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Judge denies motion to dismiss joint employer claim against Colonial dealerships

Stephen Churchill and Brook Lane recently prevailed in opposing a motion to dismiss in a case seeking unpaid wages from a family of automotive dealerships and their parent company, Colonial Automotive Group. In its motion, Colonial Automotive Group had argued that it could not be held liable as a joint employer under the Massachusetts Wage Act, Mass. Gen. L. ch. 149, ยง 148. The court rejected that argument, ruling that Massachusetts law recognizes joint employment liability both as a statutory matter and under the common law. The court also ruled that the plaintiffs had adequately pled facts suggesting that Colonial Automotive Group could be held liable as a joint employer, stating:

[T]his Court also concludes that the Complaint alleges enough to show an employment relationship between plaintiffs and Gordon Chevrolet, particularly if this Court draws all reasonable inference in favor of the plaintiffs. At least two of the plaintiffs executed agreements acknowledging the terms of their employment with "Gordon Chevrolet Geo dba Gordon Chevrolet" and "Gordon Chevrolet Geo dba Colonial Nissan." This suggests that they do provide services to Gordon Chevrolet or alternatively, that Gordon Chevrolet maintains some control over the terms and conditions of their employment. The Complaint also alleges that Gordon Chevrolet assists CAG as its agent in its management and control of the business and employment matters for the dealerships. In short, whether Gordon Chevrolet or CAG should remain in the case is best decided after plaintiffs have had an opportunity to explore these issues in discovery.

This decision will help prevent employers from avoiding state law wage obligations by enabling employees to pursue claims against the entities who may not directly employ them, but who are nonetheless responsible for creating or implementing improper compensation practices.

The case is Malebranche v. Colonial Automotive Group, Inc., Suffolk Case No. 2016-3479-BLS2. The court issued its decision on October 19, 2017.