Speen v. Crown Clothing Corp. , 102 F.3d 625 ( 1996 )


Menu:
  • United States Court of Appeals
    For the First Circuit
    No. 96-1402
    WILLIAM SPEEN,
    Plaintiff, Appellant,
    v.
    CROWN CLOTHING CORPORATION, RICHARD SILVERMAN,
    AND JACK SILVERMAN,
    Defendants, Appellees.
    APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF MASSACHUSETTS
    [Hon. Robert E. Keeton, U.S. District Judge]
    Before
    Cyr, Boudin and Stahl,
    Circuit Judges.
    Philip R. Olenick with whom Paul L. Nevins was on brief for
    appellant.
    Timothy P. Cox with whom John C. Wyman and Roche, Carens &
    DeGiacomo were on brief for appellees.
    December 23, 1996
    STAHL, Circuit Judge.  Plaintiff-appellant, William
    STAHL, Circuit Judge.
    Speen,  appeals from a district court judgment as a matter of
    law   in  favor   of   defendants-appellees  Crown   Clothing
    Corporation, Jack Silverman, and  Richard Silverman in an age
    discrimination and  pension rights suit involving his alleged
    wrongful   termination   in    violation   of   federal   and
    Massachusetts  law.     Because   Speen  failed   to  provide
    sufficient  evidence to support a finding that he was a Crown
    employee for  the purposes of his federal and state statutory
    claims,  or  evidence  sufficient  to  support  his remaining
    Massachusetts common law tort claims, we affirm.
    Background and Prior Proceedings
    Background and Prior Proceedings
    Speen began his career as a men's clothing salesman
    following his discharge from the U.S. Army in 1945.  Over the
    ensuing  twenty-seven years,  Speen served  as a  New England
    sales  representative for  various  companies.   In 1972,  he
    became a sales representative for Crown Clothing  Corporation
    ("Crown").  Jack and  Richard Silverman respectively serve as
    Crown's president and treasurer.
    For   the  next   twenty  years,   Speen  travelled
    throughout  New England  as  a  Crown representative  hawking
    Crown products  -- sports jackets, raincoats and  the like --
    to men's clothing stores.  For some of that time, Speen, with
    Crown's  approval, also  sold  non-competing lines  of  men's
    clothes from  other manufacturers,  most notably slacks.   By
    -2-
    2
    1992, however, Speen's  relationship with Crown  increasingly
    soured.  Speen's immediate supervisor, Jack  Silverman, often
    expressed his dissatisfaction with Speen's declining raincoat
    sales.    In December  1992,  Crown notified  Speen  -- first
    orally  and  then in  writing --  that  his service  would be
    terminated, effective the end of the month.  Crown went on to
    replace Speen, then  71 years old, with a new representative,
    aged 51.
    In  June 1993, unwilling  to accept Crown's adverse
    action,  Speen  filed  a  complaint  with  the  Massachusetts
    Commission Against Discrimination (MCAD).  Without benefit of
    any MCAD  determination that  would carry with  it preclusive
    effect, Speen filed  this suit in  federal district court  in
    November  1994.   Speen's  federal  action  claimed that  his
    termination amounted to unlawful age discrimination under the
    federal  Age  Discrimination  in  Employment  Act (ADEA),  29
    U.S.C.     621-634, and Mass. Gen. L. ch. 151B,   9, and also
    sought  pension rights  under the Employee  Retirement Income
    Security  Act (ERISA), 29 U.S.C.   1140.  Speen, in addition,
    advanced a  Massachusetts common  law tort claim  against the
    Silvermans,  alleging   a  tortious  interference   with  his
    advantageous business relationship with Crown.1
    1.  Speen  also asserted claims  under Massachusetts statutes
    governing minimum  wage, overtime  pay, and the  frequency of
    payment of wages. In its Memorandum and Order of May 9, 1995,
    the district court found these claims to be time-barred under
    the  respectively applicable  statutes of  limitations. Speen
    -3-
    3
    The matter proceeded  to trial before  a jury.   At
    the conclusion of plaintiff's evidence, the  defendants filed
    a motion for judgment as a  matter of law pursuant to Fed. R.
    Civ. P. 50(a) on essentially two grounds.  The first was that
    Speen was  not a  Crown employee,  but rather  an independent
    contractor  who enjoyed  no protection  under the  applicable
    statutory provisions.2   The  second was  that Speen had  not
    produced sufficient evidence to allow a jury to conclude that
    he was maliciously discharged because of his age in violation
    of Massachusetts common law.   The court granted  the motion,
    ordering a judgment for  the defendants on all claims.   This
    appeal ensued.
    For the reasons set  forth below, we reject Speen's
    arguments  concerning   the  employee/independent  contractor
    issue  and his Massachusetts common law  tort claims and thus
    affirm the district court's decision.
    subsequently voluntarily dismissed these claims.
    2.  Crown and the Silvermans had previously filed a motion to
    dismiss and a motion for summary judgment on  essentially the
    same  grounds. The district court denied both motions. At the
    summary judgment  hearing, the district court  noted that the
    undisputed   facts  "weigh[ed]   quite   heavily  toward   an
    evaluative determination of  independent contractor  status,"
    explaining  that it was "very likely that that's the way it's
    going to appear to  [the court] at the end of the plaintiff's
    evidence."  The   court   nonetheless  denied   the   motion,
    determining that  a more  appropriate time for  resolving the
    employee/independent contractor  issue would be at  the close
    of the plaintiff's  evidence in connection with a  motion for
    judgment as a matter of law.
    -4-
    4
    Standard of Review
    Standard of Review
    We review  de novo  a district court's  decision to
    grant judgment as a matter of law pursuant to Rule 50(a).  In
    exercising that  plenary review, we use  "the 'same stringent
    standard  incumbent  upon  the   trial  court  in  the  first
    instance.'"   Greenberg v. Union  Camp Corp., 
    48 F.3d 22
    , 26
    (1st Cir. 1995)  (quoting Favorito v.  Pannell, 
    27 F.3d 716
    ,
    719 (1st Cir. 1994)).
    We  thus consider the  evidence and  the reasonable
    inferences that  are to be  drawn from it  in the light  most
    favorable to the party opposing the motion, in this case, the
    plaintiff.   A motion for a  judgment as a matter  of law "is
    proper  at  the  close  of  plaintiffs'  case  only  when the
    plaintiffs' evidence, viewed in  this light, would not permit
    a reasonable  jury to find in favor  of the plaintiffs on any
    permissible claim  or theory."   Murray  v. Ross-Dove Co.,  
    5 F.3d 573
    , 576 (1st Cir. 1993).
    The Employee/Independent Contractor Issue
    The Employee/Independent Contractor Issue
    Crown contends that Speen cannot sue under the ADEA
    or  the Massachusetts anti-age  discrimination statute, Mass.
    Gen. L. ch. 151B, because, for purposes of those statutes, he
    is  not  a  covered  "employee," but  rather  an  unprotected
    "independent contractor."    Speen vigorously  disputes  this
    contention and  further argues that  the issue of  his proper
    classification, in  any event,  was a  question for the  jury
    -5-
    5
    that should not have been decided by the district  court on a
    Rule 50(a) motion.
    Both  federal and  Massachusetts courts  have found
    that the federal  and Massachusetts statutes  prohibiting age
    discrimination   in  employment  do   not  reach  independent
    contractors.  See Robinson  v. Overseas Military Sales Corp.,
    
