January 2018

As I have written before, the Massachusetts Weekly Payment of Wages Act obligates employers to pay all earned wages to employees in a timely fashion. The Wage Act also specifies that the “president and treasurer of a corporation and any officers or agents having the management of such corporation” are personally liable for violations. In Segal v. Genitrix, LLC, et al., the Massachusetts Supreme Judicial Court, interpreting the phrase “agent having the management of the corporation” for the first time since it was added to the Wage Act in 1935, ruled that, as long as board members and investors acted in their ordinary capacities, they were not such agents and could not personally be liable for violations.

In Segal, the former president and chief executive officer of Genitrix, asserted that two former board members of the company, H. Fisk Johnson III and Stephen Rose, should be individually liable for wages that Segal claimed he was owed for services he performed for the company. Neither Johnson nor Rose was the president, treasurer, or any other officer of Genitrix. The Appeals Court, relying on Cook v. Patient Edu, ruled that Segal might have viable claims against Johnson and … Keep reading

In a recent blog post, I discussed how all-encompassing a fiduciary duty can be and how in-house counsel in closely held businesses might want to advise insiders about measures that could curb or even eliminate some of those duties. A new case from the Massachusetts Superior Court, Christensen v. Cox, highlights some other need-to-know aspects of fiduciary duties.

Clayton Christensen is a leader in the field of “disruptive innovation,” and he and his brother, Mathew, are involved in at least two companies working in that area, Disruptive Innovation GP, LLC and Rose Park Advisors, LLC. In 2010, Shawn Cox was hired as an employee at will of Rose Park, although he ended up providing various services to both companies. In April of 2013, Cox notified the Christensens that he would be taking a new job, and his last day of employment with Rose Park was at the end of May.

Shortly after Cox left, he asserted that he had been given equity in Disruptive Innovation and demanded a distribution based on that equity. While the Christensens disputed that Cox had been given any equity in Disruptive Innovation, Cox pointed to an April 2013 memo (signed by … Keep reading