February 2014


As I have previously warned in prior blog posts here and here, the Massachusetts Wage Act exposes a company and individuals having management responsibility for the company to mandatory treble damages and attorneys’ fees for failing to pay wages.  Because the statute, however, does not define the term “wages,” employees have attempted to apply the Wage Act’s beneficial damages provision to any type of compensation.  A true “bonus” need not be wages and the failure to pay a bonus would then not subject an employer or its management to the risk of treble damages or attorneys’ fees.  Nevertheless, it is not always easy to determine if a particular payment is a bonus or wages.

A recent Massachusetts case, Boesel v. Swaptree, Inc., helped clarify the distinction between wages and a bonus.  Specifically, Boesel discussed three provisions in an employment agreement that can be used to clarify how the payment to an employee should be characterized:

  • Describe a bonus in a provision that is separate from the provision describing base salary.  In Boesel, the plaintiff argued that the discretionary bonus in his employment agreement was earned ratably over the course of the year and was part of
… Keep reading
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As in-house counsel, how would you like to tell your CEO: “While our customer lists, pricing information, and business processes are trade secrets, we can’t sue the independent contractor who stole them because we did not do enough to protect those trade secrets.”  Sound contrived?  Well, that is exactly the ruling one Massachusetts Superior Court judge recently issued in C.R.T.R., Inc. v. Lao. … Keep reading

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In a prior blog post Three Issues In-House Counsel Should Raise Before Asking Employees To Sign Non-Competes, my co-publisher, Shep Davidson, provided suggestions to help in-house counsel ensure that non-competition restrictions on employees were appropriate and enforceable.

As it is Valentine’s Day, we look at three ways in which enforcement of non-competition agreements is like dating.

1.  Has there been a material change in the relationship?  Massachusetts courts have long held that a material change in the terms and conditions of an employee’s employment will void an otherwise valid non-competition agreement.  What constitutes a material change, however, can vary widely depending upon which judge is hearing the case.  Some judges have applied the material change doctrine only where the change was adverse to the employee (Grace Hunt IT Solutions, LLC v. SIS Software, LLC, 29 Mass. L. Rptr. 460, 2012 WL 108825 (Mass. Super. 2012; Lauriat, J.); R.E. Moulton, Inc. v. Lee, 18 Mass. L. Rptr. 157, 2004 WL 1894910 (Mass. Super. 2004; Kottmeyer, J.).  Other judges have applied the material change where the employee had been promoted, demoted and promoted again (Akibia, Inc. v. Hood, No. SUCV201202974F (Mass. Super. Ct. Oct. 09, 2012); Lycos, Inc. v. Jackson, … Keep reading

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In Commodity Futures Trading Comm’n v. Weintraub, the United States Supreme Court noted that:

[W]hen control of a corporation passes to new management, the authority to assert and waive the corporation’s attorney-client privilege passes as well. New managers installed as a result of a takeover, merger, loss of confidence by shareholders, or simply normal succession, may waive the attorney-client privilege with respect to communications made by former officers and directors. Displaced managers may not assert the privilege over the wishes of current managers, even as to statements that the former might have made to counsel concerning matters within the scope of their corporate duties. [Emphasis added.]

While the foregoing may not seem too surprising to some, what if I told you that the new owners of a business can waive the privilege with respect to communications that the former owners had with company counsel solely to use those communications as evidence against the former owners in litigation? Well, that is exactly what the Delaware Court of Chancery recently allowed to happen in Great Hill Equity Partners v. Sig Growth Equity Fund, LLP.… Keep reading

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