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 … Keep reading
With greater frequency, the National Labor Relations Board (NLRB) has been exerting its authority over non-union employers. I’d like to share an article that I co-authored with my colleague, Mike Leahy, for the Spring 2012 issue of Focus, our firm’s quarterly newsletter, about a few recent developments from the NLRB affecting non-union employers, resulting from the use of social media. The full issue of Focus is available here.
A few years ago, many employers feared that use of social media would lead to disclosure of their confidential information and trade secrets, and implemented policies to stay ahead of the curve. Over the past year, high profile cases involving those social media policies have provided a timely reminder that the Depression-era National Labor Relations Act (NLRA) continues to apply to union-free workplaces, and not just unionized workplaces.
Indeed, the current chair of the National Labor Relations Board (NLRB) recently announced that he wants the NLRB to be viewed as a “resource for people with workplace concerns that may have nothing to do with union activities.” He has the law on his side. Section 7 of the NLRA gives employees the right “to engage in…concerted activities for the purpose … Keep reading
In my previous post, I shared three best practices for preparing for a potential employee termination. Here are two additional steps to consider in the termination process:
1. Prepare for possible exit interview scenarios.
Terminations are never easy and often become very personal. In most situations, the key is to conduct the termination meeting as respectfully as possible. In order to do so, it is advisable to have a plan addressing the following points:
a. Who will be at the meeting? Whenever possible, have two company representatives present, even if one is simply there to take notes. Consider security outside the room in those situations where the employee may become volatile.
b. What security measures will be taken while the employee is in the termination meeting? Consider placing limitations on or completely shutting off access to company e-mail, company credit cards and company computer systems. If the termination will not occur until a few weeks later, or transition is required from the employee, then completely shutting off access may not be the best course. Limiting access to certain areas of the computer systems may be appropriate.
c. What will be said? Have a very short introduction, convey the … Keep reading
Employment attorneys and in-house counsel are used to the 4 p.m. phone call informing them that an employee must be terminated “today,” followed by a request for a separation agreement or advice on how to handle the termination. More often than not, after asking a few questions we discover that, perhaps, the termination should be slowed down to ensure that we do it right. So, how should you prepare for a potential termination? Get started with these three tips:
1. Assess the reason for the termination.
Often, the reason given for terminating an employee is that he or she was not a “good fit” – a conveniently vague term that ranges from a host of legitimate business reasons to code for unlawful discrimination. Consequently, you need to drill down to what the real reason is for selecting this individual for termination at this time. Eligibility for unemployment benefits and continuation of certain other benefits, such as health insurance, may be dependent on the reason for termination.… Keep reading
Even the most sophisticated employer in the most intellectually demanding industry may misclassify its workers as “exempt” when they are, in fact “non-exempt.” The increasing number of misclassification litigation is a sure sign that no one is completely immune from inadvertently misclassifying workers.
What exactly are the workers “exempt” from anyway? The federal Fair Labor Standards Act (FLSA) requires that workers be paid a minimum wage for every hour they work and an overtime premium for any hours in excess of 40 hours worked in a week, but it permits employers from excluding certain types of employees from each of these requirements; hence, they are “exempt” employees. The most common areas of exemption are known as the “white collar” exemptions. These exempt employees are:
Of course, these “white collar” classifications may appear straightforward, but like the roads in the Tuscan hillside, they can become quite foggy and have twists and turns from time to time. Don’t fall for the typical myths about exempt classifications.
Myth No. 1: If the employee is paid a “salary” rather than “hourly,” the employee must be “exempt.”
Although any employee who is paid on an “hourly” basis … Keep reading
NOTE: Some changes have occurred since this entry was originally posted. Please see new post from April 18, 2012 for an update.
On April 30, 2012, a number of major changes to the National Labor Relations Act (NLRA) regulations will take effect and businesses, especially those that are not unionized, should take heed. While many employers view the NLRA as a “traditional” labor law that is not applicable to private, non-union entities, almost all employers engaged in interstate commerce are subject to the NLRA.
Two of these changes (effective April 30) are of particular note:
- Posting of Notices: As of April 30, 2012, all employers must post the Notice of Employee Rights under the National Labor Relations Act (English). For now, failure to comply with the posting requirement does not automatically result in an unfair labor practice, as the regulation was originally drafted, but it is likely that the National Labor Relations Board (NLRB)will draw an adverse inference from an employer’s failure to post. The posters must be 11 x 17 inches in size and posted in English and any other language which at least 20% of the workforce speaks, if they are not proficient in
… Keep reading
Most employment claims can be avoided by simply being aware of what the law requires. Here are three recurring issues which plaintiffs’ class action attorneys and government agencies are targeting across the country and which can be easily avoided by taking action now.
1. Misclassification of Workers as Independent Contractors
The Internal Revenue Service (IRS) and US Department of Labor (US DOL) have been increasingly cracking down on independent contractor misclassification. Last year, Massachusetts, along with several other states, signed a Memorandum of Understanding (MOU) with the IRS and DOL, formally agreeing to cooperate in investigating independent contractor misclassifications. If a violation occurs, the government agency investigating the matter is obligated to report it to the other state and federal agencies which may be affected by the misclassification, potentially opening up the company to an audit by the IRS or the US DOL.
Massachusetts has one of the toughest tests to be met in order to classify someone as an independent contractor, and the penalties for misclassifying vary with the legal requirement which was not met as a result of the misclassification. For example, if a worker was not paid accrued wages or vacation time upon termination, the … Keep reading
As all good lawyers know, having leverage is everything, whether you are doing a transaction or trying to settle a dispute. And what could be better leverage than a court order directing your adversary’s bank to freeze the funds in an operating account? Obviously, such a potent weapon could, and often does, allow a plaintiff to dictate the terms of settlement to the defendant. While being able to do this might sound like a fantasy, Massachusetts courts routinely order a freeze on bank accounts through a mechanism called a “trustee process attachment.” Further, some judges even issue trustee process attachments ex parte, i.e., without the defendant having an opportunity to oppose the request for such relief.
If in-house counsel understand how trustee process attachments work, they can help position their companies to more easily (i) obtain trustee process attachments against future adversaries and (ii) avoid having their own bank accounts frozen.… Keep reading