Employment Law Update

Employment Law Update

Employment Law Update – April 2019

Legislative Update

State

  • Minimum Wage Increase. On January 1, 2019, the minimum wage increased to $12.00 hour and the “service rate” for tipped employees increased to $4.35.  Employees who are paid the service rate must still make at least minimum wage when the sum of their tips and the service rate are combined.  The minimum wage will continue to rise annually in Massachusetts until it reaches $15.00 per hour in 2023. The service rate will also continue to rise annually until it reaches $6.75 per hour in 2023.
  • Phase Out of Premium Sunday/Holiday Pay. On January 1, 2019, the premium pay that retail workers must be paid for work completed on Sundays and on certain holidays decreased from 1.5 times an employee’s base hourly rate of pay to 1.4 times an employee’s base rate. This multiplier will decline annually until it is completely eliminated in 2023.
  • Paid Family and Medical Leave. As previously reported in this update, M.G.L. c. 175M, as added by St. 2018, c.121, established a paid family and medical leave in Massachusetts.   Paid family medical leave. On March 29, 2019, draft regulations were published. Below are the important dates for the implementation of taxation and leave under this Act:

    Date Requirement/Action Taken
    March 29, 2019 Proposed regulations published
    May 31, 2019
    July 1, 2019    		 Employers provide written notice to employees
    Begin collection of tax of 0.63 percent
    January 1, 2021 Begin to pay leave benefits

Judicial Update

Federal

  • Disability Discrimination and Retaliation.  Pena v. Honeywell International, Inc., 1st Circuit Court of Appeals, 19-1164.  First Circuit upheld the dismissal at summary judgment of the plaintiff’s claim of disability discrimination and retaliation. The full panel agreed that the retaliation claim was properly dismissed, but split on whether dismissal of the discrimination claim was appropriate.  The majority found that the plaintiff had not met his burden of showing that she was a qualified handicapped individual because she had claimed on her Social Security Disability Insurance application that she was completely disabled and unable to work.  The majority analyzed the apparent inconsistency in this statement under the framework outlined by the Supreme Court and, in part relying on the plaintiff’s deposition testimony, concluded that the evidence did not support the plaintiff’s contention that she could have performed her job with a reasonable accommodation.  The dissent disagreed and argued that the plaintiff’s statements to disability were adequately explained.

Massachusetts

  • Wage Act and Attorney Fees.  Ferman v. Sturgis Cleaners, Inc., Supreme Judicial Court, SJC 12602. Where a Wage Act claim was settled, but the issue of attorney’s fees was reserved for the court, the Supreme Judicial Court considered whether the employees had “prevailed” within the meaning of the Wage Act allowing for the awarding of attorney’s fees.  The Court held that the appropriate test was the “catalyst test,” which provides that if the plaintiff’s lawsuit is a necessary and important factor in causing the defendant to grant a material portion of the requested relief, a settlement agreement, even without any judicial involvement, may qualify the plaintiff as a prevailing party for fee-shifting purposes. Under this test, the Court found that the Plaintiff had prevailed and was entitled to reasonable attorney’s fees.
  • Wage Act and Overtime. Arias-Villano, et. al. v. Chang & Sons Enterprises Inc., Supreme Judicial Court, SJC 12548). The Court overturned a Superior Court’s dismissal at summary judgment of the Plaintiffs’ claim that they had been misclassified as exempt from overtime under the agricultural exemption.  The Supreme Judicial Court ruled that the Massachusetts agricultural exemption should be construed narrowly to only include the work of planting, raising, and harvesting crops. The Massachusetts exemption was distinguished from the broader federal exemption.
  • Disability Discrimination and Retaliation.  Willey v. Town of Coda Lee, Superior Court, No. 17‑0119).  The Court entered summary judgment in favor of the municipal employer in a claim where plaintiff alleged that the employer discriminated against him based on his handicap and his perceived handicap by terminating his employment as an EMT and then retaliating against him by changing a policy that permitted to work as an independent contractor at school events.  The Plaintiff had been employed as a volunteer and later as a part – and full – time employee as an EMT basic for the Town’s ambulance service’s department.  In recent years, Plaintiff had a number of incidents while driving the Town’s ambulance.  At one point, the Town asked for his eyesight to be checked, which it was and found not to have any issues.  Indeed, Plaintiff had corrective surgery to his right eye after a splinter from a stick pierced it.  After the most recent accident, he was placed on leave and thereafter asserted that he suffered from sleep apnea.  He was allowed to engage in treatment, but could not obtain a letter from his doctor fully clearing him.  Furthermore, unbeknownst to the Town, which was not aware of an issue with his peripheral vision, he was unable to get a letter from his doctor stating that he was safe to drive an ambulance.

    In allowing summary judgment, the Court determined that Plaintiff was not handicapped under Chapter 151B.  The Court found that his actual disability, sleep apnea, and his perceived disability, depth perception, substantially limited only one aspect of his job as an EMT with the Town – his ability to drive the ambulance.  Citing to multiple decisions, the Court found that the inability perform only one particular aspect of a single, particular job did not establish a substantial limitation under the statute.

    With respect to the retaliation claim, a decision was made by the Town to pay EMTs working scholastic events as employees rather than independent contractors   This occurred after Plaintiff had filed a charge of discrimination.  The Court found that there was no causal connection between the two events and that the Town has first began considering a change in the policy as to how EMTs were paid for school events around the beginning of the 2016 – 2017 school year, which was prior to his termination and his MCAD complaint.

  • Civil Rights Act.  Ayan v. Fitchburg State University, Superior Court C.A. No. 1881CV00307.  The Court denied a motion to dismiss a wrongful termination in violation of public policy claim finding that a search done by an officer could not, at this stage form the basis of a termination due to the potential public policy of maintaining a safe campus.  The Court determined that the issue required at least a fuller record and consideration at summary judgment.  The Court found that to the extent that the claim was based upon a public deed — reporting a reckless and potentially intoxicated driver while off duty — it fell within the public policy exception and could be the basis of a wrongful termination claim.

    With respect to the claim for violation of the Massachusetts Civil Rights Act, the Court noted that there is no constitutional right to work in the at-will employment context and therefore no secured right was at stake.  The Court also found that it was well settled that merely threatening to terminate an at-will employee is not actionable conduct.  Asking an employee to comply with the department’s universal policy preventing pat frisks is not comparable to the direct assault found in cases where Courts have granted relief under the MCRA.  As such, the claim was dismissed.

    With respect for a claim for defamation, based upon an alleged false statement in an investigation report, that the Plaintiff discouraged students from using safety escorts and that he violated the laws of the commonwealth and the department’s rules and regulations, the conditional privilege did not protect these statements.  The Court found that the Plaintiff alleged that his supervisor included false statements in his investigation report to cover up the supervisor’s own deficiencies in failing to train the Plaintiff properly and that the supervisor was already aware that the Plaintiff had been conducting pat frisk and visual inspections.  Because the allegations suggested that the supervisor had an ulterior motive when he compiled his investigation report, the Plaintiff had sufficiently stated an entitlement to relief.

  • Denial Of Transfer As Adverse Employment Action.  Yee v. Massachusetts State Police, Supreme Judicial Court, SJC-12485.  The Plaintiff, a lieutenant in the Massachusetts State Police, filed suit alleging that he suffered discrimination in violation of M.G.L. c. 151B, Section 4, when he was denied the transfer to a different troop statement on the basis of his age, race, or national origin.  The Superior Court had granted the State Police’s motion for summary judgment concluding that the Plaintiff had not met his burden of showing that the denial of his request for a lateral transfer was an “adverse employment action.”  The SJC determined that there were material differences between the two positions and the opportunity to earn compensation, or in the terms, conditions were privileges of employment, and thus the failure to grant a lateral transfer to the preferred position may constitute an adverse employment action under Chapter 151B.  In this instance, the Plaintiff contended that the failure to grant him the transfer was an adverse employment action because the new troop would have offered more opportunities for overtime and paid details than his present troop and therefore offered him a greater opportunity to increase his overall compensation even though his base salary and benefits would be unaffected by the transfer.

    The SJC determined whether a failure to grant a lateral transfer may constitute an adverse employment action.  The SJC concluded that where an employee can show that there are material differences between two positions and the opportunity for compensation, or in the terms, conditions, or privileges of employment, the failure to grant a lateral transfer to the preferred position may constitute an adverse employment action under c.151B.  The SJC also rejected the argument that the denial of a lateral transfer may be an adverse employment action only where the transfer would have constituted a promotion.  The SJC noted that where an employee who was denied a transfer puts forth evidence of any “objective indicator of desirability” that would “permit a reasonable fact finder to conclude that the sought for position is materially more advantageous”, he or she has met his burden of proving an adverse employment action.

