Malebranche, et al. v. Colonial Automotive Group, Inc., et al. (Lawyers Weekly No. 09-028-17)

Civ. No. 2016-3479-BLS2
on behalf of themselves and all others similarly situated,
This is a putative class action against a family of automotive dealerships and their parent company, Colonial Automotive Group, Inc. (CAG), alleging a failure to pay car sales employees compensation due under the Massachusetts wage and overtime laws. G.L.c. 149 §§ 148, 150. Plaintiffs Djhon Malebranche, Wiskinda Lamandier, Nicholas Pezzano, and Christopher Farias were employed as such salespersons. The First Amended Class Action Complaint (the Complaint) asserted both statutory violations (Counts I through V) and common law claims (Counts VI through IX). Defendants CAG and Gordon Chevrolet, Inc. (Gordon Chevrolet) moved to dismiss pursuant to Rule 12(b) (6), Mass.R.Civ. P. By the time of the motion hearing, the plaintiffs had voluntarily dismissed the common law claims, leaving only Counts I through V. As to those claims, CAG and Gordon Chevrolet contend that the Complaint fails to
allege facts sufficient to show that either of them ever employed plaintiffs.1 For the reasons set forth below, this Court concludes that the Motion must be Denied.
The Complaint sets forth the following allegations, which this Court assumes as true for purposes of this Motion.
CAG is a domestic corporation that manages and controls the business operations and employment matters for all of the sixteen automotive dealerships that comprise the “Colonial Automotive Group,” including Gordon Chevrolet, Colonial Nissan, Colonial Dodge, and Gordon Volkswagen. ¶¶ 5, 15. Gordon Chevrolet (formerly known as Gordon Chevrolet Geo) is a foreign corporation with a principal office in Acton, Massachusetts. ¶ 5. Colonial Nissan, Colonial Dodge, and Gordon Volkswagen are all domestic corporations with principal offices in Medford, Hudson, and Westborough, Massachusetts, respectively. ¶¶ 6-9. As sub-corporations or subsidiaries of CAG, the dealerships function as CAG’s agents. ¶ 36.
CAG and the dealerships all do business under the Colonial Automotive Group umbrella, and regularly sell cars to members of the public. ¶¶ 15-16, 34, 41. CAG controls, operates, oversees, and/or directs both the business and employment operations for the dealerships, including hiring and firing, creating and implementing payroll policies, overseeing employee performance, maintaining personnel and employment records, and controlling work schedules. ¶ 33. CAG also operates a general website for all of the dealerships, representing the group “as a single ‘dealership’ that actively employs over 600 employees.” ¶ 34.
1 Defendants also contended that the plaintiffs did not satisfy the statutory prerequisite of first filing a Wage Act complaint with the Attorney General’s Office. Plaintiffs have since amended the Complaint to eliminate this procedural issue.
With respect to Gordon Chevrolet, the Complaint alleges that Gordon Chevrolet assists CAG as its agent in the management and control of business and employment operations for all of the dealerships. ¶ 19. Additionally, plaintiffs Malebranche and Lamandier executed documents acknowledging their employment with Gordon Chevrolet. ¶¶ 49, 51. Malebranche’s document acknowledges an agreement with “Gordon Chevrolet Geo dba Colonial Chevrolet,” and Lamandier’s acknowledges an agreement with “Gordon Chevrolet Geo dba Colonial Nissan.” Id.
Malebranche, Lamandier, Pezzano and Farias were all employed as inside car salesmen who worked at different dealerships under the CAG umbrella. ¶¶ 1-4. They worked to sell cars on behalf of CAG and its dealerships. ¶¶ 1-4, 48, 50, 52-53. The defendants were aware that plaintiffs and other similarly situated sales employees often worked more than forty hours per week and on Sundays without receiving compensation required by the Wage Act. ¶¶ 55, 56, 62. This was the result of a “companywide practice and policy” of CAG and the dealerships. ¶ 54, 68.
