Licensed taxicab drivers in Boston brought an action against cab companies, alleging that they were misclassified by the companies as independent contractors. The taxicab drivers alleged that they were deprived of minimum wages, overtime pay, tips, and the protections afforded by the Wage Act.

In Boston, the commissioner is given the task of creating a comprehensive system of rules and regulations governing the ownership, leasing, licensing, rate setting, and operation of taxicabs in the city. In order for a qualifying taxicab to be put into service, the owner must obtain a license, called a “medallion,” for each such taxicab. There are myriad requirements that must be met in order to qualify for a medallion, including being deemed “suitable” individuals by the city’s inspector of carriages, obtaining adequate garage facilities within the city, and maintaining membership in an approved dispatch service or radio association, which provides twenty-four hour two-way communication solely, and exclusively, for Boston taxicabs. The radio associations, in turn, are required to provide certain enumerated dispatch services to their members and may accept payment for those services only from medallion owners.

Licensed taxicab drivers leased taxicabs and medallions from the medallion owners at flat rates, which are set by the commissioner. The contracts for leasing the taxicabs and medallions included an optional “Independent Contractor” clause, which states that the lessee is free from the control of the lessor and is not required to remit to the lessor any funds received in connection with the taxicab's operation. In 2012, licensed taxicab drivers who had signed the Independent Contractor clause filed a complaint against the cab companies, alleging that they were improperly classified as independent contractors. Should the taxicab drivers be classified as independent contractors?