Renee Inomata


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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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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Last week I had the pleasure of being a panelist at the Association for Corporate Growth (Boston) and the Turnaround Management Association (Northeast) joint conference on “Challenges and Opportunities in US Manufacturing.” A theme common to all of the speakers was the need to address workforce issues, whether with respect to training, engagement or transition. 

The challenges posed by human capital can often propel or derail improvement strategies, yet certain employment law issues are often overlooked or only addressed at the last minute. If in-house counsel are aware that an improvement plan that requires the exit of employees is being considered, the following issues in advance may help alleviate some last minute problems.

  1. Be sure that all employees have up-to-date, enforceable post-employment restrictive covenants. After implementing a layoff or termination of employees, the last thing that a company needs is to be surprised by a former employee’s attempt to use the company’s confidential information or goodwill to give a competitor an advantage. Reviewing existing confidentiality, non-solicitation and non-competition agreements for enforceability under applicable state laws, and even considering the company’s plan (and costs) for enforcement of post-termination restrictive covenants, will go far to help avoid unpleasant surprises.
… Keep reading
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For entrepreneurs starting a new business, the focus often is on developing the products or services being offered by the business and, maybe, financing for getting (and keeping) the business off the ground. Yet, regardless of whether the business offers products or services, no business can succeed without people. Therefore, setting up proper intake systems for hiring at an early stage is critical in order to limit exposure to employment issues as the business grows. One easy way to do this is by using a hiring/on-boarding checklist like the one set out below. While this checklist is not intended to be a comprehensive list of issues that all businesses need to consider when hiring, it should provide at least some general guidelines for hiring and on-boarding new employees. Every state has different laws applicable to hiring and on-boarding, so be sure to check your applicable state’s laws.

Prior to hire:

  • Prepare job application (for Massachusetts employees, you cannot request criminal history information and must include a statement that requesting the candidate to undergo a lie detector test is unlawful).
  • Prepare employee handbook, including “at will” status, hours of work, absence policies, anti-harassment/anti-discrimination policies (be specific about no retaliation and
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Because ’tis the season to give, The In-House Advisor would like to give in-house counsel the following reminders so as to limit their companies’ holiday exposure:

Tip 1:  Religious discrimination and accommodations

As we all know, while the “holiday” season in December often refers to Christmas, there are many other religious holidays celebrated by workers, both now and throughout the year.  In-house counsel may wish to take the opportunity now to advise their companies’ managers to allow, and not interfere with, an employee’s observance of religious obligations.  For purposes of employment discrimination laws, the definition of “religion” is much broader than one might think and is not limited to major, organized religions.  Rather, “religious beliefs” protected by discrimination laws is defined as:

Moral or ethical beliefs about right and wrong that are sincerely held with the strength of traditional religious views.

It would behoove employers to carefully consider scheduling of work on holidays and planning and scheduling of holiday celebrations with an eye towards religious considerations. Likewise, being mindful of the religions practiced by company employees may avoid issues with respect to holiday parties.  For instance, depending upon the make-up of your workforce, scheduling a party for Friday night … Keep reading

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In a June 13, 2013 decision, the Massachusetts Supreme Judicial Court clarified that managers of Limited Liability Companies (LLCs) can be individually liable for violations of the Massachusetts Weekly Payment of Wages Act, and, thus, be personally responsible for treble damages and attorneys’ fees.

In Cook v. Patient Edu, LLC, the lower court had originally dismissed claims asserted against the two managers of the defendant LLC for failure to pay more than $68,000 in compensation owed to the plaintiff under an employment contract.  In dismissing the claims, the lower court reasoned that because the Wage Act, by its plain language, only imposes liability upon the “president and treasurer of a corporation and any officer or agent having the management of the corporation or entity;” it does not impose liability on “managers of a limited liability company.”  The SJC, taking the case from the Appeals Court on its own motion, reversed the lower court’s decision, ruling that “… a manager or other officer or agent of an LLC, limited liability partnership or other limited liability business entity may be a ‘person having employees in his service,’” and thus may be civilly or criminally liable for violations of the … Keep reading

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As summer approaches, many companies will face the tempting invitation from students to work “for free” as interns.  While some companies may consider jumping at the chance to enhance their workforce without incurring the costs of compensation, health insurance and other benefits of being an employee, as the U.S. District Court for the Southern District of New York just reminded the business community, having unpaid interns can be perilous if you don’t know – or if you ignore – the law.