    21 F.3d 502
    ,  509 (2d  Cir. 1994); Hayden  v. La-Z-Boy  Chair
    Co., 
    9 F.3d 617
    , 619 (7th Cir. 1993); Daughtrey v. Honeywell,
    Inc.,  
    3 F.3d 1488
    ,  1495-96 (11th  Cir.  1993); Oestman  v.
    National Farmers Union Ins.  Co., 
    958 F.2d 303
    ,  304-05 (10th
    Cir.  1992); Garrett v.  Phillips Mills, Inc.,  
    721 F.2d 979
    ,
    980  (4th  Cir. 1983);  Comey v.  Hill,  
    438 N.E.2d 811
    , 814
    (Mass.  1982).     See   generally,  Francis   M.  Dougherty,
    Annotation, Who, Other Than Specifically Excluded Persons, Is
    "Employee"  Under      4(a)(1)  Of   Age  Discrimination   in
    Employment Act Of 1967 (29 USCS   623(a)(1)), 
    125 A.L.R. Fed. 273
    , 287-89 (1995) (collecting federal cases).
    The salience of the employee/independent contractor
    distinction in age discrimination cases thus  is clear.  Less
    easily  discernible,  however,  are  the  tests  federal  and
    Massachusetts law use to  distinguish a covered employee from
    an unprotected independent contractor.
    1. Employee Status Under Massachusetts Law
    In   interpreting  the   Commonwealth's  employment
    discrimination law,  Mass. Gen.  L.  ch. 151B,  Massachusetts
    -6-
    6
    courts use a common law test to distinguish employees who are
    covered by  the statute from independent  contractors who are
    not. Comey, 438 N.E.2d at 814.  The parties in this case both
    concede this point.  Where they differ is in their assessment
    of what factors Massachusetts courts  look to in applying the
    common  law test.  Speen argues that a claimant is considered
    an employee under Massachusetts  law if he can show  that the
    employer enjoyed the right to control his labor.  This, Speen
    contends, he can do.  In particular, he argues he was a Crown
    employee because he had to call in his orders every night and
    fill out special Crown order forms.  Crown responds that this
    type  of  activity  does  not  make  one  an  employee  under
    Massachusetts law, since  a mere showing  of some element  of
    control  is  not  conclusive  under  the  multifactored  test
    Massachusetts courts use to determine employee status.
    Speen  points  to older  Massachusetts  cases which
    indicate that the  test of  employee status is  the right  to
    control.   McDermott's Case, 
    186 N.E. 231
    , 232  (Mass. 1933)
    ("The  exact point  at issue  is whether  the claimant  was a
    servant  or  employee, or  an  independent  contractor.   The
    essence of  the distinction is  the right of  control. . .  .
    Other  considerations and  tests are  important only  as they
    bear upon the right of  control."); Khoury v. Edison Electric
    Illuminating Co., 
    164 N.E. 77
    , 78 (Mass. 1928) ("Although the
    conclusive test of  the relationship of master and servant is
    -7-
    7
    the  right  to control,  other factors  may be  considered in
    determining whether the right to control exists, but they are
    subordinate to this primary test.").
    Upon  initial inspection,  the  language  in  these
    cases  would  seem to  support  Speen's  contention that  the
    district court misstated  the relevant Massachusetts standard
    when  it concluded  that Massachusetts  uses a  multifactored
    analysis   in   distinguishing  employees   from  independent
    contractors.  A closer reading of the cases and consideration
    of  later  Massachusetts  decisions,  however,  dispels  this
    conclusion.
    In  McDermott's   Case,  for  example,   the  court
    explained that an independent  contractor is one "not subject
    to direction and  control as to every detail of  the work" to
    be performed.  Conversely,  an employee is one who  "at every
    moment,  with  respect  to every  detail.  .  .  is bound  to
    obedience and subject to direction and control."  McDermott's
    Case,  186  N.E. at  232.   The  Khoury court  explained this
    feature of the Massachusetts common law test as follows: "the
    employee must be subject to control by the employer, not only
    as to the result to be  accomplished but also as to the means
    to be used."  Khoury, 164 N.E. at 78.
    Such  language,  gleaned  from  the  decisions upon
    which Speen's  counsel relies, indicates the  great degree to
    which  Speen and  Massachusetts courts mean  rather different
    -8-
    8
    things  when  they refer  to  "right of  control"  within the
    context  of the  common law test.   Simply put,  the level of
    employer  control ("at  every moment,  with respect  to every
    detail")  necessary to conclusively establish employee status
    without  looking  to  any  of  the  additional  "subordinate"
    factors is such that, as a practical matter, one may speak of
    the common law test as being a multifactored one.
    Subsequent   Massachusetts   case  law,   in  fact,
    acknowledges as  much.  While recognizing the vitality of the
    common  law test  in  Massachusetts, for  example, the  Comey
    court explained  that "[t]rial  judges  should carefully  and
    fully instruct juries on  all the factors that may  be useful
    in  distinguishing  employees from  independent contractors."
    Comey, 438 N.E.2d at  815.  This language indicates  that the
    common  law test in Massachusetts, as  in other states, while
    directed towards  the question of right  of control, involves
    the assessment of multiple factors.  See Restatement (Second)
    of  Agency   220 (1957).  Indeed, the Comey court immediately
    goes  on  to  cite  with  approval federal  cases  which,  it
    explains, "list[]  factors  which may  distinguish  employees
    from independent contractors."  Id.
    Confronted with such language,  lower Massachusetts
    courts have proceeded on the view that
    [i]n  the  employment context,  a master-
    servant relationship is  determined by  a
    number of factors, including the right of
    the  employer to  control the  details of
    -9-
    9
    the work done by the employee, the method
    of  payment, the  skill  required in  the
    particular   occupation,    whether   the
    employer     supplies     the      tools,
    instrumentalities and place  of work,  as
    well  as the  parties' own  belief as  to
    whether  they  are  creating   a  master-
    servant relationship.
    Chase  v. Independent  Practice  Ass'n, 
    583 N.E.2d 251
    ,  253
    (Mass. App. Ct. 1991).
    The  district  court  thus  did  not  err  when  it
    determined this multifactored approach  to be the  applicable
    legal test  in Massachusetts.  Contrary  to Speen's assertion
    that  the district  court  found  that "subordinate"  factors
    might outweigh the existence of a right of control, the state
    cases  tell us  that Massachusetts  courts make  the employee
    determination in this way only when a right of control is not
    conclusively   established  and  other  factors  need  to  be
    examined.  Given how Massachusetts precedent discusses "right
    of control" in its  technical sense, this would seem  to mean
    the  multifactored test  is triggered  when employer  control
    does not  encompass the person  hired "at every  moment, with
    respect to every detail."  McDermott's Case, 186 N.E. at 232.
    It is  thus not  so much  the case that  additional
    "subordinate" factors might outweigh the existence of a right
    of  control  (as  Speen  wrongly contends  was  the  district
    court's  view) as  it is  that the  failure to  demonstrate a
    "right of control" in the narrowly-defined technical sense of
    that term serves as the  gateway to a multifactored analysis.
    -10-
    10
    This  analysis,  in  turn, does  not  ignore  but takes  into
    account  the  level  of  control present  in  the  employment
    relationship despite the fact that this control, taken alone,
    would not be enough to establish employee status.
    2. Employee Status Under the ADEA
    Federal courts  have used at least  three different
    tests  to determine whether a  claimant is a covered employee
    rather than an unprotected independent contractor under anti-
    discrimination acts such as the ADEA.  The  first test is the
    traditional common law  test of agency  which focuses on  the
    employer's right of  control using a  multifactored analysis.
    See Frankel v. Bally, Inc., 
    987 F.2d 86
     (2d Cir. 1993).  The
    second test  -- typically more expansive --  is the "economic
    realities" test, which holds that "employees are those who as
    a matter of economic reality are dependent upon  the business
    to which they  render service."   Bartels v. Birmingham,  
    332 U.S. 126
    , 130  (1947); Doty  v. Elias, 
    733 F.2d 720
    ,  722-23
    (10th Cir. 1984).   The third test is  a "hybrid" test, which
    considers   the  economic   realities   of   the   employment
    relationship but retains  a focus on the employer's  right to
    control.  See Oestman v. National Farmers Union Ins. Co., 
    958 F.2d 303
     (10th Cir. 1992).
    The First Circuit has not previously  decided which
    test to  apply to the ADEA.   In view of  the Supreme Court's
    unanimous decision in Nationwide Mut. Ins. Co. v. Darden, 503
    -11-
    