Employment Law Update – January 2019

Legislative Update

State

  • Minimum Wage Increase. On January 1, 2019, the minimum wage increased to $12.00 hour and the “service rate” for tipped employees increased to $4.35.  Employees who are paid the service rate must still make at least minimum wage when the sum of their tips and the service rate are combined.  The minimum wage will continue to rise annually in Massachusetts until it reaches $15.00 per hour in 2023. The service rate will also continue to rise annually until it reaches $6.75 per hour in 2023.
  • Phase out of Premium Sunday/Holiday Pay. On January 1, 2019, the premium pay that retail workers must be paid for work completed on Sundays and on certain holidays decreased from 1.5 times an employee’s base hourly rate of pay to 1.4 times an employee’s base rate. This multiplier will decline annually until it is completely eliminated in 2023.
  • Paid Family and Medical Leave. As previously reported in this update, M.G.L. c. 175M, as added by St. 2018, c.121, established a paid family and medical leave in Massachusetts.   Paid family medical leave. Below are the important dates for the implementation of taxation and leave under this Act:
    Date Requirement
    March 31, 2019 Proposed regulations published
    July 1, 2019 Begin collection of tax of 0.63 percent
    January 1, 2021 Begin to pay leave benefits

Judicial Update

Federal

  • Employment – Police – Conspiracy – MCRA. Thomas v. Harrington, First Circuit Court of Appeals (No. 18-1102).  This appeal arises out of an alleged conspiracy to terminate Mark Thomas from his position as an officer at the Salisbury Police Department (‘SPD’). In 2010, Cornelius Harrington, the Salisbury town manager, hired Robert St. Pierre to investigate allegations of misconduct by the then-police chief, David L’Esperance. During the investigation, St. Pierre also uncovered evidence of alleged wrongdoing by Thomas, resulting in a follow-up investigation. Harrington terminated Thomas from his employment based on that second investigation, but an arbitrator later reversed that decision.  Nevertheless, Thomas retired soon after and alleged, inter alia, that Harrington and St. Pierre conspired against him. He further alleged that Harrington violated the Massachusetts Civil Rights Act (‘MCRA’), Mass. Gen. Laws ch. 12 §§ 11H, 11I, by depriving him of a protected property right — namely, his continued employment with the SPD.  Thomas contends that Harrington violated the MCRA by forcing him to leave the SPD. In support, Thomas notes that Harrington disseminated St. Pierre’s investigatory report to a local newspaper, possibly disclosed it to the Massachusetts Board of Bar Overseers, and ‘steer[ed]’ Fowler into forbidding him from practicing law.The court found that even taking these arguments at face value, the events to which Thomas points fell well short of the MCRA’s coercion requirement. First, as the district court noted, the dissemination to the local newspaper was in response to a FOIA request. Second, Thomas’s allegation that Harrington submitted the report to the Board of Bar Overseers suffers from fatal flaws — he does not show how, given the record here, this filing could constitute ‘threats, coercion, or intimidation.’ And, his unsupported allegations are no more than that — mere allegations. And third, the record shows not only that Fowler unilaterally implemented the policy restricting officers moonlighting as practicing attorneys, but also that the policy was narrowly tailored to ensure that officers avoided any conflicts of interest. The court found that the events did not evidence a ‘pattern of harassment and intimidation’ geared towards coercing Thomas’s resignation from the SPD.
  • Contempt Order.  Pineda v. Skinner Services, Inc., District Court (16-12217-FDS).  A Federal District Court judge issued an order awarding sanctions for contempt.  Earlier in a lawsuit against the employer regarding wages allegedly owed to its employees, the Court entered a protective order for the plaintiffs prohibiting the employer from retaliating against employees who participated in the lawsuit.  The Plaintiff then gave testimony and was subsequently terminated.  The Court, after hearing, ordered the defendants to pay back pay to the terminated employee from the date of discharge to the date of the hearing less amounts earned working at other positions.  The Court also awarded front pay for a period of 6 months, $42,142.50 in attorney’s fees and $4,022.67 in costs and fees.  The Court also ordered the defendants to provide a neutral letter of reference for the plaintiff and that ordered the defendant to post a notice of the Order with translation inn Spanish and Portuguese in a conspicuous place in the workplace.

Massachusetts

  • Wage Act and WARN Act.  Calixto v. Coughlin, Supreme Judicial Court (SJC-1251).  The SJC Court affirmed the dismissal of an action brought by employees of a company that had shut down without any prior notice in violation of the WARN Act, and had their employment terminated immediately upon notice.  The WARN Act requires that employers with at least one hundred full-time employees or at least one hundred full-and part-time employees who collectively work at least 4,000 non overtime hours per week not order a plant closing or mass layoff until the end of a 60 day period after the employer serves written notice of such an order on each affected employee or their representative.  If an employer fails to comply with the 60 day notice requirement, it is liable to each aggrieved employee who suffers an employment loss as a result of such closing or layoff for back pay and employee benefits covering each day of the notice violation.  The employees had filed an action against the company in Federal Court, which was not defended, and a Federal Court judge awarded nearly a $2 million dollar default judgement under the WARN Act to the employees.  After the employees were unable to collect any of the judgment from the company due to its insolvency, the employees brought a putative class action in the Superior Court against the officers directly.  The officers moved to dismiss the complaint for failure to state a claim, which was allowed upon a finding that the WARN Act Award did not qualify as earned wages under the Wage Act.  The Court pointed to the definition of “wages earned,” and prior explanation of that definition noting that “wages earned” occurs “Where an employee has completed the labor, service, or performance required of him, therefore, according to common parlance and understanding he has earned his wage.”The damages assessed under the WARN Act are not for work performed and therefore could not trigger the precise requirements and severe penalties of the Wage Act.  Furthermore, the Court determined that WARN Act damages are not the equivalent of back pay.
  • Non‑Competition and Non‑Disclosure Agreement.  Frequency Therapeutics, Inc. v. Weber, Suffolk Superior Court (SUCV2018-03471-BLS2).  Frequency, Weber’s former employer, brought a complaint against Weber and his new employer, Decibel Therapeutics, Inc.  Seeking, among other things, to enforce Non‑Competition and Non‑Disclosure Agreements between it and Weber.  Weber had worked for Frequency from November 2016 as its Chief Medical Officer until his resignation in May 2018.  At the time of his hiring, Weber signed two agreements:  A Non‑Competition and Non‑Solicitation Agreement and a Non‑Disclosure Agreement.  Frequency and Decibel are healthcare technology companies focusing on discovering ways to treat hearing loss.  The Court found that Decibel was Frequency’s primary and most well-funded competitor in the business of developing pharmaceutical therapies for the treatment of hearing loss through the use of regenerative technology, gene therapy and other technologies.  Frequency then began to focus on different potential therapies that may have not been related to Weber’s strengths.  The president of Decibel reached out to Weber about potential employment, and eventually he took a position with Decibel.The Court found that the 1‑year period in the Non‑Competition Agreement was reasonable.  The Court also found that Weber’s employment with Decibel was a breach of the Non‑Competition Agreement because they were competitors even though they focused on developing different medicines and therapies.  The Court noted that they were indeed in the business of developing medicines and therapies for patients in order to prevent or restore hearing loss, and the fact that the two companies differed in terms of their priorities did not negate the legitimacy of enforcement of the Non‑Competition Agreement.  Furthermore, the Court found that Frequency met its burden of showing it would suffer irreparable harm because of Weber’s past receipt and access to his employer’s most-confidential and competitively significant information.  The Court also found that Decibel’s attempt to have a carve-out in Weber’s employment agreement limiting his involvement to certain work did not properly protect Frequency.

 

 

Employment Law Update – November 2018

Please note that this will be the last update for 2018.  Updates will begin again in January 2019, and include any significant developments from December 2018.

