I have written a number of blog posts on liquidated damages over the years, and one of the foundational points under Massachusetts law is that they will be enforceable if, but only if, at the time the contract is executed:
- It would be difficult to determine the damages that would accrue if the contemplated breach were to occur; and
- The liquidated amount designated in the contract is a reasonable estimate of the actual damages that a party would suffer if the breach were to occur.
In Cummings Properties v. Hines, the Supreme Judicial Court emphatically re-affirmed Massachusetts’s commitment to this “single look” doctrine.
In 2016, Cummings Properties entered into a five-year lease with MCO, Inc., and Darryl Hines, MCO’s sole officer and director, signed on as guarantor. The lease provided that if MCO defaulted, Cummings could terminate and the “entire balance of rent due . . . immediately [would] become due and payable as liquidated damages, since both parties agree that such amount is a reasonable estimate of the actual damages likely to result from such breach.”
Within only a few months of signing the lease, MCO defaulted on its payment obligations and was evicted. One … Keep reading
Most people expect that by signing a contract they are going to be bound by it absent special circumstances. But do situations where the signatory is unsophisticated and/or doesn’t even speak the language in which the contract is written qualify as such special circumstances? As the Massachusetts Appeals Court recently confirmed in Lopez Rivera v. Stetson, the answer to that question is a resounding No!
Carlos Lopez Rivera was awaiting surgery and signed a form stating that any disputes regarding the surgery would be subject to arbitration. Notwithstanding the foregoing, Lopez Rivera later filed a malpractice action against Steven Stetson in the Massachusetts Superior Court. Stetson moved to dismiss based on the arbitration clause in the form Lopez Rivera signed, but Lopez Reiver countered that because he did not speak English and no one translated the form to him, his supposed agreement to arbitrate was invalid based on the doctrines of fraud, mistake and unconscionability.
The Superior Court agreed with Lopez Rivera, noting that he did not speak English and no translation of the form was provided to him. Stetson appealed that ruling, and the Appeals Court acknowledged that a party who signs a contract can avoid his … Keep reading
A recent decision from the Superior Court of Massachusetts in MIM Mass Convertible Note v. MIM Management, LLC reminded me of other posts I have written warning that a seemingly clear choice of law provision is not always clear enough.
In MIM Mass Convertible Note, the parties had a business relationship memorialized by a promissory note and Loan Agreement, paragraph 23 of which stated that “The laws of [South Carolina] shall govern in the interpretation, enforcement, and all other aspects of the obligations and duties created under this Agreement and all other instruments referred to in this Agreement.” Sounds pretty clear and all-encompassing, right…?
The relationship between the parties eventually soured, and the plaintiff filed suit. The defendant answered, and filed counterclaims, including a counterclaim for deceptive and unfair conduct in violation of Massachusetts General Laws Chapter. 93A.
The plaintiff moved to dismiss the Chapter 93A counterclaim, arguing that the choice of law provision in the Loan Agreement limited claims to those available under South Carolina law, and Chapter 93A was a Massachusetts statute. In addressing that motion, the Superior Court emphasized that the choice of law provision in the Loan Agreement was self-limiting and only … Keep reading
No company wants to be sued by its current or former employees, particularly for discrimination claims. Even if you prevail, litigating such claims inevitably exposes you to public stigma and internal discord. In such situations, an early “procedural victory” can be worth much more than the mere cost savings of legal fees. So, wouldn’t it be nice if you could do something now to either decrease the chance of such a suit being filed and/or increase the chance of obtaining a quick, procedural victory if litigation does ensue? As a recent decision in the Federal District Court, Morales v. FedEx, makes clear, a contractual “statute of limitations provision” may allow your company to achieve these objectives.
Hector Morales began working for Federal Express in 2015 and was terminated on July 31, 2017. In May 2018, Morales filed a claim with the Massachusetts Commission Against Discrimination, alleging that his termination was based on racial discrimination and was retaliatory. In July of 2020, Morales filed a complaint in the Federal District Court, alleging, among other things, that FedEx had discriminated against him in violation of 49 U.S.C. § 1981.