    11 U.S. 318
      (1992),  we now  adopt  the  common  law test  for
    determining who qualifies as an "employee" under the ADEA and
    expressly  hold that  covered  employees under  the ADEA  are
    those  who  are   employees  under  traditional   agency  law
    principles.
    While the Supreme Court has not directly determined
    this  issue,  the   Court  in  Darden   faced  the  task   of
    interpreting a  definition of  "employee" found in  ERISA, 29
    U.S.C.   1002(6) ("any  individual employed by an employer"),
    that is virtually  identical to  that found in  the ADEA,  29
    U.S.C.    630(f) ("an individual employed  by any employer").
    See Darden, 503  U.S. at 323.   The Court found this to  be a
    "nominal  definition"  that   "is  completely  circular   and
    explains  nothing." Id.    In the  absence  of any  provision
    suggesting a contrary  congressional design or an  indication
    that  "absurd results" would follow,  the Court took the view
    that the term "employee"  should be interpreted in accordance
    with traditional agency law principles:
    "[w]here  Congress  uses terms  that have
    accumulated  settled  meaning under.  . .
    the  common  law,  a  court  must  infer,
    unless  the  statute otherwise  dictates,
    that  Congress  means to  incorporate the
    established meaning of these terms. . . .
    In the past,  when Congress has used  the
    term 'employee' without  defining it,  we
    have concluded that Congress  intended to
    describe the conventional  master-servant
    relationship as  understood by common-law
    agency doctrine."
    -12-
    12
    Darden,  503  U.S.  at  322-23 (internal  citations  omitted)
    (quoting Community  for  Creative Non-Violence  v. Reid,  
    490 U.S. 730
    , 739-40 (1989) (internal quotation marks omitted)).
    To  help avoid  any  confusion on  the matter,  the
    Darden Court  went on to  summarize the operative  common law
    test with the following language:
    "In  determining whether a hired party is
    an employee under  the general common law
    of agency, we consider the hiring party's
    right to  control the manner and means by
    which the product is  accomplished. Among
    the  other  factors   relevant  to   this
    inquiry  are  the  skill   required;  the
    source   of  the   instrumentalities  and
    tools;  the  location  of  the  work; the
    duration of the relationship  between the
    parties; whether the hiring party has the
    right  to  assign additional  projects to
    the hired party; the  extent of the hired
    party's discretion over when and how long
    to work; the method of payment; the hired
    party's   role   in  hiring   and  paying
    assistants; whether  the work is  part of
    the regular business of the hiring party;
    whether  the hiring party is in business;
    the provision of  employee benefits;  and
    the tax treatment of the hired party."
    