Judicial Update

Federal

  • Disability Discrimination/Major Life Activity. Mancini v. City of Providence, No. 18-1011 (First Circuit Court of Appeals). The First Circuit affirmed summary judgment for a City in an action brought by a former police officer under the Americans with Disabilities Act (ADA), 42 U.S.C.S. §§ 12101 through 12213. The Court affirmed that a lay jury could have found that while the plaintiff had a physical impairment, here, a knee injury, and that the injuries would appear to qualify as a physiological condition affecting one or more body systems. Here, the plaintiff was injured on the job, required surgery to his knee and other medical care, and was placed on a special employment status. The Court found, however, that the fact that his condition could qualify as an impairment does not complete its inquiry, and noted that the district court’s main holding was that the plaintiff  did not establish that he had an impairment because he failed to supply any medical evidence of the claimed impairment. In a rather keenly worded opinion, the Court noted that “[t]he short of it is that [the plaintiff] has disregarded the need for facts and has pinned his hopes to conclusory averments. [The plaintiff] was obliged to offer some evidence that he was substantially limited in the performance of one or more major life activities at the time of the allegedly discriminatory action (“actual disability”) or some time prior to that (“record of disability”), and he has defaulted on that obligation. Simply mimicking the language of the ADA, without more, does not suffice.”
  • Disability Discrimination/Failure to Accommodate.  McDonough v. Brennan, U.S. District Court, C.A. No. 16-CV11496-DJC.  Plaintiff brought claims against the postmaster general of the United States Postal Service and the USPS for disability discrimination, failure to accommodate in retaliation.  The Court allowed the defendants’ Motion to Dismiss and Motion for Summary Judgment.  Plaintiff was a mail carrier and had originally suffered an injury in 1987, but continued to work with an accommodation for decades.  She then suffered an additional injury, and when she came back to work alleged that the route she was assigned exceeded her restrictions.  She alleged two counts under the Rehabilitation Act for discrimination based on a real or perceived disability and failure to accommodate.Setting aside the defendant’s argument that the court did not have subject matter jurisdiction on the failure to accommodate claim, the court focused on the merits of the discrimination and retaliation claims.  With respect to the retaliation claim, the court found that a reasonable jury cannot infer that the protected conduct that took place in 2012 was causally connected to the putative adverse employment actions that took place three years later in May 2015.  The Court also found that Plaintiff did not suffer an adverse action, concluding that the reassignment to another route was not an adverse action.  The court stated that a reassignment is an adverse action only when it involves significantly different responsibilities from the prior assignment and that the change was more disruptive than a mere inconvenience or an alteration of job responsibilities.With respect to the discrimination claim, the Court concluded that, at a minimum, Plaintiff could not prove a disability.  The court found that the records do not show that the impairments that Plaintiff relies upon amounted to a disability as she continued to perform her job as a part-time substitute letter carrier which included walking and some steep hills.  The court also noted that the Plaintiff does her own work, mows her lawn, walks the dog and otherwise carries on life activities.

Massachusetts

  • Retaliation Under Workers’ Compensation Act.  Bermudez v. Dielectrics, Appeals Court, No. 18-P-7. The Appeals Court vacated a judgment in favor of the defendant finding that the Workers’ Compensation Act did not bar an employee from pursuing a third-party action against any person responsible for injury after collecting benefits under the act.  In this case, the Plaintiff was a temporary employee for a staffing agency, and was placed at a manufacturing facility of the defendant.  While working in that capacity, she was injured when one of the defendant’s employees negligently operated a forklift, causing several large metal sheets to fall on her right foot.  She filed a workers’ compensation claim naming the staffing agency as her employer and collected benefits from the staffing agency’s insurer for her medical bills and lost wages.  Later, the defendant hired her as a full-time employee, and after that, she filed a third-party action for negligence and respondeat superior against the defendant and the employee.  In response to that action, the defendant terminated the Plaintiff citing directly to the filing of the action.  The court found that “it would be unfair today to allow an employee to file both a workers’ compensation claim and a third-party action, yet only prevent the employer from terminating an employee for filing one claim but not the other.”
  • Misclassification/Wage Act/Earned Sick Leave. Vancour v. Town of Tisbury, Superior Court, C.A. No. 1674CV00034. The Court awarded summary judgment in favor of the Town for claims of misclassification under G.L.c. 149 §§ 148B and 150, unpaid overtime wages under G.L.c. 151 § 1A, violation of the Earned Sick Time provision in G.L.c. 149, § 148C, and hostile work environment.  The Court ruled that there was insufficient support that Plaintiff was subjected to a hostile work environment or that he was unlawfully denied the ability to accrue and use sick earned time.  The court also found that the claimant was barred on statute of limitations grounds from recovering damages on his claim that he was misclassified as an independent contractor and wrongfully denied overtime wages to the extent of damages incurred prior to the 3‑year statute of limitations set by the commencement of this action.  By way of background, Plaintiff was hired in August 2005 as an independent contractor pursuant to a written “Services Contract” to be the Town’s Chief Wastewater Operator.  He continued in that position until December 2013 when he was appointed to the position of Wastewater Superintendent, which was a Town employee position.  He remained a Town employee until his resignation in October 2015.With respect to the hostile work environment claim, Plaintiff acknowledged that this claim was not based on any alleged discriminatory conduct or animus that was prohibited by Section 4(1) of Chapter 151B.With respect to the misclassification claim, the Court found that the claim was barred by the 3‑year statute of limitations.  The court found that he was fully aware when he was hired in August 2005 that his immediate predecessor in the same position was a Town employee and that the position had also been advertised as an employee and not a contract position.  Finally, with respect to the Earned Sick Time claim, Plaintiff agreed at oral argument that the Town correctly noted that the Town had never adopted or accepted G.L.c. 149, § 148C, and therefore he did not qualify as an “employee” for purposes of the statute.

 

 

Employment Law Update – October 2018

Judicial Update

Federal

  • Noncompetition Agreement.  C&W Facility Services, Inc. v. Mercado, District Court, C.A. No. 18‑11915‑FDS.  The Plaintiff in this matter was a Massachusetts corporation that provides day‑to-day property management, facilities operation, and maintenance services.  The Defendant was employed by the Plaintiff as a janitorial supervisor at one of the Plaintiff’s client’s location at a rate of pay of $18.00 per hour.  In her position as a janitorial supervisor, the Defendant had access to the Plaintiff’s proprietary information concerning the preferences of the client.  The Plaintiff then lost a bid for a 5‑year contract at the client’s location to a competitor.  The Plaintiff then had its employees, including the Defendant, sign a non‑service restrictive covenant whereby the employees promised that, for a period 2 years after termination of employment with the Plaintiff, the employees would not provide services at any locations at which they had worked while in the Plaintiff’s employ.  In consideration of this promise, this particular Defendant was paid a $3,500.00 bonus from the Plaintiff.  The Defendant then tendered her resignation in order to continue working at the client’s location under the employ of the competitor.  The Plaintiff filed suit to enforce the non‑service restrictive covenant and to enjoin the Defendant from working at the location for the 2‑year term of the restricted covenant.The court concluded that the Plaintiff had a legitimate business interest in protecting its goodwill and proprietary information about its customers, “even for something as mundane as customer preferences for janitorial and cleaning services.”  That said, the court restricted the period of the covenant from 2 years to 4 months citing to the fact that the Defendant was a low‑level supervisor, and the scope of the proprietary information in her possession is limited.  The court also found that the contractual provision providing for reimbursement of Plaintiff’s attorney’s fees, expenses and court costs was inappropriate in light of the facts of the case, notably that Defendant was a low‑level janitorial supervisor paid an hourly wage while the Plaintiff is a sophisticated company.It is worth noting that under the new legislation, this non-compete would have been unenforceable if it had been entered into after October 1, 2018, because the employee was an hourly employee who was not exempt from overtime laws under the FLSA.  Such employees can no longer be bound by non-competes.
  • Civil Procedure – Civil Rights. Yourga v. City of Northampton, et al., C.A. No. 16-30167-MGM.  In a case defended by Robinson Donovan, the Defendants successfully opposed the Plaintiff’s motion to amend his complaint to add an allegation under 42 U.S.C. § 1983 that the city had violated his civil rights.  The Plaintiff was a teacher who was placed on paid administrative leave while student complaints about him were investigated.  During the course of the investigation, the police became involved and informed the school that there was evidence indicating that the teacher had committed larceny in connection with his duties.  The school provided notice to the Plaintiff of its intention to suspend him, and the Plaintiff resigned the day before a meeting was scheduled with the superintendent and Plaintiff’s union lawyer to dispute the suspension.  Plaintiff was subsequently charged with two counts of larceny, and was acquitted at trial.The court denied Plaintiff’s motion to amend his complaint to include a civil rights claim against the city on the basis that it would be futile.  The court found that Plaintiff had not met his burden of demonstrating that he was deprived of a constitutional right due to a municipal policy, practice or custom.  The court rejected Plaintiff’s argument that the prior termination of an administrator established such a policy, practice or custom.  Likewise, the court rejected Plaintiff’s argument that the school committee directly violated his constitutional rights.  The court noted that since discovery had been completed, the Plaintiff had a higher burden to demonstrate that the proposed amended complaint was firmly grounded in the factual record, and that Plaintiff had failed to do so.
  • Wage Act. Ellicott v. American Capital Energy, Inc., First Circuit Court of Appeals, No. 17 1421. The Plaintiffs worked for the Defendant, a company that procures, engineers and installs large-scale solar energy systems.  The Plaintiff entered into a written contract with the Defendant that established his compensation plan which included, among other provisions, that he would be paid a sales commission of 40 percent of the profit margin on each sale and installation to be paid within 30 days after the client pays the Defendant and the installation is complete.  The Plaintiff was also paid a draw against his commissions.  A dispute then arose about the timely payment and amount of his commission, and the Plaintiff eventually stopped working for the Defendant.The Plaintiff brought a claim for violation of the Wage Act and breach of contract.  At trial, the jury found all three Defendants, which included the Defendant and two principals, liable under the Wage Act but allocated the damages under the Wage Act to the corporation and $0.00 to the principals.  The jury also found the corporation liable for breach of contract.  After reconsideration, the jury then returned a new verdict form that found all Defendants liable under the Wage Act, but this time allocated a majority of the damages to the corporation and a lesser amount to each individual Defendant.The First Circuit first found that the Plaintiff’s sales commissions were “definitely determined,” which means they must be “arithmetically determinable.”  Because the parties could calculate the Plaintiff’s sales commissions to the dime, the court found that they were wages under the Wage Act.  The court also found that the Plaintiff’s compensation satisfied the Wage Act’s “due and payable” requirement because all dependent contingencies for the payment of his commissions were met.  The court also determined that the Plaintiff’s Wage Act claim was equitably tolled because the Defendants “made representations they knew or should have known would induce the Plaintiff to put off bringing suit and he did in fact delay in reliance on the representations.”  The First Circuit agreed with the jury and thus the Wage Act claims fell within the 3‑year statute of limitations.

