. L. c. 151, § 1A.
2. Discussion. a. Forum selection. As an initial matter, we observe that the plaintiffs properly brought their claims against the defendant in the Superior Court. Because the contract states that it is to be construed according to the laws of Massachusetts, we determine the validity of the forum selection clause in accordance with Massachusetts law. See Melia v. Zenhire, Inc., 462 Mass. 164, 168 (2012), citing Jacobson v. Mailboxes Etc.
Here, the contract states that "any action shall be commenced in that jurisdiction [where the defendant is headquartered] in the closest [S]tate court." Since the defendant drafted the forum selection clause presumably for its own convenience, see note 4, supra, there is nothing unfair or unreasonable about enforcing that clause in the present circumstances. Further, Massachusetts courts undoubtedly have personal jurisdiction over the defendant, which is headquartered in the Commonwealth, see G. L. c. 223A, § 2, and the Superior Court has subject matter jurisdiction over disputes of this nature. See G. L. c. 212, §§ 3, 4. The question then becomes which State's law the Superior Court should apply in deciding the plaintiffs' claims.
b. Choice of law. i. Misclassification claim. The plaintiffs' first claim, and the claim on which their other claims are predicated, is that the defendant misclassified them as independent contractors when they are, in fact, employees. Specifically, the plaintiffs invoke the protections of the Massachusetts independent contractor statute.
In assessing which State's law to apply to the plaintiffs' misclassification claim, "we look to our established `functional' choice of law principles and to the Restatement (Second) of Conflict of Laws [(1971)] [(Restatement)], with which those principles generally are in accord." Hodas v. Morin, 442 Mass. 544, 549 (2004), quoting Bushkin Assocs., Inc. v. Raytheon Co., 393 Mass. 622, 631-632 (1985). Where, as here, the parties have expressed a specific intent as to the governing law,
If, however, the particular issue to which the choice-of-law clause is being applied is "one which the parties could not have resolved by an explicit provision" in the contract, the parties' choice of law should be upheld, unless (1) "the chosen [S]tate has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice," or (2) "application of the law of the chosen [S]tate would be contrary to a fundamental policy of a [S]tate which has a materially greater interest than the chosen [S]tate in the determination of the particular issue and which ... would be the state of the applicable law in the absence of an effective choice by the parties." Restatement, supra at § 187(2). See Feeney v. Dell Inc., 454 Mass. 192, 206 (2009), quoting Hodas v. Morin, supra at 550, quoting Restatement, supra. See also L.L. McDougal, III, R.L. Felix, & R.U. Whitten, American Conflicts Law § 137 (5th ed. 2001).
Here, the parties expressed a specific intent that the contract be construed in accordance with Massachusetts law. The particular issue — whether the plaintiffs were independent contractors or employees — is not one the parties could resolve with an explicit provision in the contract, as, under either New York or Massachusetts law, a court could conclude that the plaintiffs were employees regardless of their classification under
First, because the defendant is headquartered in Massachusetts, "we readily conclude that Massachusetts has a `substantial relationship' to the transaction." Id., quoting Restatement, supra at § 187(2)(a).
Second, even if we were to assume that New York has a greater interest in the determination of the issue, and that New York law would apply in the absence of an effective choice by the parties, application of Massachusetts law would not in any event contravene a fundamental policy of New York. See Restatement, supra at § 187(2)(b). Under both Massachusetts and New York law, a purported independent contractor who does not enjoy sufficient independence from the hiring party is deemed an employee. See G. L. c. 149, § 148B (a); Scott v. Massachusetts Mut. Life Ins. Co., supra, quoting Matter of Ted Is Back Corp. (Roberts), supra. Although the Massachusetts independent contractor statute features a more expansive definition of "employee" than the New York common-law test, "[t]he fact ... that a different result might be achieved if the law of the chosen forum is applied does not suffice to show that the [forum] law is repugnant to a fundamental policy" of the State whose law would otherwise apply. Johnson v. Ventra Group, Inc., 191 F.3d 732, 740 (6th Cir. 1999), citing Banek Inc. v. Yogurt Ventures U.S.A., Inc., 6 F.3d 357, 363 (6th Cir. 1993). See Restatement, supra at § 187 comment g ("To be `fundamental,' a policy must ... be a substantial one"). Contrast Hodas v. Morin, supra at 551 (application of Massachusetts law in action for prebirth judgment of parentage law contrary to fundamental policy of New York, where New York law prohibits gestational carrier agreements and Massachusetts law permits them).