Like many businesses, Fox Searchlight Pictures, Inc. hires a number of unpaid interns every year.  In 2011, however, several of their “interns” sued, claiming that they should have been paid for the hours they had worked performing routine tasks that would otherwise have been performed by regular employees in connection with the production of the film Black Swan.  On June 11, 2013, U.S. District Court Judge William H. Pauley III issued a ruling in which he agreed that two interns, Eric Glatt and Alexander Footman, were “classified improperly as unpaid interns and are ‘employees’…”  of Fox Searchlight.  Judge Pauley went on to say that these putative interns:

…worked as paid employees work, providing an immediate advantage to

… Keep reading
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Beware of Choice of Law When Drafting Independent Contractor Agreements


As we have previously posted in Choice of Law in a Contract Can Be Critical, Ensuring Your Dispute Is Resolved in the Forum You Want Is Not Always Easy, and Selection of Forum Other Than Massachusetts May Not Avoid Wage Act Enforcement, choice of law and forum selection provisions should be conscious decisions made in the context of each specific contract.  If in-house counsel do not carefully draft these provisions in their independent contractor or consulting agreements, they may be overlooking a possible means of avoiding or minimizing liability in Massachusetts under the so-called Massachusetts Independent Contractor Law (M.G.L. c. 149, §148B), the Massachusetts Weekly Payment of Wages Act (M.G.L. c. 149, §148) and/or the Massachusetts minimum wage and overtime laws.  Because these statutes do not contain any explicit geographic restriction on their application, their applicability to non-Massachusetts residents performing work outside of Massachusetts for Massachusetts companies has been unsettled.  (I have previously posted here and here on the staggering ramifications of misclassifying a worker as an independent contractor in Massachusetts.) 

In Taylor v. Eastern Connection Operating, Inc., the Massachusetts Supreme Judicial Court took up the issue of whether New York residents who perform … Keep reading

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A favorite saying of my mentor and colleague in the Labor and Employment Group here at Burns & Levinson is “no good deed goes unpunished.”  Over my years of practice, I have found that this phrase oft comes to mind when an employer just wants to “do the right thing” or wants to be generous to an employee by giving the employee money, or time off, to which the employee is not entitled.  The phrase may be one that is recently being muttered around Malden City Hall, in light of the Massachusetts Supreme Judicial Court’s (SJC) recent decision in Dixon v. City of Malden.  … Keep reading

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As I mentioned in some of my prior posts, the Massachusetts Weekly Payment of Wages Act (“Wage Act”) poses many challenges to employers due, in part, to the vagueness of its terms, the strict liability it imposes on employers (and individuals having management of the company), and the threat of treble damages and attorneys’ fees.  One thing is clear, however: commissions are considered “wages” under the Wage Act if they are “definitely determinable” and have become “due and payable.”  While many in-house counsel and employers are aware of this, they mistakenly assume that their company can avoid violating the Wage Act if the company’s commission plan states that commissions are payable: (a) only if the employee is employed at the time the employer decides to pay them, or (b) only at the employer’s discretion.  As Prudential Insurance Company of America recently found out, however, simply including such a clause may not provide enough protection if the plan does not clearly address when commissions are “definitely determinable” and when they are “due and payable.”

Prudential had an elaborate nine-page document outlining its Regional Coordinators’ Sales Compensation Plan.  One of its long-time employees, Christopher McAleer, claimed that he was terminated … Keep reading

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