Protecting Against Competition by Former Employees Requires Advance Planning

November 27, 2013 By

Protecting information that makes a business successful is a central part of every company’s plan. Employees are never permanent fixtures, and fewer work long-term than they used to. It’s wise, then, to anticipate that they will depart at some point and protect business interests through well-crafted confidentiality and/or noncompetition agreements. The damages that can otherwise flow from an employee’s move to a competitor can undermine profitability or, in some cases, even threaten a company’s survival.

Preventing problems like those requires advance planning. A good place to start is with organization. Businesses must understand the types of information to safeguard and be certain to control how that data is stored, how it’s used, and who has access to it. It’s common to protect pricing material; customer lists; product plans; customer purchase and sales histories; marketing information; and other information that is central to business success. Companies should ensure that only those who need such data at work have access to it. They should maintain rules for data use and ways to track it. Information commonly used or known by some employees – customer contract information, e.g., or pricing structures – are best stored on computers or in files at company offices. [Read more...]

Filed Under: Employee - Employment Law, Employer - Employment Law, Massachusetts Employment Law, Non-competition Agreements

Employers should Audit Wage Practices before Someone Else Does it for Them

November 15, 2013 By

When a company’s employee numbers start to grow, so too does its exposure to a plethora of wage and hour rules. A small business can become “enlightened” about one or more of them in a number of ways, from a complaint by a disgruntled former (or current) worker to a random audit by governmental authorities to a class action lawsuit by opportunistic lawyers. Violations of the law can bring substantial damages that may include civil penalties, tripling of unpaid wages, and reimbursement of an opponent’s legal fees.

In most cases, complaints from individual employees can be handled expeditiously. It’s when employees join together in class action suits or employers are audited by state or federal labor authorities that damage exposure becomes dangerous. Audits are common in Massachusetts and can revolve around worker classifications, weekly wages or overtime payments, contributions to the unemployment fund, and other issues. As companies grow, then, they should audit their own policies in these areas to ensure they comply with applicable laws. Waiting to do so until an auditor or a lawsuit arrives at the door can cost tens or even hundreds of thousands of dollars. [Read more...]

Filed Under: Employee - Employment Law, Employer - Employment Law, Independent Contractors, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions

Can Real Estate Agents Work as Independent Contractors?

September 15, 2013 By

The common practice of paying real estate agents as independent contractors and denying them the benefits of employment is under legal fire. A class action lawsuit now awaiting decision at the Massachusetts Court of Appeals tests whether the real estate industry can continue to ignore a law that effectively bans the use of contractors in Massachusetts.

In a rather surprising decision in July, a superior court judge decided that they can. He relied on a Massachusetts statute that permits brokers to employ their real estate agents “either as an employee or as an independent contractor.” Noting a conflict between this language and the terms of the Independent Contractor Statute (Mass. Gen. L. ch. 149, §148B ), the court opted to ignore the latter law. The state legislature, it concluded, intended that agents be contractors despite provisions to the contrary in the Independent Contractor Statute. [Read more...]

Filed Under: Employee - Employment Law, Employer - Employment Law, Independent Contractors, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions

Limits Quickly Placed on Associational Discrimination Lawsuits

September 3, 2013 By

Not so fast, says the Massachusetts Court of Appeals. On the heels of the state’s highest court’s ruling that employees can sue their employers for discrimination against them based on their association with handicapped people, it promptly noted that not all associations are created equally. In Lashgari v. ZOLL Medical, which was decided a mere 3 weeks after the SJC affirmed that associational discrimination claims can be brought under the Massachusetts anti-discrimination statute, the Court of Appeals affirmed a lower court’s dismissal of a suit brought on the same basis.

