Massachusetts Supreme Court upholds real estate agents’ employment status

Agents allowed to continue designating as employee or independent contractor

Realtors and real estate agents who choose to affiliate with a real estate brokerage will continue to be allowed to designate their own employment status after the Massachusetts State Supreme Court upheld a lower court’s ruling.

In ruling on Monell vs. Boston Pads LLC, the Massachusetts State Supreme Court agreed with a lower court’s decision that real estate brokers may choose to affiliate with a brokerage as either an independent contractor or an employee.

The lawsuit was originally filed in 2011, when a group of real estate agents sued their employers, arguing that they were indeed employees of their respective brokerages and therefore entitled to an hourly wage, set hours, and benefits.

The case was originally heard before the Suffolk County Superior Court and a decision was handed down in July 2013. The Superior Court held that the existing practice of brokers and salespersons affiliating as independent contractors was consistent with state law and that they may affiliate as either an independent contractor or as an employee.

The losing agents appealed the decision to the State Supreme Court, which upheld the lower court’s decision.

The Massachusetts Association of Realtors hailed the decision.

“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.

“This relationship has worked for generations and it is what consumers have come to expect regarding agent entrepreneurship and availability,” Fitzgerald continued. “We’re glad this choice will continue.”

Most agents and brokers in Massachusetts, and throughout the country, have agreed to affiliate as independent contractors, MAR said, adding that this is due to a variety of reasons, including the commission-based nature of the business, the irregular hours and the manner in which the business is conducted to best serve consumers.

“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.”

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