SJC Ruling Affirms Independent Contractor Status

The Massachusetts Association of REALTORS® (MAR) announced today that the Massachusetts State Supreme Court (SJC) decision in Monell vs. Boston Pads LLC is a win for consumers and the entire real estate industry. The ability for real estate agents to choose to affiliate with real estate brokers as independent contractors has been the backbone of the profession for more than 100 years.

Monell v. Boston Pads, LLC was originally heard before the Suffolk County Superior Court and a decision was made in July 2013. The Superior Court held that the existing practice of brokers and salespersons affiliating as independent contractors is consistent with state law and that they may affiliate as either an independent contractors or as an employee. Most agents and brokers in Massachusetts, and throughout the country, have agreed to affiliate as independent contractors. This is due to a variety of reasons, primarily because of the commission-based nature of the business, the irregular hours, and the manner in which the business is conducted to best serve consumers. The losing agents appealed the decision and the State Supreme Judicial Court upheld the Lower Court ruling.

“We are pleased that the State Supreme Court affirmed the pro-consumer choice by real estate professionals to affiliate as either independent contractors or employees,” said 2015 MAR President Corinne Fitzgerald, broker-owner of FITZGERALD Real Estate in Greenfield. “This relationship has worked for generations and it is what consumers have come to expect regarding agent entrepreneurship and availability. We’re glad this choice will continue.”

As a result of the decision, the Court affirmed the Superior Court ruling that the real estate license law governs real estate agent relationships with their brokers. This decision also confirms what MAR has been recommending to its REALTOR® members for years.

“I am proud of our Association’s effort to preserve this choice for real estate professionals, especially because it has served consumer expectations so well,” said MAR CEO Robert Authier. “From filing legislation in 2010 to providing a ‘friend of the court’ brief this past year, this has been a top priority for the Massachusetts Association of REALTORS®.”

The court did leave open future circumstances in determining whether or not a real estate agent is PROPERLY classified as an Independent Contractor.  Therefore, the brokers should review written IC agreements, and the extent and scope of their control/oversight of the work actions of their agents, while providing oversight for license activities.  Consider the difference in setting work schedules, dress codes, floor time versus communication standards for clients and transactional issues.  Please see the following information from MAR and NAR to help establish those parameters to follow the law.

More Important Information on Independent Contractor

Legal Briefs – Massachusetts Supreme Judicial Court

Listen to the Oral Argument – Massachusetts Supreme Judicial Court

Submitted by Massachusetts Association of REALTORS Eric Berman – 781-839-5507 – | Jun 03, 2015About the Massachusetts Association of REALTORS®:  Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 21,000 members.  The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.