    Id.,
     503 U.S.  at 323-24  (quoting Reid, 
    490 U.S. at 751-52
    (footnotes omitted)).
    The Court  went on  to stress that  the common  law
    test  requires   that  "[']all   of  the  incidents   of  the
    relationship must be assessed and weighed with no one  factor
    being decisive.'"  Darden,  503 U.S. at 324 (quoting  NLRB v.
    United Ins. Co. of America, 
    390 U.S. 254
    , 258 (1968)).
    -13-
    13
    We conclude  that the Court's opinion  in Darden is
    sufficiently  clear to remove doubt as to the identity of the
    proper  standard and  its contours.   We  therefore disregard
    decisions  in  those circuits  that  have employed  standards
    other  than the  common  law test  in  determining whether  a
    claimant was a covered  employee under the ADEA.   See, e.g.,
    Oestman,  
    958 F.2d at 305
      (the Tenth  Circuit  applying the
    hybrid test in determining whether  an insurance agent is  an
    employee  under the ADEA).   But see Frankel  v. Bally, Inc.,
    
    987 F.2d 86
    , 90 (2d Cir. 1993) (holding that, in  the wake of
    Darden,  the traditional common  law test for  agency must be
    applied to the ADEA instead of the hybrid standard).
    The  Darden  decision also  circumscribes otherwise
    suggestive language  in First  Circuit case  law interpreting
    federal  employment  legislation  such  as   the  Fair  Labor
    Standards  Act (FLSA).  In  earlier decisions, this court has
    looked to a line of Supreme Court  precedent interpreting the
    FLSA and Social  Security Act  to reach the  view that  "[i]n
    determining employer status, 'economic reality' prevails over
    technical  common law concepts of agency."  Donovan v. Agnew,
    