Massachusetts

  •  Employment Security.  DiGiulio v. Director of the Department of Unemployment Assistance, Appeals Court, No. 17-P-0330.  The Plaintiff was employed in Massachusetts but relocated to Puerto Rico with her husband who is a special agent with the Drug Enforcement Administration (DEA).  The Plaintiff argued that she is entitled to unemployment benefits from her former employer in Massachusetts.  The Court found that the Plaintiff was not entitled to unemployment benefits under a plain reading of the statute, and therefore reversed the judgment issued by the District Court judge granting unemployment benefits.
  • Anti-Discrimination Law.  Priscilla Flint vs. City of Boston & Another, Appeals Court, No. 2017-P-0343.  The Plaintiff, a black woman, was employed in the Treasury Department for the City of Boston.  The Defendants successfully moved for summary judgment, and the Plaintiff appealed the decision.  The 1st Circuit reversed the granting of summary judgment as to the pay discrimination claim, but affirmed the dismissal of the Plaintiff’s constructive discharge and breach of contract claims. The primary reason the city provided to the Plaintiff for a failure to increase her pay grade was budgetary issues, but the court found that a fact finder could reasonably infer that this was not the real reason.  The court pointed to the fact that during the time period in question, other white and Hispanic employees received pay raises.  The court found, however, that the Plaintiff’s contract claim was properly dismissed because of the Plaintiff’s failure to fully exhaust her contractual remedies under the CBA.  The court found that the Plaintiff could not rely on the inaction of the union because she had not first brought administrative breach of the duty of fair representation claim against the union, as is required under Massachusetts law.
  • Wage Act. Biewald v. Seven Ten Storage Software, Inc., Appeals Court, NO. 2017-P-30. The plaintiff commenced this action against his former employer, Seven Ten Storage Software, Inc., now known as Brojaban, Inc., and Seven Ten Software, LLC (collectively, Seven Ten), and several of its executives asserting a variety of claims related to the nonpayment of sales commissions. This action focused on the payment of commissions the plaintiff thought he was entitled under an employment contract.A Superior Court judge dismissed most of those claims on the defendants’ motion for summary judgment. A second judge then presided over a trial of the remaining claims, at the conclusion of which the jury found largely in favor of the plaintiff and awarded him damages for violations of the Wage Act, G. L. c. 149, § 148, and breach of his employment agreement. In response to the defendants’ motion for judgment notwithstanding the verdict, the trial judge, who had reserved ruling on the defendants’ motions for a directed verdict during the trial, vacated the verdict and ordered judgment for the defendants. The judge concluded that the plaintiff’s claims were barred by the unambiguous provisions of his employment agreement. The judge further concluded that, even assuming the employment agreement was ambiguous, the verdict could not be sustained on any reasonable view of the evidence.The Appeal Court affirmed the Superior Court’s decision that the commission did not become due until two conditions had been met: the sale and the consideration of the sale to the employer.  Because the second condition had not been met when the contract for employment was terminated, the commissions were not due and payable at all, or at the rates found by the jury.

Employment Law Update – September 2018

Judicial Update

Federal

  • Employment – Retaliation – Teacher – Advocacy.  Richard v. Regional School Unit 57, Court of Appeals, Docket No. 17-2200.  A plaintiff kindergarten teacher claimed that she was retaliated against for her advocacy on behalf of students with disabilities.  After a five day bench trial, the District Court judge found that the plaintiff had not met her burden as to causation.  The Court of Appeals rejected the plaintiff’s argument that once a District Court has found an employer’s reason for acting to be pretextual, it is compelled to find for the plaintiff, and it rejected the plaintiff’s other arguments that the District Court failed to consider certain evidence and that it erred in its factual findings.
  • Gender Discrimination And Retaliation. Bonilla-Ramirez v. MVM, Inc., et al., Court of Appeals, Docket No. 17-1512. The Court of Appeals affirmed the decision of the District Court granting summary judgment in favor of the employer for plaintiff’s claims of gender discrimination and retaliation in violation of federal law.  The Court found that plaintiff’s termination was not the result of unlawful discrimination.  The plaintiff, who was employed by a private security contractor engaged by ICE, had abandoned her post, used her cellphone while on duty, and “piggybacked” through secured airport doors.  Furthermore, the Court affirmed the decision to enter summary judgment as to the retaliation claim.  The Court found that the timing of the Plaintiff’s termination was due to the fact that ICE, after reviewing the behavior that was reported to it, had ordered the employer to reassign her, which resulted in her termination.  The Court found that the proximity of the termination decision to the filing of her EEOC complaint, without more, could not provide a basis for permitting this claim to survive summary judgment.  Finally, the Court affirmed the District Court’s decision that the plaintiff’s internal complaints made prior to the decision to remove her from her position, were not protected activities.