Dismissals of lawsuits generally occur immediately after a suit is filed and help employers avoid the costs of defending them. The Lashgari case is significant in this respect as it begins to distinguish the factual patterns that will and will not state valid associational discrimination causes of action. The employee here asserted that his ability to work extra hours was proscribed by his son’s autism, which required constant care. He was demoted as a result and, he claimed, consequently suffered severe emotional distress. Eventually, the employee quit his job, claiming he’d been constructively discharged by his employer’s discriminatory behavior. Calling the allegations “conclusory and speculative,” the Court of Appeals found they were not sufficient to plausibly state a case of associational discrimination. The court was, of course, mindful of the SJC’s prior decision. It nonetheless held that employees must connect alleged discriminatory conduct to the particular association concerning which they complain.

Filed Under: Discrimination, Employee - Employment Law, Employer - Employment Law, Massachusetts Employment Law, Uncategorized, Wrongful Termination

Court Dismisses Aiding and Abetting Suit under Independent Contractor Statute

August 16, 2013 By

A superior court judge has decided that a third party cannot be sued for “aiding and abetting” a violation of the Massachusetts Independent Contractor statute. Despite decisions by other courts allowing such claims to survive at the pleading stage, Justice Brian Davis ruled that, because the underlying suit against a putative employer was statute-based and did not assert a common law tort cause of action, aiding and abetting liability does not exist.

The August 7, 2013 decision is significant to a broad range of companies that face class action lawsuits for aiding and abetting the alleged misclassification of employees. Floodgates were opened in this area by a federal court’s late-2011 decision denying a defendant’s motion to dismiss a cause of action for aiding and abetting the violation of Mass. Gen. L. ch. 149, s. 148B. That statute indisputably does not provide for such liability. Neither, it plainly appears, does the common law of aiding and abetting, a form of civil conspiracy that requires proof of an underlying tort along with the providing of substantial assistance by the aider/abettor.

The defendant is a New York company that acts as an administrator. It was initially accused of employing drivers who were allegedly misclassified as contractors, but those claims were dropped voluntarily on its motion to dismiss. Despite the fact that all events occurred within what is asserted to be an employment relationship, the defendant remains in the case on a claim it violated the Consumer Protection Act (Mass. Gen. L. ch. 93A, s. 11).

Filed Under: Employee - Employment Law, Employer - Employment Law, Independent Contractors, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions

Class Action Waivers Okayed for Employment Disputes

August 6, 2013 By

Following a mandate from the U.S. Supreme Court, the Massachusetts Supreme Judicial Court (SJC) has held that a contractual waiver of class action claims in an employment dispute must be enforced. The plaintiffs in the ongoing case are franchisees who claim they serve as employees of the defendants but are misclassified in order to deny them wages and benefits. They seek repayment of tens of thousands in franchise fees along with damages under the Massachusetts Wage Act, a statute that mandates the tripling of all damage awards.

The plaintiffs hoped to obtain class certification, a move that would allow them to join all similarly situated franchisees in their litigation, thus threatening the defendants with multi-million dollar damages. Class action suits are intended to make litigation feasible for individuals who suffer relatively small damages but are part of large groups of people suffering from similar alleged wrongs. As part of their franchise agreements, however, the plaintiffs agreed to mandatory arbitration of all disputes on individual bases. A lower court refused to enforce the arbitration clause and class action waiver, citing Massachusetts public policy. In reversing, the SJC followed  Supreme Court decision holding that class action waivers are enforceable. The SJC concluded that, unless a waiver effectively deprives a plaintiff of the ability to redress complaints, it must be enforced. [Read more...]

Filed Under: Employee - Employment Law, Employer - Employment Law, Independent Contractors, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions

SJC Confirms that Discrimination based on Association with Another is Illegal in Massachusetts

July 23, 2013 By

It’s now officially the law of the Commonwealth, even if last week’s decision by the Supreme Judicial Court (SJC) was predictable in confirming what the Massachusetts Commission Against Discrimination (MCAD) decided decades ago. If you are fired from your job based on your association with another person, you have a colorable claim of your own against your employer even if you are not a member of the protected class of persons that forms the foundation for your lawsuit.