    712 F.2d 1509
    ,  1510  (1st Cir.  1983)  (FLSA case)  (citing
    Goldberg v.  Whitaker, 
    366 U.S. 28
    , 33  (1961) (FLSA  case)
    (citing  United States  v.  Silk, 
    331 U.S. 704
    , 713  (1947)
    (Social  Security  Act case)  and  Rutherford  Food Corp.  v.
    McComb, 
    331 U.S. 722
    , 729 (1947) (FLSA case))).
    -14-
    14
    This  line  of cases  essentially adopted  the non-
    common law  view we considered above,  namely that "employees
    are those who as  a matter of economic reality  are dependent
    upon  the business to which they render service."  Bartels v.
    Birmingham,  
    332 U.S. at 130
    .   The  Darden Court,  however,
    explicitly differentiated  the definitions of  employee found
    in the FLSA from  that in ERISA, which virtually  mirrors the
    ADEA in  this regard.  See  Darden, 503 U.S. at  325-26.  The
    Court's analysis  of the difference between  these two pieces
    of   legislation   suggests  that   this   circuit's  earlier
    pronouncements in  FLSA cases like Donovan  concerning use of
    the "economic  reality" test  in determining employee  status
    may  need to  be confined to  the FLSA context  in which they
    were first enunciated.  In any  event, in view of the Court's
    express reasoning  in Darden, we feel  confident in reasoning
    that the  "economic reality" test cannot  be readily imported
    into the ADEA context, either  on its own or as part  of some
    "hybrid"  test   that  amalgamates  the   "economic  reality"
    standard and the traditional common law approach.
    3.  Speen's Status Under the ADEA and Mass. Gen. L.
    ch. 151B
    Based  on our  review of  the relevant  federal and
    state  precedent,  we  are  of  the  view  that  federal  and
    Massachusetts  law  use  roughly  identical  tests  based  on
    traditional  agency  law principles  to  determine whether  a
    -15-
    15
    claimant  in  an  age  discrimination  suit  is  a  protected
    employee.
    There may be some  question whether the federal and
    state tests  are employed in exactly the  same way in view of
    some  of the  language  in older  Massachusetts decisions  we
    considered above.  These earlier opinions speak of  the right
    of  control  as  if it  were  a  predominant  factor that  is
    considered  before  and  above   others,  at  least  in  some
    instances.  This way  of employing the multifactor test  runs
    counter  to  instructions  the  Supreme  Court  reiterated in
    Darden,  503  U.S.  at 324  ("all  of  the  incidents of  the
    relationship must be assessed and  weighed with no one factor
    being  decisive.") (internal  quotations  omitted).   To  the
    extent any  divergence between the federal  and Massachusetts
    multifactor test might exist,3 it would seem to involve cases
    in  which  a hired  party is  subject  to the  "direction and
    control" of the hiring party  "at every moment, with  respect
    to every detail."  McDermott's Case, 186 N.E. at 232.
    A  review of  the  record,  however,  reveals  that
    Speen's claim does not present such a case.   The record does
    not contain  evidence that  even remotely suggests  Speen was
    subject  to the  "direction and control"  of Crown  "at every
    3.  As we more fully explained above, we are  not sure such a
    difference  exists since  more recent  Massachusetts opinions
    cite  federal cases and the Restatement (Second) of Agency in
    support of their discussion.
    -16-
    16
    moment, with respect to every detail."  We are thus convinced
    that  federal  and  Massachusetts  law  confront  Speen  with
    multifactored tests concerning employee status that are, as a
    practical matter, indistinguishable.
    Looking   at   the   record   with    this   common
    multifactored test  in  mind  --  even through  a  lens  that
    requires  us  to consider  the  evidence  and the  reasonable
    inferences that are  to be  drawn from it  in the light  most
    favorable  to Speen  as the  non-moving party --  we conclude
    that the district court  correctly granted Crown's motion for
    a  judgment as  a  matter  of law  on  the  federal ADEA  and
    Massachusetts statutory age discrimination claims.
    We  do  not see  how  the jury  was  presented with
    evidence sufficient  to support a  finding that Speen  was an
    employee  rather  than an  independent  contractor.   Speen's
    counsel  vigorously  argues   that  the  evidence   presented
    established that Crown kept Speen on a "short leash" and that
    he  had  to  obey   "onerous  work  rules."    The   evidence
    overwhelmingly  shows,  however, that  Speen  was  kept on  a
    rather long leash, if not  actually allowed to run free in  a
    rather large yard, and was  allowed to follow procedures that
    afforded  him the  type of  independence for  which employees
    typically yearn.
    We first  call attention to  the substantial number
    of  factors that, as the  district court rightly noted, weigh
    -17-
    17
    in favor of  a finding that  Speen's relationship with  Crown
    was  that of an independent contractor.  The evidence reveals
    that  Speen himself  decided where  he went  and how  long he
    worked on  any particular  day.   How  and in  what order  he
    covered his territory was something he determined.  Speen was
    not required to  report to  a Crown  place of  business on  a
    daily  basis;  in fact,  he  appeared  at  a  Crown  location
    infrequently during the year.
    Furthermore,  Speen  was   not  required  to  carry
    anything, do anything,  or say anything  in particular as  he
    went  about  trying  to  sell  Crown  (and  other)  products.
    Although Crown  provided Speen with some  business cards that
    announced him as a Crown representative and also provided him
    with samples  that he was free  to use in attempting  to make
    sales, the  evidence does  not indicate that  Crown compelled
    Speen to do  anything in particular or somehow controlled the
    manner  in which Speen attempted to sell men's clothing.  The
    fact that Speen was paid on a commission basis also weighs in
    favor of a finding of independent  contractor status, as does
    the fact that  he received  Form 1099s rather  than W-2s  for
    federal tax purposes.
    Moreover,  Speen  had  early  on   told  his  Crown
    supervisors he wished  to be  treated as an  employee and  in
    particular  wished   to  be  enlisted   in  Crown's  employee
    retirement  pension plan.   Crown  refused and  gave  Speen a
    -18-
    18
    take-it-or-leave-it   response,   but  Speen   continued  his
    relationship with Crown.  He did not reject what was offered;
    rather, he accepted it and worked under this regimen for many
    years.  The parties' understanding and Speen's exclusion from
    Crown's employee pension plan  thus represent two  additional
    factors  that weigh  in  favor of  a  finding of  independent
    contractor status.
    Several other salient factors were  also present in
    the   Speen-Crown  relationship,   but  the   district  court
    correctly noted that they  are all compatible with  either an
    independent  contractor  or  employee  relationship.    Thus,
    although Speen was  required to phone Crown  daily and report
    his sales and  the calls  he had made,  typically by  leaving
    information  on an  answering  machine,  this arrangement  is
    equally compatible  with the status of  either an independent
    contractor or employee.
    Crown required Speen to attend two sales meetings a
    year that  featured the introduction of the new season's line
    of clothing.   He  also was  required to  fill out orders  he
    obtained on forms that Crown provided.  Speen also decided to
    stop  selling non-Crown  items  once he  reached one  million
    dollars in sales on  Crown's line of products.   The district
    court correctly noted that  these features of the Speen-Crown
    relationship  are   essentially  neutral  in   terms  of  the
    multifactor  test,  since they  are  equally compatible  with
    -19-
    19
    either  an employee  or independent  contractor status.   The
    evidence  developed at  great and  tedious length  during the
    plaintiff's case  on these points thus  did not significantly
    advance Speen's view of his relationship with Crown.
    On the other hand,  the evidence presented  reveals
    not  only  that  Speen  did  accept  the  take-it-or-leave-it
    proposition  Crown offered him, but  also that he  went on to
    form a corporation, Newton Company, Inc. ("Newton"), of which
    he became an employee.  Some dispute exists  in the record as
    to  the  reason  behind  Speen's decision  to  establish  the
    corporation, but  its  function  is  uncontroverted.    Crown
    issued  checks made out jointly  to Newton and  Speen for the
    commissions  Speen's services  earned, and  Newton, in  turn,
    paid Speen.   The  district court  correctly noted  that this
    fact, while not conclusive in any specific sense, constituted
    an additional factor militating against a finding of employee
    status.
    Under  the  multifactored  test, we  conclude  that
    there was not enough  evidence from which a  factfinder could
    make  a  reasoned determination  in  favor  of  Speen on  the
    question of whether he  was a Crown employee for  purposes of
    the  ADEA or Massachusetts law.   As the  district court ably
    determined,  a finding  for the  plaintiff would  not comport
    with the applicable legal standard governing employee status.
    The ERISA Claim
    The ERISA Claim
    -20-
    20
    The  preceding  analysis also  disposes  of Speen's
    ERISA  claim.   In  view  of  the  Supreme Court's  unanimous
    interpretation of the term "employee"  in Darden, 503 U.S. at
    323, Speen  can be considered an employee  for ERISA purposes
