Often, when settling a dispute, I include a general release that goes something like this:
Releasors hereby forever release and discharge Releasees from, and/or based on, any and all suits, etc. which Releasors ever had, now have or may in the future claim to have against Releasees, arising out of any acts or conduct that occurred from the beginning of time to the date of this Agreement.
Plainly, such a release is intended to “wipe the slate clean” and give the parties the comfort of knowing that neither can be sued by the other for any conduct that occurred up to that point in time – whether the other party knows about the conduct/claim or not. As a recent case from the Superior Court, Fratea v. Unitrends, Inc., reminds us, however, a general release of this sort will not bar a former employee from pursuing a claim under the Massachusetts Wage Act.
When Michael Fratea left the employment of Unitrends, he executed a release in exchange for the payment of $1,875. Thereafter, Fratea filed suit against the company and two individuals, alleging a violation of the Wage Act because he was not paid overtime compensation. The defendants … Keep reading
On November 22, the U.S. District Court for the Eastern District of Texas granted the request of 21 states to temporarily halt the effective date the U.S. Department of Labor’s Final Rule (“Final Rule”) raising the salary threshold to qualify for the white collar exemptions from minimum wage and overtime requirements from taking effect. Accordingly, the Final Rule will not take effect on December 1, 2016.… Keep reading
Under the Massachusetts Weekly Payment of Wages Act (“Wage Act”), the President, Treasurer and “any officers or agents having the management of such corporation” are considered to be employers and are subject to individual liability for failing to comply with its requirement. In a previous blog post, Managers of LLCs Can Be Personally Liable Under the Massachusetts Wage Act, I had written about Cook v. Patient Edu, LLC, where the Massachusetts Supreme Judicial Court clarified that managers of limited liability companies (not just the officers of a corporation) could be held individually liable under the Wage Act. In Cook, the SJC concluded that it did not matter whether the entity was a limited liability company or corporation, and determined that “individuals with the authority to shape the employment and financial policies of an entity [were] liable for the obligations of that entity to its employees.”
In a recent unpublished decision, Segal v. Genitrix, LLC, the Massachusetts Appeals Court, relying on Cook, appears to have expanded the scope of individual liability under the Wage Act to certain equity holders of limited liability companies.
… Keep reading
Historically, Massachusetts courts routinely ruled that it was a violation of the Massachusetts Wage Act to fail to pay an employee who had been promised payment for her work only after the employer received sufficient funding. For example, in Stanton v. Lighthouse Financial Services, Inc., U.S. District Court Judge Nancy Gertner found not only once, but twice, that John Stanton was an employee under the Wage Act, was entitled to payment of deferred compensation under his employment contract and confirmed that there was no carve out from the Wage Act’s requirements for startups. In reaching her decision, Judge Gertner reasoned that a deferred compensation agreement where the compensation was forfeited violated the Wage Act provision prohibiting the entering into of a special contract to avoid Wage Act obligations. Since Stanton, a number of Massachusetts state and federal court cases have ruled that compensation contingent upon a company’s receiving certain levels of funding were wages that were required to be paid in accordance with the Wage Act and required such wages to be paid promptly and upon termination of employment – even if funding had not then occurred.
In what could be viewed as a new twist, Superior … Keep reading
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
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
… Keep reading
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
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
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
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