In moving to dismiss Counts I through V, CAG and Gordon Chevrolet argue that the Complaint does not allege sufficient facts to show that either of them is an “employer” of the plaintiffs within the meaning of the Massachusetts Wage Act. The standard that this Court applies to this Rule 12(b) (6) motion is well established. Although the complaint must contain more than mere “labels and conclusions,” Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), the ultimate inquiry is whether the plaintiff has alleged facts that are “adequately detailed so as to plausibly suggest an entitlement to relief.” Greenleaf Arms Realty Trust, LLC v. New Boston Fund, Inc., 81 Mass. App. Ct. 282, 288 (2012) (reversing lower court’s allowance of 12
(b) (6) motion). Thus, that the complaint relies on facts that are improbable does not support dismissal so long as those allegations, “even if doubtful in fact,” “raise a right to relief above the speculative level.” Iannacchino, 451 Mass. at 636, quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). This Court must draw all reasonable inferences from those factual allegations in favor of the nonmoving party. See Iannacchino, 451 Mass. at 625 n.7, citing Nader v. Citron, 372 Mass. 96, 98 (1977). Finally, it is important to note that employment status is ordinarily a question of fact that can rarely be decided on a motion to dismiss. See Morris v. Massachusetts Maritime Academy, 409 Mass. 179, 194 (1991) (affirming lower court’s denial of motion to dismiss in part because whether an employer-employee relationship existed under the Jones Act was a question of fact). This Court concludes that the Complaint satisfies the 12(b) (6) standard.
In a recent decision, the Appeals Court applied two tests to determine whether the defendant was an “employer” within the meaning the Massachusetts Wage Act. Gallagher v. Cerebral Palsy of Mass., Inc., 92 Mass. App. Ct. 207 (2017). The first is a statutory test analyzing the employer-employee relationship according to G.L. c. 149, § 148B. The focus there is whether the plaintiff provided services to the defendant. Id. at. 210, quoting Sebago v. Boston Cab Dispatch, Inc., 471 Mass. 321, 329 (2015). The second is a common law test. Under this second test, a defendant who was not the direct employer of the plaintiff would nevertheless be considered the “joint employer” of the plaintiff where it “retained for itself sufficient control of the terms and conditions of employment of the employees who are employed by the other employer.” Id at. 214, quoting Commodore Health Ventures, Inc., 63 Mass.App.Ct. 57, 62 (2005). The Appeals Court noted that under either test, whether or not an employer-employee
relationship exists is ordinarily a question of fact and thus cannot easily be decided on a Rule 12(b) (6) motion.
Noting that the case before it was “not the ordinary case,” the court in Gallagher affirmed the lower court’s allowance of a motion to dismiss because an extensive regulatory framework governed the work arrangement at issue and the corresponding relationships between the various parties. The plaintiffs were personal care attendants who performed work in the homes of individual consumers covered by MassHealth. The defendant acted as a “fiscal intermediary agency” between MassHealth and the consumer. The Appeals Court concluded that the defendant was not an employer under the statutory test because the services were rendered to the individual consumers, not the defendant agency. The Court also concluded that the plaintiffs could not satisfy the common law test because the defendant did not exercise sufficient control over the plaintiff’s work: it was MassHealth, not the defendant, that set the plaintiffs’ work schedule and determined payroll policies. 2 In the instant case, no regulatory framework governs the employer-employee relationship of car sales employees at the Colonial Automotive Group dealerships, suggesting that whether such a relationship exists for purposes of the Wage Act is a question of fact. The issue is whether the Complaint pleads sufficient facts to satisfy the two tests described in Gallagher. This Court concludes that it does.
As to CAG, the Complaint alleges that all defendants, including CAG, sell cars to members of the public through sales employees such as the plaintiffs. ¶¶ 41, 20-31. Assuming these facts to be true, CAG thus receives the “services” of the plaintiffs. The Complaint also alleges that CAG maintains a common website for all of the dealerships, and holds itself out as a
2 Gallagher left open the question of whether the statutory “services” test entirely supplants the common law “control” test. In the absence of any appellate case that deals directly with this issue, this Court concludes that the common law test supplements the statutory test – that is, that both can be applied to determine if a defendant is an employer under the Wage Act.
single dealership with over 600 employees. CAG controls and manages the business operations and employment matters for all of the dealerships, which implement CAG employment policies and procedures, including those that pertain to wage and overtime compensation. Finally, plaintiffs attached to their memorandum in opposition certain agreements signed by plaintiffs Malebranche and Lamandier, apparently with CAG, which state among other things that failure to comply with “The Colonial Automotive Group’s information security policies and procedures” could result in “termination of my employment with The Colonial Automotive Group.” Although these documents are not specifically referenced in the Complaint and thus should not be considered on this 12 (b) (6) motion, they do indicate that if discovery were allowed to proceed, there may be further information that would support plaintiffs’ claim that they were employed by CAG.
Although a closer call, this 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.
For the foregoing reasons, the defendants’ Motion to Dismiss is DENIED. This case is scheduled for a Rule 16 conference November ___, 2018 at 2:00.
Janet L. Sanders
Justice of the Superior Court
Dated: October 19, 2017

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