    only  if we so find using the same  test we have just used to
    determine that he is  not an employee for ADEA purposes.   We
    conclude, therefore, that Speen's  ERISA claim fails for lack
    of standing.
    The Massachusetts Common Law Tort Claims
    The Massachusetts Common Law Tort Claims
    Speen   finally   appeals  the   district  court's
    disposition  of   his   Massachusetts  common   law   claims.
    Specifically,   he  alleged   that  the   Silverman  brothers
    tortiously interfered with his advantageous relationship with
    Crown.  The district court entered  a judgment as a matter of
    law  in favor of the defendants  on the tortious interference
    claim as well.
    Under  established  Massachusetts jurisprudence,  a
    plaintiff   suing  for   relief  on   a  claim   of  tortious
    interference must prove the  existence of the following: "(1)
    a business relationship or  contemplated contract of economic
    benefit;   (2)  the   defendant's  knowledge   of  such   [a]
    relationship; (3) the  defendant's intentional and  malicious
    interference with  it; (4) the plaintiff's  loss of advantage
    directly resulting from the defendant's conduct."  Comey, 438
    -21-
    21
    N.E.2d  at 816 (citing Owen v. Williams, 
    77 N.E.2d 318
     (Mass.
    1948)).4
    Importantly, for our  purposes here,  Massachusetts
    case  law indicates that this  tort claim does  not require a
    finding  that  the  plaintiff  was an  employee,  but  rather
    encompasses independent contractors as  well.  See Comey, 438
    N.E.2d at 816-17.   This lifts the barrier that  proved fatal
    to Speen's federal and state statutory claims.
    The  tort  of  interference  with  an  advantageous
    relationship,  of  course,  does  not recognize  a  right  to
    lifetime   tenure  or  a   perpetual  business  relationship.
    Massachusetts case law discussing the claim in the context of
    discharge cases explains that companies and their supervisors
    have the right  to fire  or terminate the  services of  hired
    parties so long as they do not do so "malevolently, i.e., for
    a  spiteful, malignant purpose,  unrelated to  the legitimate
    corporate interest."   Wright  v. Shriners Hosp.,  
    589 N.E.2d 1241
    , 1246  (Mass. 1992)  (quoting Sereni v.  Star Sportswear
    Mfg.,  
    509 N.E.2d 1203
    , 1206  (Mass. App. Ct.  1987)).  Under
    4.   Massachusetts  courts have  recently stated  a plaintiff
    must prove:  "(1) he had  a contract with a  third party; (2)
    the defendant knowingly induced the third party to break that
    contract;  (3) the  defendant's interference, in  addition to
    being intentional, was improper  in motive or means; and  (4)
    the plaintiff was harmed by the defendant's actions."  Wright
    v.  Shriners  Hosp.,  
    589 N.E.2d 1241
    ,  1245  (Mass.  1992)
    (quoting  G.S. Enterprises  v.  Falmouth  Marine, 
    571 N.E.2d 1363
    , 1369 (Mass. 1991)).  We do not believe this more recent
    formulation changes our analysis.
    -22-
    22
    Massachusetts law, corporations  and corporate officers  thus
    possess both a qualified privilege and a corresponding "duty"
    to shareholders  to discharge hired parties  when those hired
    "d[o]  not measure  up to the  job."   Sereni, 
    509 N.E.2d at 1206
    .
    This  qualified  privilege  and  concomitant  duty,
    necessarily,  are  not unbounded.    The  privilege does  not
    excuse unlawful  malevolence or  malice in connection  with a
    decision to discharge a  hired party.  Whether the  requisite
    malice  exists for a defendant  to be held  liable under this
    cause of action "depends on the  evidence in each case and on
    what  the  trier  of  fact may  reasonably  infer  from  that
    evidence."   Gram v. Liberty Mut. Ins. Co., 
    429 N.E.2d 21
    , 24
    (Mass. 1981).  For our purposes, it is only important to note
    that Massachusetts courts treat  a showing of intentional age
    discrimination  as sufficient  to  meet the  proof of  malice
    needed  for recovery under this  tort claim.   See Comey, 438
    N.E.2d at 816-17.
    Thus, our  inquiry turns to whether Speen presented
    sufficient  evidence of  age  discrimination  to require  the
    question to be put to the  jury.  For reasons that follow, we
    conclude he did not.
    In reaching  this result, we focus  both on Speen's
    proffered  statistical arguments  regarding the  treatment of
    other  Crown  salesmen and  his  alleged  direct evidence  of
    -23-
    23
    discriminatory motive.   On the issue  of use of  statistical
    evidence,  our cases5 establish that a plaintiff need not and
    "should  not be  required  to produce  'smoking-gun' evidence
    before prevailing  in a discrimination suit.   There are many
    veins  of circumstantial  evidence  that may  be  mined by  a
    plaintiff  to  this end.   These  include  . .  . statistical
    evidence  showing  disparate  treatment by  the  employer  of
    members  of the protected  class."  Mesnick  v. General Elec.
    Co., 
    950 F.2d 816
    , 824 (1st Cir. 1991).  Massachusetts courts
    have  allowed  the  use  of indirect  evidence  of  disparate
    treatment,  including  evidence  concerning  "the  employer's
    general  practices  and  policies  concerning  employment  of
    [protected classes]."   Lewis  v.  Area II  Homecare For  Sr.
    Citizens, 
    493 N.E.2d 867
    , 872 (Mass. 1986).
    The  difficulty   with  Speen's  attempts   to  use
    statistical  evidence  was not  in  what  he  was  trying  to
    accomplish but rather how.  In particular, Speen attempted to
    rely on evidence that compared Crown's treatment of Speen and
    Speen's  sales figures  with other  members of  Crown's sales
    force.   Other  testimony,  however,  established that  Crown
    5.   For the  purposes of  evaluating the  age discrimination
    issue   we  of   course  focus   on  relevant   Massachusetts
    precedents. To the extent, however, that Massachusetts courts
    approvingly  cite  federal cases  in discussing  the criteria
    concerning proof  of discrimination, we turn  to federal case
    law  where necessary or fruitful. See, e.g., Lewis v. Area II
    Homecare  For Sr. Citizens, 
    493 N.E.2d 867
    , 872 (Mass. 1986)
    (citing  McDonnell Douglas Corp. v. Green, 
    411 U.S. 792
    , 804-
    05 (1973)).
    -24-
    24
    expected  different results from differently positioned sales
    representatives,  depending on their  territory, whether they
    were new to  a territory, and other factors.   In turn, Speen
    failed  to  explain  why  the  group  that  he  selected  for
    treatment  was  an  appropriate  and  representative  sample.
    Judge  Keeton  correctly  characterized  Speen's  statistical
    method  as   one  involving  "simply  picking   out  whatever
    employees  the  plaintiff  wants  to pick  out  from  all the
    evidence before the court,  treat[ing] those as if they  were
    the only instances, and urg[ing] the  jury to draw inferences
    of age  discrimination from  that comparison."   Judge Keeton
    was right in saying,
    That  won't  do....[I]t  doesn't take  an
    expert    on   statistical    method   to
    understand  that  of  course  [it]'s  not
    appropriate to limit yourself [to some of
    the  population]  when you're  looking at
    evidence  for the  purpose of  drawing an
    inference from a statistical distribution
    to pick  only a few [people]  rather than
    some[ number]  that can be  shown in some
    way on a reasoned basis to be at least  a
    representative    sample    if   not    a
    consideration of all the evidence.
    Numbers selected in such an unreasoned  fashion are
    not   sufficient  to   support   a  reasoned   inference   of
    impermissible  discrimination.    Ironically,   the  evidence
    presented weighs against the  finding of disparate  treatment
    that  Speen sought to prove.  Out  of a sales force of twenty
    people, all  five salesmen  over the  age of  70 at the  time
    Speen was discharged in December  1992 were still selling for
    -25-
    25
    Crown at  the time of  the trial  of Speen's  claim in  March
    1996.    Combined  with  the  fact  that  no  other  salesmen
    experienced a larger  decline in sales than  Speen during the
    five year period  1987-1992, this part  of the evidence  does
    not permit a reasoned  inference either of age discrimination
    or  that  Crown's  proffered  reason  for  terminating  Speen
    (declining and unsatisfactory sales figures) was pretextual.
    Contrary to Speen's assertions, a different result
    does not  obtain if we  consider Speen's testimony  about the
    alleged  statement  that  Jack  Silverman  made  when   Speen
    allegedly  asked Silverman  to justify  the decision  to fire
    him:  "Why do I need a 71 year old when I can have a 51  year
    old?"  This piece of  evidence, which we must credit  as true
    in view of the requirement that we review the evidence in the
    light most favorable to the nonmoving party, would  still not
    enable a jury to  draw a reasonable inference that  Speen was
    fired due to his age.
    In   reaching  this   conclusion,  we   first  call
    attention  to the  line  of Massachusetts  and federal  cases
    which indicate that "'isolated  or ambiguous remarks, tending
    to suggest  animus based  on age, are  insufficient, standing
    alone, to prove an employer's discriminatory intent.'"  Blare
    v.  Husky Injection  Molding Sys.,  
    646 N.E.2d 111
    , 118  n.9
    (Mass.  1995) (quoting  Fontaine v.  Ebtec Corp.,  
    613 N.E.2d 881
    , 885 n.7 (Mass. 1993) (citing Gagne v. Northwestern Nat'l
    -26-
    26
    Ins. Co., 
    881 F.2d 309
    , 314 (6th Cir. 1989) and Leichihman v.
    Pickwick Int'l, 
    814 F.2d 1263
    , 1271 (8th Cir.), cert. denied,
    