Massachusetts

  • Employment – Unpaid commissions – Sales manuals.  Daly v. T-Mobile USA, Inc., et al., Appeals Court, Docket No. 17-P-1375. Plaintiff, asserted that the defendant improperly modified his commission schedule after he brought in a new customer account, and sought to enforce the commission schedule set forth in the defendant’s sales manuals. The Appeals Court affirmed the judgment of the plaintiff’s breach of contract, Wage Act and unjust enrichment claims, summary holding that (1) the manuals expressly provide that the defendant can modify the exemplary commission schedule at its sole discretion, at any time, (2) the relevant modification occurred prior to any sales and was acknowledged by the plaintiff and (3) the plaintiff accepted commissions pursuant to the modified schedule for over three years without following the grievance procedure set forth in the manuals.  This case highlights the importance of employer’s policies in determining liability cases where an employee alleges that he or she was not paid all commissions owed.
  • Massachusetts Wage Act – Labor – Overtime. Parris, et al. vs. Sheriff of Suffolk County, Court of Appeals, Docket No. 17-P-189. A union representing employees of the Suffolk County Sherriff’s Department negotiated a collective bargaining agreement which provided for payment of overtime within 25 days of when the hours were worked. The Massachusetts Wage Act provides that overtime must be paid within seven days of when the hours were worked.  The Appeals Court found that this provision of the collective bargaining agreement was not an illegal “special contract” in violation of the Wage Act.  The Court found, however, that the collective bargaining agreement did not preclude employees from bringing individual suits under the Wage Act to enforce their right to timely payment of wages according to the modified schedule negotiated by the union.
  • Enforceability of Restrict Covenants over Employment in another State. Oxford Global Resources, LLC Vs. Jeremy Hernandez, Supreme Judicial Court, Docket No. SJC-12439. The defendant was employed in California by the plaintiff company, which is headquartered in Massachusetts. As a condition of employment, he signed a confidentiality, nonsolicitation, and noncompetition agreement (agreement) that declared that the agreement would be governed by the laws of Massachusetts and that all lawsuits arising from the agreement would be brought in a Massachusetts court. After the employee left to work for a competitor in California, he allegedly violated the nonsolicitation and confidentiality provisions of the agreement in performing his new job.  The former employer filed suit against the employee in the Massachusetts Superior Court.  The Supreme Judicial Court determined that the Superior Court judge had not abused his discretion by allowing the employee’s motion to dismiss on the ground that Massachusetts was not the appropriate forum. The SJC reasoned that the Massachusetts choice of law provision in the agreement was not enforceable, where California substantive law would apply under Massachusetts choice of law principles, and where the application of Massachusetts substantive law would violate the fundamental public policy of California favoring open competition and employee mobility. The SJC also concluded that the Massachusetts forum selection provision in the agreement did not bar the employee from moving to dismiss on the ground of forum non conveniens, or that dismissal was inappropriate after consideration of the relevant private and public concerns.
  • Massachusetts Civil Rights Act – Qualified Immunity. Krupien v. Ritcey, Appeals Court, Docket No. 17-P-870. The plaintiff sued her employer, the Chelsea Soldiers’ Home for violation of the Massachusetts Civil Rights Act, G.L.c. 12, §§ 11H and 11I.  The plaintiff named two of her supervisors who had barred her from the home’s campus, which included the plaintiff’s church, during an investigation of a claim by another employee that alleged the plaintiff had injured her wrist while transferring a patient from a bed to a wheel chair.  After being barred from the campus, the plaintiff alleged that she informed the two defendants that her church was on the home’s campus.  The Appeals Court found that the two defendants were not entitled to qualified immunity because they reasonably or should have known that their actions would have violated a clearly established known constitutional or statutory right of the plaintiff.  While this case may seem limited in scope, the MCRA applies to state and non-state actors.  This claim could act as a blueprint for other actions by employees alleging that their supervisors deprived them of a constitutional or statutory deprivation based upon an otherwise lawful action.
  • Agency Law – Respondent Superior – Pari Delicto Doctrine. Merrimack College vs. KPMG LLP, Appeals Court, Docket No. SJC-12434. The main issue in this case is whether the traditional principles of agency should be applied to impute the wrongdoing of an employee on its employer when determining whether the plaintiff should be barred from recovery under the “in pari delicto” doctrine where the plaintiff is an organization acting through its agents.  The Appeals Court held that for purposes of measuring fault under the “in pari delicto” doctrine, only the conduct of senior management is imputed on the plaintiff organization. The result of imputation is that the principal bears the legal consequences of the agent’s conduct. The Court concluded that because the employee responsible for wrongdoing was not a member of senior management, his conduct could not  be imputed to the organization.  Accordingly, the Appeals Court overturned a Superior Court finding of summary judgment, and remanded the case for further consideration by the Superior Court.

Employment Law Update – August 2018

Legislative Update

Massachusetts

  • Non-Compete Legislation: After years of failed attempts, the Massachusetts legislature has finally passed a comprehensive bill governing the use of non-competition agreements entered into by employees.  The bill was signed by the Governor, and will go into effect on October 1, 2018.  The new legislation does not govern non-competition agreements entered into in other contexts, such the sale of a business.  Likewise the new legislation does not govern other types of restrictive covenants such as nonsolicitation agreements or confidentiality agreements.  Some of the most notable points of the legislation are as follows:
    • Covered non-competition agreements cannot last more than one year;
    • Employers are required to pay their former employees “garden leave” pay during the restrictive period or other mutually agreed upon consideration. Garden leave pay constitutes at least 50 percent of the employee’s highest annual base salary within two years preceding the termination or other mutually agreed upon consideration.  The allowance of other mutually agreed upon consideration in lieu of garden leave has attracted significant attention, and it remains to be seen what consideration will be considered adequate by the courts;
    • Certain employees may not be bound by a non-competition agreement, including employees who are classified as non-exempt under the Fair Labor Standards Act, undergraduate or graduate employees engaged in short term employment, and employees who are 18 years or younger;
    • Non-competition agreements are also unenforceable against employees who are terminated without cause or laid off.

In addition to these specific provisions, the legislation codifies restrictions that were consistent with the law prior to this legislation.  For example, covered non-competition agreements must be no broader than necessary to protect a legitimate business agreement and must be reasonable in geographic scope.

 

Judicial Update

  • Employment – Hostile Work Environment – Age.  Rivera-Rivera v. Medina & Medina, Inc., Court of Appeals, Docket No. 17-1191.  Where a defendant employer was awarded summary judgment, that judgment must be reversed as to the plaintiff employee’s age-based hostile work environment, retaliation and constructive discharge claims, as the plaintiff provided enough detail to allow a factfinder to potentially rule in her favor.  The appeals court found that the district court appeared to believe that the plaintiff was required to produce evidence of every single individual offensive act directed toward her — including the exact date, exact individual involved, and exact words used. Without this, the lower court determined the plaintiff’s claim was doomed.  Thus, where a worker being continuously harassed is able to provide information about the type of harassment (including specific words, actions, or incidents) directed at her, as well as the individuals involved in creating such an environment, such claims should generally be sustainable provided the employee can tie her mistreatment to her membership in a protected class. Because the plaintiff did so, the Appeals Court had no problem concluding the information the plaintiff provided in her sworn statement met the specificity requirements necessary to back up her claim.
  • Gender and Disability Discrimination.  Trust v. Harvard University, U.S. Dist. CT, Docket No. 17-10183-RGS.  Plaintiff Samira Trust brought a curated litany of claims against her former employer, Harvard University, alleging, gender and disability discrimination, retaliation, and interference with her rights under the Family Medical Leave Act (FMLA). Harvard’s reasons for terminating Trust were performance related, and the Court held that plaintiff failed to make even a prima facie showing of retaliation or discrimination, or any other violation of her rights by Harvard. The court noted that courts do “not sit as super personnel departments, assessing the merits — or even the rationality — of employers’ nondiscriminatory business decisions,” and, thus, the court has no reason to disturb Harvard’s considered decision to terminate Trust for her unwillingness to abide by even the most commonplace requirements of her job.  Harvard’s Motion for Summary Judgment is allowed as to all Counts.
  • Employment – FLSA – Gross sales.  Li v. Fu Hing Main Restaurant, Inc., et al. U.S. Dist. CT., Docket No. 1:17-cv-10670-MPK.  A delivery driver had brought suit alleging that the defendant restaurant did not pay him fair wages. The court denied summary judgment because there are disputed issues of fact as to whether the restaurant meets the required annual gross sales amount of $500,000 as required by the Fair Labor Standards Act.
  • Employment – Preemption – Sick time – Rail carriers.  CSX Transportation, Inc., et al. v. Healey. U.S. Dist. CT., Docket No. 15-12865-NMG.  Plaintiff railroad operators had challenged the enforceability of the Massachusetts Earned Sick Time Law, but the court ruled that the plaintiffs were entitled to summary judgment, as every provision of the state statute is preempted by federal law.  The First Circuit affirmed, in part, this Court’s decision, holding that the Railroad Unemployment Insurance Act (‘RUIA’) preempts subsection (c)(2) of the Earned Sick Time Law (‘ESTL’) as applied to interstate rail carriers that employ workers in Massachusetts. The case was remanded for this Court to determine, in the first instance, whether any or all other sections of the ESTL might be applied to such employers. The First Circuit raised three potential questions that this Court may need to consider in order to resolve that issue on remand: (1) are any of the remaining sections of the ESTL themselves preempted by the RUIA, (2) are any remaining sections that are not so preempted nevertheless preempted by either the Railway Labor Act (‘RLA’) or Employee Retirement Income Security Act (‘ERISA’) as alleged in the complaint and (3) should any sections of the ESTL be preserved by severing the preempted sections as applied to interstate rail carriers.  After careful consideration of the arguments presented, the Court concluded that the statutory text of the RUIA reflects a congressional intent to preempt the entirety of the ESTL’s ‘earned sick time’ scheme. …The plain reading of the ESTL confirms that the ‘earned sick time’ provided for in subsection §148C(c) comes within the RUIA’s preemptive scope. …“The clear text of the preemption provision and the congressional purpose support a determination that the RUIA preempts the entire state earned sick time scheme which governs ‘earned sick time’ and is not limited to time that can be used exclusively for an employee’s personal sickness.

