Attorney General Proposes Regulations to Govern Massachusetts Sick Leave Law

In accord with the new sick leave law passed by Massachusetts voters in November and set to take effect on July 1, 2015, the Massachusetts Attorney General’s office has issued draft regulations. Once adopted, the AG’s rules will govern sick leave issues in substantial respects by filling in gaps in the law and adding important interpretations. Following are some highlights of the AG’s current proposal.

— Sick leave accrual will apply to all employees, broadly defined to include anyone who “performs services for an employer” as set out in the state’s independent contractor statute. It is thus highly unlikely that businesses will avoid the accrual and pay requirements of the new statute by classifying workers as contractors.

— All employees whose primary place of work is in Massachusetts will be covered by the law, even if they also work in other states.

— Workers who are employed on April 1, 2015 will start accruing leave (at the rate one hour for every 30 worked) on July 1 and can use it as it accrues. Others will also accrue leave beginning July 1 (if then employed) but cannot use it until employed for 90 days. [Read more…]

Deadline for Implementing New Sick Leave Policies is Approaching

For those not already prepared, it’s time to start planning for pending changes to Massachusetts’ sick leave requirements. The new law that was adopted by voters last November is scheduled to take effect on July 1, 2015. By that date, all employers should have reviewed their existing policies for compliance with the new requirements.

All Massachusetts employees will be entitled under the new law to accrue sick leave at the rate one hour for every 30 hours they work, with a cap at 40 earned hours per year. For employers of 11 or more workers, sick leave must be a paid benefit. Employees can begin to use sick leave 90 days after accrual begins. Though they can carry sick time over from year to year, employers can cap annual usage at 40 hours. Sick leave need not be paid out when an employee leaves work.

The law also provides that sick leave can be used in four circumstances. 1. When a worker’s physical or mental health require. 2. When the health of a child, spouse, parent, or parental in-law requires. 3. For regular medical appointments of certain family members. 4. To deal with certain impacts of domestic violence. Employers should take care to ensure their policies cover all four of these areas and otherwise comply with the statute’s requirements. Written policies are advisable.

State’s Highest Court Finds that Boston Cab Drivers are Independent Contractors, not Employees

The Massachusetts Supreme Judicial Court today released an important decision regarding the status of Boston cab drivers, concluding that the drivers were properly classified as independent contractors and not as employees. In addition to putting asunder the apparent plans of the Plaintiffs and their lawyers for huge paydays, the court’s ruling sheds lights on situations when the broad Massachusetts Independent Contractor Statute may not apply to turn an otherwise agreed-upon business relationship into an employment agreement.

The Boston cab industry is regulated under a 1930s grant of authority to the city’s police commissioner. Cab drivers must, among other things, obtain medallions and undergo specific training in order to conduct business. They have long been independently employed individuals who frequently leased cabs and medallions from their owners, who were named as the defendants in the lawsuit. The court rejected the plaintiffs’ arguments that they provided services to the defendants and therefore must be treated as employees. Although it found that the Independent Contractor Statute applied to the taxi cab industry, it concluded that the drivers met the three criteria set out in it. The case is Sebago v. Boston Cab Dispatch, Inc.

Recent Case Highlights Issues for Employers Seeking to Enforce Non-compete Agreements

In a case that highlights the difficulties of enforcing even valid noncompetition agreements against former employees, a superior court judge recently refused an enforcement request against former employees working for a competitor, despite apparent violations of their agreements. The terms of the parties’ contract notwithstanding, the court refused to enforce the restrictions against competition because the employer was unable to demonstrate that they either possessed proprietary information or would damage their former employer’s legitimate business interests by selling competitive products to its customers.

The result is a common one in the noncompetition enforcement world, where the existence of a written agreement barring certain post-employment activity is not nearly enough, standing alone, to support a court order blocking a worker from his/her new job. Employers must also demonstrate they have a substantive business reason for such an order. Generally, that standard can be met by showing that a former employee is competing unfairly by, for example, using trade secrets or confidential information that belongs to the company. More commonly, employers try to satisfy the requirement by demonstrating that the worker is damaging what’s termed its “goodwill” — the relationship it has established with its customers — by calling on them to sell a competitor’s products.

Employers’ claims often bog down on this latter issue, since a former employee normally argues that personal relationships with customers belong to him/her, not to the company. The argument is often compelling, particularly when salespeople are involved. In many cases, employers trying to overcome this problem are unprepared. They cannot adequately counter a worker’s contention that no one else at the company ever met relevant customers, and they often appear in court without hard evidence that a former employee even improperly solicited a customer. If customers track down a former employee at a new job, an anti-solicitation provision in a noncompetition agreement may not even come into serious play in an enforcement effort.

Employers with legitimate interests to protect should take note of these issues and prepare in advance to protect them. Broad, generally applicable non-compete forms may be insufficient and, in many cases, efforts to block employment is viewed by courts as excessive. A carefully drawn noncompetition agreement that applies to each employee’s particular job coupled with adequate protection of confidential data are probably the best ways to ensure that former workers cannot damage a company’s interests in the marketplace.

Large Jury Verdict Highlights Risks Tied to Misclassification of Workers

One commonly overlooked risk to misclassifying workers as independent contractors rather than employees was recently highlighted when a jury awarded more than $500,000 to a painter who was hurt when he fell from a ladder while working at an apartment building. The problem: the putative employer and owner of the building did not have workers’ compensation insurance because, he claimed, he did not have any employees. The jury’s disagreement led to the large damages award, which exceeded $700,000 with interest and costs.