    484 U.S. 855
     (1987))).  See Lehman v. Prudential Ins.  Co. of
    America, 
    74 F.3d 323
    , 329 (1st Cir. 1996).
    Speen's counsel argues that  the statement was  not
    isolated or ambiguous but  rather constitutes direct evidence
    of  age   discrimination  and  reveals  that   the  protected
    characteristic --  age  -- was  a  motivating factor  in  the
    decision  to  fire him.   Speen's  counsel  thus urges  us to
    conclude that "even standing alone the plaintiff's  quotation
    of Jack  Silverman's comment to him, 'Why do I need a 71 year
    old  when I can have  a 51 year  old' is, if  credited by the
    jury, sufficient toprove .. . [Speen]was fireddue to hisage."
    We  reach a  contrary result  because the  relevant
    case law instructs us not to consider the  statement standing
    alone  but instead to look  at all the  evidence presented in
    the  totality of the circumstances.   In other  words, a fact
    finder looking solely at  the statement "Why  do I need a  71
    year  old  when I  can  have a  51  year old"  could  reach a
    reasonable inference that Speen was fired because of his age.
    But that is not this case.   If we consider this statement in
    the  context of all the evidence presented, which we must do,
    since we are  not afforded the luxury  of selectively picking
    and choosing what evidence we will consider, we conclude that
    Judge   Keeton  was   correct  in   ruling  that   there  was
    -27-
    27
    insufficient  evidence  for  a  jury  to  draw  a  reasonable
    inference  that Speen  was fired due  to his age  or permit a
    reasonable  inference  that   Crown's  proffered  reason  for
    terminating   Speen   (declining  and   unsatisfactory  sales
    figures) was pretextual.
    To  the extent  that we  reach a  different outcome
    than  the  one Speen  urges,  Speen's mistaken  view  of what
    precedent requires  a court to do  in a case like  the one at
    bar  explains this  difference.   Speen correctly  notes that
    proffered    direct    evidence   of    unlawful   employment
    discrimination  removes a claimant's case from the well-known
    McDonnell Douglas  three-part test for  discrimination (prima
    facie  case, legitimate business justification, and rebuttal)
    operative in  essentially the same way  in both Massachusetts
    and federal courts.  We have indicated as much.  See Smith v.
    F.W.  Morse & Co., 
    76 F.3d 413
    ,  421 (1st Cir. 1996) ("On the
    relatively rare occasions when a smoking gun is discernible -
    - that is, when a plaintiff produces direct evidence that the
    protected  characteristic was  a  motivating  factor  in  the
    employment  action  --  the McDonnell  Douglas  framework  is
    inapposite."); see  also Smith v. Stratus  Computer, Inc., 
    40 F.3d 11
    , 15 (1st Cir. 1994).
    Notwithstanding  what Speen would  have us believe,
    the  fact  that  the  familiar framework  that  guides  cases
    involving indirect, circumstantial evidence of discrimination
    -28-
    28
    may  be  inapposite  here   does  not  conclude  the  matter.
    Specifically, whether Silverman's alleged  statement actually
    constitutes direct evidence  of discriminatory motive remains
    somewhat of an open question, since the line in the  case law
    between  what  constitutes  direct and  indirect  evidence of
    discriminatory motive  is blurred rather than  clearly drawn.
    See Smith, 
    76 F.3d at 421
    .  References to "smoking guns"  can
    thus be less  than fruitful  to the extent  they obscure  the
    fact  that this  Circuit  has  yet  to  define  clearly  what
    constitutes direct  evidence of discrimination.   See  Ayala-
    Gerena  v. Bristol Myers-Squibb Co., No. 95-1867, slip op. at
    17 (1st Cir. September 5, 1996) (citing Smith, 
    76 F.3d at 431
    (Bownes, J., concurring)).
    Given  the relevant jurisprudence  and the approach
    the district court took  in resolving this case, we  need not
    decide   whether   or  not   Silverman's   alleged  statement
    constituted a "smoking gun" because the result  here would be
    the same  either  way.   As  we have  previously  noted in  a
    similar  case   involving  appellate  review  of  a  directed
    verdict, "[d]iscretion is sometimes the better part of valor,
    and  courts   often  wisely  decide  to   sidestep  difficult
    theoretical questions if answers to them are not essential to
    the proper resolution of a case."  Smith, 
    76 F.3d at 421
    .  As
    in Smith, "[w]e have here a good example of such a prudential
    approach.  The trial  court largely bypassed any differential
    -29-
    29
    direct evidence/circumstantial  evidence tamisage, preferring
    to go  directly to  a finding  that, on the  totality of  the
    evidence  presented, [Crown  and  the Silvermans]  had proven
    that [age] discrimination did not trigger the firing."  
    Id.
    The evidence presented in the instant case resolves
    the  age discrimination  issue  in favor  of the  defendants,
    whether  we find  Jack  Silverman's alleged  statement to  be
    direct evidence  of discrimination (a "smoking  gun") or not.
    In particular,  the evidence presented reveals  that no other
    salesman experienced a larger  decline in sales for  the five
    year  period 1987-1992.   The  evidence  does show  that some
    salesmen who were not terminated had sales that declined more
    than  Speen's in  absolute dollar  terms in  the year  or two
    prior to Speen's termination.   But other evidence shows that
    Crown salesmen each faced  different expectations in terms of
    year-to-year  sales,  depending  on  the  location  of  their
    territory, how long they had covered it, and other factors.
    The   evidence   further  indicates   that  Speen's
    supervisors were  unhappy with  Speen's performance and  that
    Jack Silverman  had complained about Speen's  declining sales
    figures and attitude  on numerous occasions in  the two years
    or  so prior  to  Speen's  termination.    In  at  least  one
    instance, Silverman did so in  front of other Crown salesmen,
    much to Speen's embarrassment.  Speen's performance, however,
    did  not improve.   The  evidence also  demonstrates  that at
    -30-
    30
    least two of Crown's more valued customers contacted Crown on
    their own volition to complain about Speen or to advise Crown
    to  replace  Speen with  "a  real  salesman."   The  evidence
    further reveals  both that Crown had  terminated the services
    of  several salesmen and that other salesmen had retired.  No
    discernible age-related  pattern, however, emerges  from this
    evidence.  Those who  were fired included young, middle-aged,
    and older  salesmen.  We again note that out of a sales force
    of twenty people, all five salesmen over the age of 70 at the
    time of Speen's  discharge in  December 1992  still sold  for
    Crown  at the time  of Speen's trial  in March 1996.   One of
    those active salesmen was over 80 years old.
    This proffered evidence --  considered in the light
    most favorable to Speen,  but also in its entirety  -- cannot
    be said either to permit a reasonable factfinder to reach the
    conclusion   that  Speen's  firing   was  triggered   by  age
    discrimination  or  to  permit  a  reasonable  inference that
    Crown's proffered reason for terminating Speen (declining and
    unsatisfactory sales  figures) was  pretextual.  Even  if the
    jury credited Jack Silverman's alleged  statement, therefore,
    Speen was not entitled to a jury verdict in his favor.
    To be sure, our duty in this appeal from a judgment
    as a  matter  of  law  is to  review  the  evidence  and  the
    reasonable inferences  extractable from it in  the light most
    favorable  to  the nonmovant,  namely,  Speen.   While  "this
    -31-
    31
    approach does not allow the court to consider the credibility
    of witnesses, resolve conflicts in testimony, or evaluate the
    weight  of the  evidence, neither  does it  pave the  way for
    every  case, no  matter  how  sketchy,  to reach  the  jury."
    Smith,  
    76 F.3d at 425
     (internal  quotations and  citations
    omitted).   Put another way, "a mere scintilla of evidence is
    not  enough to forestall a  directed verdict, especially on a
    claim or issue as to which the burden of proof belongs to the
    objecting  party."    
    Id. at 425-26
       (internal  quotations
    omitted).   These  time-worn  principles of  law support  the
    district court's disposition of this part of Speen's action.
    Nothing  in  the  Massachusetts cases  leads  us to
    question   this  result   given   the  fact   that  the   age
    discrimination  issue  we  are  considering  is  embedded  in
    Speen's  state common law tort  claim.  As  we noted earlier,
    Massachusetts courts have explained that the requisite malice
    required  for finding  liability under  a claim  for tortious
    interference exists "depend[ing] on the evidence in each case
    and on what the  trier of fact may reasonably infer from that
    evidence."    Gram,  429  N.E.2d  at  24.    "Any  reasonable
    inference of malice must, however, be based on probabilities,
    rather  than  possibilities."     Id.   at  24-25   (internal
    quotations omitted).   In view  of the language  in Gram,  we
    thus  conclude  that  Massachusetts  courts  would  not  view
    Speen's  claim (that  he was  fired due  to his  age) as  one
    -32-
    32
    supported by reasonable  inferences drawn  from the  evidence
    presented.
    Conclusion
    Conclusion
    Speen  failed to  provide  sufficient  evidence  to
    support  a finding that he  was a Crown  employee who enjoyed
    protection under  the applicable federal and  state statutory
    provisions governing age  discrimination and pension  rights.
    Nor  did  he  produce  evidence  sufficient  to  support  his
    remaining  Massachusetts  common law  tort  claims.   On  the
    evidence  presented, we  conclude  that the  district court's
    entry  of judgment  as  a matter  of  law for  the  appellee-
    defendants was correct.
    Affirmed.
    Affirmed.
    -33-
    33
    