Massachusetts

  • Anti-Discrimination Law – Race.  Lisa Scarlett v. City of Boston, Appeals Court, Docket No. 17-P-998.  After the defendant Boston public school department (BPS) declined to renew her employment contract to work as a second grade teacher, the plaintiff brought an action in two counts, alleging, inter alia, that BPS violated G. L. c. 151B, § 4, by discriminating against her on the basis of her race (count I). A Superior Court judge allowed BPS’s motion for summary judgment and dismissed her complaint. On appeal, we apply the familiar three-stage McDonnell Douglas paradigm for assessing an employer’s motion for summary judgment with respect to an employee’s claim of racial discrimination in the context of a work force reduction.  Finding that Scarlett met her burden under this paradigm, the Court reversed the judgment as to count I.
  • Employment – Misclassification – Claim preclusion.  Misra, et al. v. Credico (USA) LLC, et al. Suffolk Sup. CT. Docket No. 1784CV02731-BLS2.  Six plaintiffs alleged that the defendants violated Massachusetts law by misclassifying employees as independent contractors and by failing to make minimum wage and overtime payments.  The court dismissed the complaint to the extent that two plaintiffs failed to raise their claims when they opted into a prior federal suit in New York.  Those claims are barred by the doctrine of claim preclusion because they could have been asserted in the prior FLSA lawsuit, and it is not clear that the federal court would have declined to exercise supplemental jurisdiction over those claims. The Court denied the motion to dismiss with respect to the claims asserted by the remaining plaintiffs, on behalf of themselves and other putative class members who did not opt into the prior action.
  • Employment – Duty of loyalty – Non-compete.  Hyperactive, Inc. v. Young, et al. Suffolk Sup. CT., Docket No. 1884CV-2097-BLS1.  A plaintiff company had requested preliminary injunctive relief against a former executive, which was granted as the plaintiff was likely to prevail on the merits of its claim that the defendant breached his fiduciary duty of loyalty and breached the non-competition provision of his shareholder agreement.  The defendant was an employee for approximately ten years until his termination. He acknowledged in open court at the motion hearing, that, at or around the time of his termination, he downloaded to his own computers the source code for the plaintiff’s software, as well as various confidential digital project files pertaining to the plaintiff’s clients. In doing so, the defendant violated the duty of loyalty that he owed to the plaintiff as an employee. Court further found that the improper activities pose a serious threat of irreparable harm to the plaintiff, that the balance of the harms that the parties may suffer through the issuance of preliminary injunctive relief cuts in favor of the plaintiff, and that the public interest is best served by granting such relief in these circumstances.

Employment Law Update – July 2018

Employment law has become a shifting landscape, making it challenging for even the most diligent employers to remain up to date. To help you navigate this terrain, Robinson Donovan’s Employment Law Group posts this monthly update regarding important cases, legislation, or other events.

Legislative Update

Massachusetts

  • Pay Equity Act: On July 1, 2018, the Pay Equity Act went into effect. The Pay Equity Act is a strict liability statute that prohibits employers from paying employees of different genders performing comparable work different salaries or rates of pay unless the differential is due to one of six allowable reasons set forth in the statute.  The allowable reasons are “[1] a system that rewards seniority with the employer; provided, however, that time spent on leave due to a pregnancy related condition and protected parental, family and medical leave, shall not reduce seniority; [2] a merit system; [3] a system which measures earnings by quantity or quality of production, sales, or revenue; [4] the geographic location in which a job is performed; [5] education, training or experience to the extent such factors are reasonably related to the particular job in question; or [6] travel, if the travel is a regular and necessary condition of the particular job.”  The Pay Equity Act also protects employees from retaliation.
    The Pay Equity Act additionally prohibits two specific types of employer actions.  Employers may not prohibit their employees from discussing or disclosing their own wages and benefits, or the wages and benefits of other employees.  There is an exception to this restriction, however, for employees who job duties allow access to other employee’s compensation information, such as a human resources employee.  Employers also may not seek the wage or salary history of prospective employees, or require that prospective employees’ prior earnings meet a certain criteria.The Pay Equity Act provides an affirmative defense from liability under either the Pay Equity Act or a gender discrimination claim alleging unequal pay under Massachusetts’ general anti-discrimination statute, M.G.L. c. 151B, to employers who have completed a self-evaluation of its pay practices in good faith within three years of the commencement of the action and can demonstrate that reasonable progress has been made towards eliminating compensation differentials based on gender.
  • The Millionaire’s Tax: We previously reported to you that there was an initiative petition scheduled for the November 2018 ballot that would have asked the public to vote on a constitutional amendment to “establish an additional 4% state income tax on that portion of annual taxable income in excess of $1 million. This income level would be adjusted annually to reflect increases in the cost of living by the same method used for federal income-tax brackets. Revenues from this tax would be used, subject to appropriation by the state Legislature, only for public education, public colleges and universities, the repair and maintenance of roads, bridges, and public transportation. The proposed amendment would apply to tax years beginning on or after January 1, 2019.”
    The Supreme Judicial Court issued a decision on June 18, 2018, finding that the initiative petition should not have been certified by the Attorney General because, contrary to the certification, the petition does not contain only subjects which are related or which are mutually dependent as required by the Massachusetts Constitution.  As such, the initiative has been removed from the November 2018 ballot.
  • The Grand Bargain: We previously reported that there were a number of ballot initiatives that could directly affect Massachusetts businesses or the business climate in the Commonwealth. On June 28, 2018, Governor Baker signed into law a bill that removed three initiative petitions relating to the minimum wage, paid family and medical leave, and the sales tax.  The bill, known as the “Grand Bargain”, did the following:
  • Minimum Wage: The new law will (1) raise minimum wages in the Commonwealth from the current $11.00 an hour to $15.00 an hour beginning in 2019 (to $12.00 an hour), followed by $0.75 increases each year: 2020 ($12.75); 2021 ($13.50); 2022 ($14.25); and 2023 ($15.00), (2) increase the tipped minimum wage from the current $3.75 an hour to $6.75 an hour by 2023, by way of $0.60 annual increments, and (3) eliminate time and a half pay for retail workers on Holidays and Sundays.
  • Paid Leave: The new law creates a new state agency, the Department of Family and Medical Leave, to administer the new paid family and medical leave program. The program will be funded by a 0.63$ payroll tax contribution, which can be adjusted annually. Please note the following:
  • Covered employees include not only current employees of a Massachusetts employer, but self-employed individuals who have elected coverage under the new law, and former employees who have not been separated from the employer for more than 26 weeks.
  • Employees eligible for leave may receive 12 weeks of paid family leave to provide care for a family member, to be with their child after birth or placement by adoption or foster care, or to attend to a family member who is on active military duty.
  • The law provides job protections and wage replacement for all employees.
  • For employers with less than 25 employees, wage replacement is employee funded as the employer is not obligated to make any contributions to the fund.
  • The wage replacement component will allow an employee to collect a maximum weekly benefit of $850 or a rate adjusted to 64% of the state average weekly wage (SAWW). The law provides that up to the first half of the SAWW will be reimbursed at a rate of 80%; after that, the employee would be paid half of the difference between his or her weekly wage and the SAWW.
  • Contributions also vary based on the type of leave: employees are required to cover all of the family leave contribution and 40% of the medical leave contribution; employers are required to cover at least 60% of the contribution to the medical leave trust fund.
  • Claims will be made to the new Department, and the Department will provide notice to the employee and the employer regarding any determination of eligibility. Determination must be made in approximately 14 days, and notice of claims to employers made within 5 days.
  • Leave under the new law will run concurrently with leave under the FMLA or the Massachusetts Parental Leave Act, and not in addition to.
  • Employees returning from leave must be returned to their previous positon or its equivalent.
  • The new law mandates certain notice requirements to employees by the employer regarding their rights and remedies.
  • The new law prohibits retaliation against employees who engage in activity protected under the law.

Many of the remaining details regarding the procedures for requesting leave or for making claims will be provided in the draft regulations, which are due out by the end of March 2019.  The Department will start collecting the new tax on July 1, 2019.

  • Sales Tax Holiday: The new law requires that lawmakers designate a specific weekend in August for a sales tax holiday, but certain products will be exempted from the holiday, including single items over $2,500, alcohol, vehicles and marijuana.
  • Wage Theft: The Massachusetts Senate passed a bill on June 21, 2018 that will make it easier to prosecute wage theft cases.  The bill, S.2327, would hold contractors, both the lead contractor and a subcontractor, liable for wages, as well as penalties or fines.  It would allow the attorney general to bring wage theft cases to court and seek civil damages, including treble damages. It would allow the Attorney General to issue a stop work order, halting work until a wage violation is corrected. The employer could request a hearing or correct the violation to have the work restarted.The bill will now go to the House.