The defendant points to no authority, and we are aware of none, indicating that it is a fundamental policy of New York that employees be defined only in accordance with the New York common-law test for employment. Rather, we view the fundamental policy of New York in this area as being roughly
The defendant contends that, regardless of choice-of-law principles, the Massachusetts independent contractor statute has no application to work performed outside of Massachusetts by non-Massachusetts residents, and that the choice-of-law clause cannot imbue the statute with extraterritorial effect it otherwise lacks. However, where no explicit limitation is placed on a statute's geographic reach, there is no presumption against its extraterritorial application in appropriate circumstances. See Hodas v. Morin, supra at 547 ("That the gestational carrier, her husband, and the plaintiffs all reside outside of Massachusetts does not bar the Probate and Family Court's subject matter jurisdiction under G. L. c. 215, § 6, because the equity statute poses no residency requirement"); O'Connell v. Chasdi, 400 Mass. 686, 689 n.3 (1987) (applying Civil Rights Act, G. L. c. 12, § 11I, to conduct occurring in South America where "the statute does not contain a provision limiting its application"). See also Gonyou v. Tri-Wire Eng'g Solutions, Inc., 717 F.Supp.2d 152, 155 (D. Mass. 2010) ("Massachusetts has applied its statutory law to conduct outside its borders if sufficient contacts with the Commonwealth exist"). Rather, "[w]hen a statute is silent as to its extrastate applicability, as is usually the case, a court may and should as appropriately look to all the relevant choice of law considerations as if it were choosing between common-law rules." Leflar, Choice-Influencing Considerations in Conflicts Law, 41 N.Y.U. L. Rev. 267, 306 (1966).
The Massachusetts independent contractor statute is silent as
Because the Massachusetts independent contractor statute properly applies to the plaintiffs' misclassification claim, it was error to have dismissed that claim. Additionally, because the plaintiffs may yet be deemed employees under the Massachusetts independent contractor statute, it was error as well to dismiss their wage and overtime claims on the ground that, as independent contractors, they failed to state claims under the Massachusetts wage statutes. See G. L. c. 149, § 148; G. L. c. 151, § 1A.
ii. Wage and overtime claims. Since the complaint was dismissed at an early stage of the litigation, it has yet to be determined whether, under the Massachusetts independent contractor statute, the plaintiffs were employees of the defendant or independent contractors. Such a determination will govern the plaintiffs' wage and overtime claims, which are predicated on the assertion that they were employees. See G. L. c. 149, § 148; G. L. c. 151, § 1A. If it is determined that the plaintiffs were independent contractors, the wage and overtime claims are subject to dismissal. See G. L. c. 149, § 148; G. L. c. 151, § 1A.
The record before us contains neither the contract nor any information relating to its formation, both of which may bear on the proper construction of the choice-of-law clause, particularly as to whether it may and does encompass statutory wage and overtime claims. In either event, the parties more generally have not had an opportunity to present evidence or argument pertinent to the proper application of our functional choice-of-law principles to such claims. See Bushkin Assocs, Inc. v. Raytheon Co., supra at 631-634. The matter must accordingly be resolved on remand.
3. Conclusion. The judgment of dismissal is vacated, and the
So ordered.
By contrast, under New York law, an individual performing a service not in the construction industry, see N.Y. Lab. Law § 861-c, is an employee if the hiring party "exercises either control over the results produced or over the means used to achieve the results." Scott v. Massachusetts Mutual Life Ins. Co., 86 N.Y.2d 429, 433 (1995), quoting Matter of Ted Is Back Corp. (Roberts), 64 N.Y.2d 725, 726 (1984).
Here, there is no concern that the choice-of-law clause was forced upon the party now resisting it, as the defendant, the party that drafted the choice-of-law clause, is now attempting to disclaim it, rather than to enforce it. See note 4, supra. Any concern over unequal bargaining power in the underlying negotiation would suggest that the clause should be enforced, rather than discarded. See American Ins. Co. v. Frischkorn, 173 F.Supp.2d 514, 519 (S.D. W. Va. 2001) ("inequitable" and "unjust" for stronger party "to forsake [its] own choice-of-law clause simply because it benefits the opposing parties").
The presumption against the extraterritorial application of Federal statutes is grounded in the assumption that Congress would indicate expressly that a statute applies extraterritorially before intruding on the "delicate field of international relations." McCulloch v. Sociedad Nacional de Marineros de Honduras, supra at 21, quoting Benz v. Compania Naviera Hidalgo, S.A., 353 U.S. 138, 147 (1957). See Equal Employment Opportunity Comm'n v. Arabian Am. Oil Co., supra, citing McCulloch v. Sociedad Nacional de Marineros de Honduras, supra at 20-22 (presumption against extraterritorial application of Federal legislation "serves to protect against unintended clashes between our laws and those of other nations which could result in international discord"). Such concern is inapposite in the interstate context. For this reason, we do not find persuasive the analysis in Hadfield, or in the cases from which it draws support. Assuming without deciding that there is a presumption against the application of Massachusetts statutes outside the United States, but see O'Connell v. Chasdi, 400 Mass. 686, 689 n.3 (1987) (applying Civil Rights Act, G. L. c. 12, § 11I, to conduct occurring in South America), we conclude that there is no corresponding presumption against the application of Massachusetts statutes to conduct occurring outside Massachusetts but within the United States. See Leflar, Choice-Influencing Considerations in Conflicts Law, 41 N.Y.U. L. Rev. 267, 306 (1966).