Document Info

Docket Number: 96-1402

Citation Numbers: 102 F.3d 625, 1996 WL 724302

Judges: Cyr, Boudin, Stahl

Filed Date: 12/24/1996

Precedential Status: Precedential

Modified Date: 10/19/2024

Authorities (24)

Bartels v. Birmingham , 332 U.S. 126 ( 1947 )

Goldberg v. Whitaker House Cooperative, Inc. , 81 S. Ct. 933 ( 1961 )

National Labor Relations Board v. United Insurance Co. of ... , 88 S. Ct. 988 ( 1968 )

Charles Franklin GARRETT, Appellant, v. PHILLIPS MILLS, INC.... , 721 F.2d 979 ( 1983 )

elmer-e-oestman-jr-v-national-farmers-union-insurance-co-a , 958 F.2d 303 ( 1992 )

Favorito v. Pannell , 27 F.3d 716 ( 1994 )

Rutherford Food Corp. v. McComb , 331 U.S. 722 ( 1947 )

Community for Creative Non-Violence v. Reid , 109 S. Ct. 2166 ( 1989 )

McDonnell Douglas Corp. v. Green , 93 S. Ct. 1817 ( 1973 )

Becky Doty, Vicky Doty, David Price and Roy Price, Cross-... , 733 F.2d 720 ( 1984 )

Sereni v. Star Sportswear Manufacturing Corp. , 24 Mass. App. Ct. 428 ( 1987 )

John P. Murray v. Ross-Dove Company, Inc. And Dovetech, Inc. , 5 F.3d 573 ( 1993 )

J. William Hayden v. La-Z-Boy Chair Company , 125 A.L.R. Fed. 717 ( 1993 )

raymond-j-donovan-secretary-of-labor-united-states-department-of-labor , 712 F.2d 1509 ( 1983 )

Harold Frankel v. Bally, Inc. , 987 F.2d 86 ( 1993 )

Chase v. INDEPENDENT PRACTICE ASSOCIATION, INC , 31 Mass. App. Ct. 661 ( 1991 )

Greenberg v. Union Camp Corp. , 48 F.3d 22 ( 1995 )

64-fair-emplpraccas-bna-638-64-empl-prac-dec-p-42973-howard-e , 21 F.3d 502 ( 1994 )

Samuel Mesnick v. General Electric Company , 950 F.2d 816 ( 1991 )

Jimmie Ruth Daughtrey v. Honeywell, Inc., Bull Hn ... , 3 F.3d 1488 ( 1993 )

View All Authorities »