Judicial Update

Federal

  • Non-Solicitation Agreement.  New England Controls, Inc. v. Pilsbury, 2018 U.S. Dist. CT. C.A. No. 1:18-cv-10583-DJC.  Where a plaintiff corporation has requested a preliminary injunction to prevent the defendant, a former employee of one of the plaintiff’s subsidiaries, from soliciting customers on behalf of the direct competitor, the request should be allowed, as the language in the parties’ non-solicitation agreement is broad, barring not only the defendant’s solicitation of the plaintiff’s current and former customers, but also prohibiting him from “call[ing] upon” them.  The employer did not get an injunction as to the confidentiality provision, but was granted one as to the non-solicitation.
  • Discrimination – Cancer.  Davidowicz v. 4M Fruit Distributors, Inc., et al. Appeals CT. Docket No. 17-P-660.  Where a plaintiff whose employment was terminated following several months of leave due to cancer treatment brought an action against her former employer, its owner, its president and its office manager, alleging handicap discrimination and aiding and abetting handicap discrimination, so much of the judgment as dismisses the claim of handicap discrimination must be vacated because a genuine issue of material fact exists as to whether the plaintiff was a qualified handicapped person within the meaning of the statute.  The Court concluded that genuine issues of material fact preclude a conclusion that the plaintiff is not a qualified handicapped person as a matter of law. Accordingly, so much of the judgment as dismisses the claim of handicap discrimination is vacated, and the judgment is otherwise affirmed.
  • Disability Discrimination.  Flaherty v. Entergy Nuclear Operations, Inc., U.S. Dist. CT. C.A. No. 16-11667-FDS.  This is a claim of disability discrimination brought by a nuclear-power station security guard. In 2004, plaintiff began working for defendant as a guard at its Pilgrim Nuclear Power Station in Plymouth, Massachusetts.  Since at least 2012, he has suffered from post-traumatic stress disorder (“PTSD”), chronic fatigue syndrome (“CFS”), and a variety of other conditions.  Plaintiff contends that because he cited Mass. Gen. Laws ch. 151B, § 4(16) in his MCAD charge, Defendant was provided sufficient notice of his failure to accommodate claims.  Because the failure to accommodate claims are beyond the scope of the MCAD charge, Plaintiff “failed to fulfill the exhaustion requirement necessary to maintain his Title VII and Chapter 151B [failure to accommodate] claims.”

Massachusetts

  • Wage Act – Commissions.  Parker v. EnerNOC, Inc., et al., Suffolk Superior Court, C.A. No. 1684CV02580-BLS2.  The Court agreed with Defendants that the damage award for future commissions is not subject to trebling under the Wage Act. The Legislature recognized that a successful Wage Act plaintiff may recover both ‘lost wages and other benefits’ as well as other ‘damages incurred.’ … But it only made treble damages available for an award of ‘lost wages and other benefits.’ By necessary implication, treble damages are not available for an award of damages that do not constitute ‘lost wages and other benefits.’ Unpaid commissions constitute lost wages, and therefore are subject to mandatory trebling by statute, if they are ‘due and payable’ and can be ‘definitely determined’ as of plaintiffs last day of employment. … But the amount that the jury awarded to Ms. Parker as damages under her retaliation claim was for a commission that did not become due and payable until one year after Plaintiff was fired.

 

Employment Law Update – June 2018

Events

On June 7, 2018, Attorneys Patricia Rapinchuk, Jeffrey Trapani, and Hunter Keil presented an Employment Law Update for General Practitioners and Employment Lawyers for the Hampshire County Bar Association.  The attorneys discussed key Federal, state, and local employment developments including Massachusetts Equal Pay Act, Pregnant Worker Fairness Act, Rights for victims of domestic violence in the workplace, the Federal stalemate over exempt status, workplace effects of past State ballot initiatives, including earned sick time and legalizing the use of medical and recreational marijuana, and pending bills and ballot initiatives, including mandated paid leave, increased minimum wage, wage theft and the use of non-competes.

Legislative Update

Massachusetts

  • Wage Theft: A bill to prevent wage theft and to promote employer accountability has received additional support in the Legislature.  The bill would create joint and several civil liability for a contractor doing business with a subcontractor who fails to pay its employees.

Judicial Update

Federal

  • Supreme Court Upholds Workplace Arbitration Contracts Barring Class Actions:  Epic Systems Corp. v. Lewis, No. 16-286. The Supreme Court held that that arbitration agreements in employment contracts for individualized proceedings must be enforced, and that the neither the savings clause from the Federal Arbitration Act nor the National Labor Relations Act suggest otherwise.  This holding prevented workers from banding together to take legal action over workplace issues because of their individual employment agreements. The class action lawsuits prohibited by the arbitration agreements at issue in this case can be a powerful tool for employees, and this decision is widely considered a win for employers.
  • FMLA and ADA:  Lipin v. Steward Healthcare Sys., LLC, 2018 U.S. Dist. CT. C.A. No. 16-12256-LTS.  A former employee sued his employer and others for wrongful termination in violation of the Family and Medical Leave Act, 29 U.S.C. § 2601, et seq. (“FMLA”), the Americans with Disabilities Act, 42 U.S.C. § 12203 (“ADA”), and Massachusetts statutory law on fair employment practices, Mass. Gen. Laws. ch. 151B § 4(16) (“Chapter 151B”). The employer moved for summary judgment on the grounds that it had decided to terminate the plaintiff’s employment before he contracted pneumonia and took any leave from work.  The Court denied the motion in part and allowed it in part.  The Court held that, under either party’s theory, the reason for Plaintiff’s termination had been determined prior to, or independent of, his medical leave.  The Court found that because the employer had reached an employment decision without regard to any disability asserted by the plaintiff, the employer was not obligated to initiate an interactive dialogue with the plaintiff toward an accommodation that would have served only to forestall his termination.
  • Taxation of Costs and Fees:  Tarbell v. Rocky’s Ace Hardware, U.S. Dist. CT. C.A. No. 15-10033-JGD.  The plaintiff brought suit against his former employer alleging that the employer had discriminated against him due to his heart condition by taking various adverse job actions against him and, ultimately, terminating his employment. The suit against the employer survived a motion to dismiss. After discovery was completed, the employer moved for summary judgment and prevailed. The employer filed a Motion for Taxation of Costs and Fees seeking to recover attorney’s fees and costs claiming that the plaintiff’s case was frivolous.  The Court denied the motion.
  • False Claims Act:  Driscoll v. Simsbury Assocs., U.S. Dist. CT. C.A. No. 17-cv-12373-ADB.  Plaintiff filed a complaint against her former employer, asserting wage claims and claims arising from allegedly unlawful conditions of her employment. The employer filed a Motion to Dismiss.  With respect to the wage claims, the Court concluded that the Plaintiff had not stated any facts, in even rough or general terms, as to when she was denied money for work performed, how much money she was denied, how many hours she worked without pay, how frequently this occurred, how much vacation or sick time pay was accrued and denied, when the denial occurred, or what type of sickness benefit was promised but not delivered. Thus, the Count held that the allegations were not sufficient to suggest a plausible claim for a violation of the Wage Act, nor did they put Defendant on notice as to the claim against it.
  • Workplace Discrimination:  Young v. Brennan, U.S. Dist. CT. C.A. No. 16-12001-FDS.  Plaintiff was formerly a temporary employee of the United States Postal Service. Plaintiff was involved in a minor automobile accident, after which she took leave from work for almost eight weeks. The Postal Service did not approve that period of leave, and subsequently declined to renew her temporary appointment. Plaintiff brought this action against the Postmaster General, alleging that the Postal Service violated the Family Medical Leave Act; unlawfully retaliated against her for engaging in protected conduct; and discriminated against her on the basis of race, sex, and disability. The Court granted defendant’s motion to dismiss in part, dismissing all claims except plaintiff’s claims for race and gender discrimination in violation of Title VII. Defendant then moved to dismiss the complaint for lack of subject matter jurisdiction or, in the alternative, for summary judgment on the remaining claims. The motion to dismiss for lack of subject matter jurisdiction was denied, and the motion for summary judgment was granted on the basis that plaintiff had failed to put forth sufficient facts for a reasonable fact finder to infer that the employer’s decision was motivated by gender animus, even where the decision was preceded by a prior remark regarding her pregnancy.
  • Settlement of Unpaid Overtime:  Jones v. Smith, U.S. Dist. CT. C.A. No. 1:16-cv-02194.  To have an enforceable release under the FLSA (Fair Labor Standards Act), a court must approve any settlement agreement.  This will necessitate a public filing of the proposed settlement agreement with the court. Absent special circumstances, it is unlikely that a court will agree to file such an agreement under seal, and simply including a confidentiality provision in the agreement itself will likely not be enough to convince a court that the agreement should be sealed. Employers and their attorneys need to keep this in mind when considering potential resolutions of unpaid overtime claims.