Flagg v. Alimed, Inc. was decided by the SJC on July 19. It involved a long-term employee who was fired because his wife suffered the effects of a debilitating brain tumor that left her totally disabled. The employer fired the employee to avoid responsibility for the wife’s medical care, the court noted, and tried to hide its motivation for doing so. Noting that firing an employee because he or she was disabled would be discriminatory under Mass. Gen. L. ch. 151B, the court held that the Flagg employee’s association with his disabled wife was also protected by law.

“When an employer subjects an otherwise satisfactory employee to adverse employment decisions premised on hostility toward the handicapped condition of the employee’s spouse, it is treating the employee as if he were handicapped himself–that is, predicated on discriminatory animus, the employer treats the spouse’s handicap as a characteristic bearing on the employee’s fitness for his job. The employee is thereby subjected to the type of ‘prejudice, stereotypes, or unfounded fear’ relating to handicapped individuals that c. 151B, § 4(16), seeks to protect against,” the SJC held. This conclusion, the court noted, is consistent with 30 years of MCAD decision-making. [Read more...]

Filed Under: Discrimination, Employee - Employment Law, Employer - Employment Law, Massachusetts Employment Law, Wrongful Termination

Management of Contractual Disputes Among Physicians

July 16, 2013 By

Three doctors formed a partnership and developed substantial disputes concerning the operation of their practices, including disagreements over workloads, hours of work, the employment in a key position of the wife of one doctor, and a lack of profitability. We represented one of the physicians. We first drafted an employment contract to help manage the partnership arrangement. After money problems threatened the practice’s survival, our client asked us for help extricating himself from his agreements while protecting his patients. He also asked that we investigate the suspected fraud by one of his partners. Our client was not from Massachusetts and wanted to close his local practice and return to his home to work as a physician.

Result:  After intense negotiations and the eruption of litigation, a settlement was reached. Our client was able to close his Massachusetts practice and return to his home state, where he re-commenced his medical practice.

Filed Under: Representative Cases

Wage Act Extended to Employee Who Resides in Florida

July 16, 2013 By

In the second decision to extend the reach of Massachusetts employment laws outside its borders, the Appeals Court in June decided that a resident of Florida could sue the CEO of his Massachusetts employer for the harsh penalties provided by the state’s Wage Act. The Court distinguished a prior case that held otherwise, reasoning that it involved an employee who worked outside the United States. Because the Florida-based employee in Dow v. Casale working in various U.S. locations, travelled and occasionally worked in Massachusetts, and directed a broad array of business to the Massachusetts office of his employer, among other things, his situation is different, the court concluded.

“Here, as compared to any other State, Massachusetts has by far the most significant relationship not only to [employers] Starbak and Casale as citizens of the Commonwealth, but also to Dow’s employment relationship with them,” the Court found, applying choice-of-law principles to its analysis. “Indeed, given the particular nature of Dow’s work, his employment with Starbak had no substantial relationship to any place but Massachusetts….In that sense, his work sensibly may be viewed as having ‘occurred’ in Massachusetts where it benefited Starbak, no matter where he physically was located from day to day.” [Read more...]

Filed Under: Employee - Employment Law, Employer - Employment Law, Massachusetts Employment Law, Massachusetts Wage Act, Wages and Commissions

Defense against Lawsuit Claiming Discriminatory Firing Decision

June 16, 2013 By

We represented a 75-employee public service organization on the North Shore that was sued after it terminated a female employee for poor performance and bad workplace behaviors. The woman had taken a maternity leave about six months before she was fired. She claimed she was fired for taking the leave and because she required break time to pump milk for her child during the work day. In fact, the employee’s performance had been poor long before her maternity leave. After she returned, she made numerous errors and was highly defensive when confronted. After the employee tried surreptitiously to document allegedly bad behaviors by others, she was fired. The employer acted after warning and counseling the employee in accordance with its policies, which were previously reviewed and revised by our office.

Result:  The case was successfully defended by our office. The MCAD dismissed it for lack of probable cause. The Complainant’s subsequent appeal was rejected and the case was resolved favorably for our client.

Filed Under: Representative Cases
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