Eventually, FedEx moved for summary judgment on the § 1981 claim … Keep reading
I just came across a decision issued in the District of Massachusetts, Logue v. The Rand Corporation, and it reminded me of some key aspects of the attorney-client privilege related to in-house counsel about which I have written over the years. Some of those principles include the following:
… Keep reading
While many attorneys aspire to be a General Counsel, the path to becoming a company’s chief legal officer can be even more convoluted than becoming a partner at a law firm. Recently, it was my pleasure to host an engaging panel discussion about what it takes to become a GC – and what it takes to stay there – amongst three outstanding general counsels: Jason Ellis of Staples, Thanda Fields Brassard of Fiduciary Trust of New England, and Levina Wong of Veson Nautical.
Discussion topics included:
- The skills needed to be a General Counsel and how to get them
- How the GC interacts and interrelates with the Board of Directors and C-Suite.
- What you must do as General Counsel to understand the company’s business and stay in touch with the people who run it — from the CEO to the hourly employees.
Click here to watch the webinar.… Keep reading
As discussed in a blog post last year, Uber learned the hard way that with online agreements, it can take more than a simple provision stating “all disputes must be arbitrated” to ensure that your customers cannot sue you in a court of law. In a recent decision issued by the Massachusetts Superior Court (Good v. Uber Technologies, 2022 WL 10448746), Uber was foiled again – even though it had initiated what it must have thought were fool-proof protocols to prevent it from being hauled into court.
William Good had been an Uber user since August 13, 2013, and on April 25, 2021, he tried to order a ride but was blocked by a pop-up message stating: “We’ve updated our terms.” The pop-up message went on to say: “We encourage you to read our updated in Terms in full.” Among those terms was a provision stating that Uber’s customers were “required to resolve any claim against Uber … in arbitration.”
Many states are now enacting laws to further promote pay transparency, and if you have employees in those jurisdictions, you need to take note. Not surprisingly, California’s Pay Transparency Act is a leading example of this and has a number of important and new requirements.
First, California employers with 15 or more employees will be required to include pay scales in new job postings. This obligation extends to employers engaging in a third party for recruiting (e.g., job posting boards). Employers, therefore, should ensure that contracts with third parties include this requirement and appropriate indemnification clauses.
Second, California now – like Massachusetts (see M.G.L. c. 149 § 105A(c)(2)) – prohibits employers from asking about an applicant’s salary history or using salary history as a factor in a hiring decision. However, if an applicant voluntarily discloses salary information, employers may consider that information in determining the salary for that applicant. Further, employers may ask about an applicant’s salary expectations – which is a great way to engage in a conversation that might yield information helpful to hiring without risking a statutory violation.
Third, California now requires employers to disclose a position’s pay scale to an applicant … Keep reading
While I can’t remember anything specific from my 1-L Contracts class, I’m sure that is where I first was exposed to the concept that an integration clause could prevent a party to a written contract from claiming that other terms had been agreed to orally but, for some reason, had not been memorialized in the document. As the First Circuit recently discussed in Guldseth v. Family Medicine Associates, LLC, however, integration clauses can come in different shapes and sizes. As an initial matter, there is the question of whether the clause results in the contract being fully integrated or only partially integrated:
By fully integrated, we mean a statement which the parties have adopted as a complete and exclusive expression of their agreement. Compare that to [a] partially integrated agreement, which means the agreement is intended as a final expression of one or more terms, but not as the complete and exclusive expression of all terms to which the parties agreed. The degree of integration in turn dictates the degree to which earlier agreements are discharged by the later-formed agreement [and] whether an agreement is fully integrated is … an issue of fact.”
Indeed, because the scope … Keep reading
Under the Massachusetts Wage Act, M.G.L. c. 149 § 150, a terminated employee is entitled to be paid all wages, including accrued vacation time, on the day of termination, and the failure to do so makes the employer liable for mandatory treble damages and attorneys’ fees. As the Supreme Judicial Court recently ruled in Reuter v. City of Methuen, while this rule may seem harsh and offers no “good faith exception,” that is what the legislature intended. Indeed, Reuter is a cautionary tale from which in-house counsel should take note.
After having worked for the City of Methuen for 25 years, Beth Reuter was convicted of larceny, prompting the City to terminate her employment. At the time of her termination, Reuter was owed $8,952.15 for accrued vacation time, which the City did not pay until three weeks later. Eventually, Reuter’s counsel noted that the City’s conduct violated the Wage Act and demanded triple the accrued vacation pay and attorneys’ fees (less the $8,952.15 already paid). Reuter filed suit, and the City took the position that because it paid the accrued vacation amount before any demand had been made and prior to the lawsuit being filed, the most for … Keep reading