Massachusetts

  • $28M Verdict for Retaliation Claim: Gessy Toussaint v. Brigham & Women Hospital et al, Suffolk Superior Court, C.A. No. 1484CV02253.  A Suffolk Superior Court jury has found that a Boston hospital retaliated against a Haitian-American nurse who stood up for a black colleague, awarding her $28 million. This case is a stark reminder of the potentially risks or rewards of taking employment cases to trial where emotional distress and punitive damages can be awarded.
  • Retaliation: Mooney v. Warren, 2018 Mass. App. No. 17-P-1234.  The plaintiff appealed from the entry of summary judgment against her in the Superior Court. On appeal she focused on two of her counts: one alleging that defendants the city of Newton, its former mayor Setti Warren, and its former police chief Matthew Cummings violated G. L. c. 151B by retaliating against her for lodging a claim of discriminatory acts by Cummings, and the other alleging a civil conspiracy among defendants Cummings, former police lieutenant Edward Aucoin, and former police department employee Vincent Nguyen.  While the Appeals Court agreed with the Motion Judge that the defendants carried their burden, in the light most favorable to Plaintiff, the evidence supported the inference that Nguyen and Cummings each harbored ill-will against Mooney for different reasons. The court also found that the summary judgment record provided no evidence of ill will on the part of Aucoin or any indication that he or Cummings had an agreement with Nguyen, or knowingly assisted or encouraged Nguyen, to pursue groundless charges. While there was evidence showing that they all acted independently to press charges, there is no evidence in the record that would warrant an inference of concerted action to pursue false charges.

 Administrative Law Update

Massachusetts

Equity firm to pay $550K over Intern:  A Boston private equity firm will pay more than $550,000 in restitution and penalties associated with wage law violations stemming from the improper classification of full-time employees as interns. The law regarding who can lawfully be classified as an unpaid intern has been evolving in recent years, and has received substantial attention by the media. The fact intensive analysis is still difficult to apply, and employers using

Employment Law Update – May 2018

Employment law has become a shifting landscape, making it challenging for even the most diligent employers to remain up to date. To help you navigate this terrain, Robinson Donovan’s Employment Law Group posts this monthly update regarding important cases, legislation, or other events.

Legislative Update

Massachusetts

  • Pregnant Workers Fairness Act:  On April 1, 2017, the PWFA went into effect providing additional rights to employees by requiring their employers to accommodate and not discriminate against pregnant employees and new mothers. The statute requires employers to provide notice to its employees in writing, and employers should update their policies in conformity with this legislation.
  • Equal Pay Day:  April 10 was designated “Equal Pay Day.”  This marks an ideal moment for employers to take a look at the wages paid to their employees. The Pay Equity Act goes into effect on July 1, 2018.  Employers who complete a full audit in compliance with the statute are afforded a full defense to a state claim under the pay equity act or a claim of discriminatory payment on the basis of gender under Massachusetts’ general anti-discrimination statute Chapter 151B.
  • Excessive 15-Minute Breaks Are Not Compensable:  Employers can rest easy knowing that they do not have to pay employees for unlimited rest breaks simply because they are necessitated by an FMLA-approved serious health condition. Employers should carefully administer and track any such breaks to ensure compliance with both the FMLA and FLSA—along with any applicable state or local laws (e.g., local paid sick leave laws and required paid rest breaks).
  • Ballot Questions: There are several important ballot questions that will be presented to voters in November 2018 that will affect businesses and employers, including the following, which are available at mass.gov/ago/government-resources/initiatives-and-other-ballot-questions
  • (1) 17-17, An Initiative Petition for a Law Raising the Minimum Wage.
    According to the Attorney General, this “proposed law would raise the state’s minimum wage, which was $11.00 per hour as of January 1, 2017, to $12.00 in 2019; $13.00 in 2020; $14.00 in 2021; and $15.00 in 2022.  The proposed law would also raise the minimum cash wage that must be paid to tipped employees, which was $3.75 per hour as of January 1, 2017, to $5.05 in 2019; $6.35 in 2020; $7.64 in 2021; and $9.00 in 2022.”
  • (2) 17-18, An Initiative Petition for a Law Establishing a Paid Family and Medical Leave Insurance Program.
    According to the Attorney General, this proposed law would allow covered workers to take family leave and receive 90% of their average weekly earnings up to $1,000 per week, for up to 16 weeks of family leave or 26 weeks of medical leave.  It also creates a trust fund for the leave.
  • (3) 15-17, An Initiative Petition for an Amendment to the Constitution of the Commonwealth to Provide Resources for Education and Transportation through an additional tax on Incomes in Excess of One Million Dollars.
    According to the Attorney General, “this proposed constitutional amendment would establish an additional 4% state income tax on that portion of annual taxable income in excess of $1 million. This income level would be adjusted annually to reflect increases in the cost of living by the same method used for federal income-tax brackets. Revenues from this tax would be used, subject to appropriation by the state Legislature, only for public education, public colleges and universities, the repair and maintenance of roads, bridges, and public transportation. The proposed amendment would apply to tax years beginning on or after January 1, 2019.”Arguments regarding the constitutionality of this proposed amendment were made to the Supreme Judicial Court on February 6, 2018, and an opinion is pending.

Judicial Update

Federal

  • Bad Faith Discrimination Claim:  Santamaria v. Greenfield Community College, U.S. Dist. CT., C.A. No. 17-cv-30121-MAP.  Defendant employer contends that Plaintiff employee’s discrimination claim was not made in “good faith” because Plaintiff was aware that his termination was imminent for non-discriminatory reasons at the time he made the filing. In ruling on a Motion to Dismiss, the Court found that the argument suffered from at least two problems: First, it was based on documents not within the four corners of the complaint. Second, the bad-faith scenario relied upon by Defendant may be subject to different interpretations after completion of discovery. The Court found that Defendant’s argument could be offered again at the summary judgment stage anchored on a full record, but it was insufficient to justify dismissal.
  • Discriminatory Animus:  Gautreau v. Hopkinton Public Schools, et al., U.S. Dist. CT., C.A. No. 1:16-cv-10017-RWZ.  In sum, plaintiff employee’s contentious history with the principal of the school does not, without more, amount to evidence of discriminatory animus based on age. (“Regardless of its bulk, [plaintiff’s] evidence had nothing at all to do with age or with the employer’s true motives . . . Viewed singly or in combination, these fragments would not allow a rational jury to find that [employer] had a hidden, age-oriented agenda.”). Where plaintiff has failed to rebut defendants’ proffered nondiscriminatory explanation, summary judgment for defendants is appropriate.
  • Reasonable Accommodation:  Sepúlveda-Vargas v. Caribbean Restaurants, LLC, U.S. Dist. CT., C.A. No. 16-2451. Where a defendant employer refused a plaintiff assistant manager’s request for fixed shifts instead of rotating shifts as an accommodation for his post-traumatic stress, the defendant did not violate the Americans with Disabilities Act, as the plaintiff was not qualified to perform the essential job functions required of assistant managers.
  • Paid Administrative Leave: Herman, et al. v. Coloplast Corp., et al. U.S. Dist. CT., C.A. No. 11-12131-RWZ.  A recent ruling from the U.S. District Court may surprise employers who, as a matter of course, place employees being investigated on paid administrative leave. Here, the Court held that, depending on circumstances, paid administrative leave might constitute a materially adverse employment action sufficient to prove an unlawful retaliation claim against the employer.

Massachusetts

  • FMLA Liquidated Damages: Richard DaPrato v. Massachusetts Water Resources Authority, Suffolk Superior Court, C.A. No. 2015-3687-D.  Where a jury returned a verdict in favor of a plaintiff employee for retaliation under state and federal disability discrimination laws and the federal Family and Medical Leave Act, the plaintiff should be awarded liquidated damages under the FMLA, as well as front pay.

Administrative Law Update

Massachusetts

  • Medical Marijuana – Gene A. St. Pierre, et al. v. Workers’ Compensation Trust Fund, Department of Industrial Accidents, Board No. 014647-12.  An administrative law judge ruled that the Workers’ Compensation Trust Fund was required to reimburse a Vermont resident for the use of medical marijuana obtained in Vermont to treat a workplace injury sustained in Massachusetts.  This decision is one more indication of the integration of medical marijuana into Massachusetts’ law.  Employers faced with employees who use medical or recreational marijuana should be aware of this evolving area of law, and decisions such as this which side with employees using marijuana.