Selection of Forum Other Than Massachusetts May Not Avoid Wage Act Enforcement

Before last week, a non-Massachusetts employer could insulate itself from employee claims under the Massachusetts Weekly Payment of Wages Act (“Wage Act”) simply by having its employees agree that all employment disputes be litigated in the employer’s home state.  That all changed with the Massachusetts Supreme Judicial Court’s decision in Melia v. Zenhire, Inc.   

In that case, plaintiff Edward Melia, who worked and lived in Massachusetts, challenged the validity of a forum selection clause contained in his employment agreement requiring that any disputes related to his employment  be litigated in New York.  Melia’s claims against Zenhire included claims for unpaid wages, unpaid vacation and sick day wages, severance pay and unreimbursed expenses.  Melia argued that the forum selection clause was a “special contract” prohibited by the Wage Act and against Massachusetts public policy.  The SJC disagreed, determining that, due to comity amongst state courts, and in light of most states’ choice of law rules, there is a presumption that other jurisdictions would apply laws such as the Wage Act.  As such, there was no public policy reason to invalidate a forum selection clause in an employment agreement. 

The SJC did leave one opening for employees in this regard, in that it held that if the employee could rebut the presumption that the designated forum would apply Massachusetts law, the forum selection clause would be invalidated.  The specific standard that the employee has to meet in order to rebut the presumption requires a showing that:

(1) the Wage Act applies; (2) the selected forum’s choice-of-law rules would select a law other than that of Massachusetts; and (3) application of the selected law would deprive the employee of a substantive right guaranteed the Wage Act.  On the introduction of such evidence, the proponent of the forum selection clause would retain the ultimate burden of demonstrating that the clause does not operate as a “special contract.”

So, although this means that employees may be required to travel outside of Massachusetts to litigate their claims, they still should be able to pursue the significant remedies afforded to them under the Massachusetts Wage Act.