Under Massachusetts law, all employers are required to provide workers’ compensation insurance to their employees. Most do so through insurance policies while some choose to be self-insured. Employers who fail to provide coverage can face penalties and, as here, lawsuits from injured workers. While many companies who use independent contractors deal with these risks by requiring them to obtain their own accident policies or providing coverage for workplace injuries to them, the defendant here apparently failed to do so.

The Massachusetts independent contractor statute requires all workers to be treated as employees unless they are free from control in the performance of their duties; perform work that is outside the scope of a company’s normal course of work; and operate their own independent businesses. Penalties for violations of the law can be severe. In addition to the lawsuit successfully pursued here, workers can seek back wages, tax liabilities, and other damages. State agencies can perform audits, assess back wages and other expenses, and impose penalties. Offending employers can be forced to pay a worker’s legal fees, and triple damage awards are mandatory in private cases.

Massachusetts Domestic Workers Bill of Rights Takes Effect April 1, 2015

The new Massachusetts domestic workers statute — captioned in the Legislature as a “Bill of Rights” for this class of employees — is set to take effect on April 1. It provides  variety of rights to housekeepers, nannies, caregivers, cooks, and others who work in residences across the Commonwealth.

The law was enacted in June 2014. Among its highlights are requirements that individuals who work more than 40 hours per week in covered job categories receive a 24-hour rest period each week and a 48-hour rest period each month; that employees who don’t live at the home where they are providing labor be paid for every hour they work up to 24 consecutively; that, for those employees who do live in the home, sleep-time hours deductions and meals/ lodging deductions be written; and that domestic workers receive maternity leave rights. The statute also requires employers of domestic workers to keep records of wages paid and hours worked. It grants privacy rights to domestic employees, who may also request job reviews from their employers. Advance notice or severance pay may be required when employment of live-in workers is terminated without cause. Babysitters are not covered by the new statute.

The statute also expressly prohibits sexual advances that are tied to a domestic worker’s job security or benefits. Sexual harassment of domestic workers is also expressly prohibited. The remedies provided by the Massachusetts Anti-Discrimination Statute, Mass. Gen. L. ch. 151B, apply. They include potential damages for lost wages, emotional distress and sometimes punitive damages, and legal fee reimbursement.

Inappropriate Sexual Behaviors by a Supervisor

Our client was an employee of a large package delivery company. After experiencing what she believed to be inappropriate sexual behaviors by a supervisor, she reported the conduct to his superior and asked that it stop. She did not file nor did she wish to file a harassment or discrimination complaint. Though she was assured by upper management that the supervisor would curb his conduct going forward, our client soon became the target of investigations into her attendance and related issues. She was fired several times for minor infractions that were previously ignored and were common among staff. Though the company rescinded the firings each time, our client ultimately declined to return to work without assurances that she would not suffer further retaliation. When the company refused to provide it, she filed suit.

Result: After many years of litigation at the MCAD that included the dismissal of the case and, in a very rare development, its reopening after our firm located a percipient witness to the retaliation and successfully argued that his testimony was fraudulently concealed by the employer, we were able to settle the case for a substantial sum just short of an MCAD trial. The entire process took nearly 10 years, but the client’s position was fully vindicated.

Multi-day Sexual Harassment Training Program For Small Business

Our client was a design and construction company of about 150 employees. After it was threatened with a sexual harassment lawsuit by a former employee, it asked us to devise a training program aimed at reducing risks of future problems. The client’s workforce includes employees of both genders and all ages. Some work solely in the office on computer screens, others work solely in the field at construction sites, and still others travel between the two, interfacing with designers and contractors. The diversity in ages, experience levels and personal outlooks on appropriate workplace behaviors in general and discrimination issues in particular created a challenge to effective communication of the information necessary to achieve the client’s objectives.

Result:  After visiting the work site and interviewing key personnel to gain an understanding of the workforce and the workplace, we devised and implemented a multi-day sexual harassment training program. Employees were grouped based on jobs performed and authority levels. Each attended a training session that covered the same general information but was designed for the particular audience. When each was completed, attendees demonstrated a working knowledge of essential sexual harassment principles.

Legislators Again Propose Banning Noncompetition Agreements in Massachusetts

Despite past failures, including the defeat of bills proposed by former Governor Deval Patrick in 2014, the Massachusetts Legislature is again taking up the idea of banning noncompetition agreements in the Commonwealth. Several proposals were submitted at the start of the new session in 2015. Given proponents’ track record, success this year seems unlikely.

One proposal would apply prospectively to ban the enforcement of new agreements that block employees from working for competitors. The bill would not, however, prevent employers from otherwise restricting the activities of their former employees in important areas. These include the solicitation of employees, independent contractors and, perhaps most importantly, customers. The proposal would also exempt non-competes that derive from business sales or other non-working relationships.

Competing bills were also filed, as were several bills regarding trade secrets.

 

Massachusetts Amends Maternity Leave Act to Cover Both Men and Women

It’s official: men are equal to women when it comes to maternity leave in the Commonwealth. Some 6-plus years after the Massachusetts Commission Against Discrimination (MCAD) announced that it would treat men as entitled to leave under a state maternity leave law that expressly provided it only to women, the legislature finally acted. It amended the Massachusetts Maternity Leave Act to apply to every employee, not just those who happen to be “female.”

The amendments to Mass. Gen. L. ch. 149, §105D were signed by outgoing Governor Deval Patrick on January 7, just before he left office; they will take effect on April 7, 2015. In addition to making the statute gender neutral, they broaden the purposes for which leave may be taken by replacing the phrase “for the purposes of giving birth or for adopting a child” with  broader language that covers both adoption placement and “placement of a child with an employee pursuant to a court order.” The statute continues to permit up to 8 weeks of leave time. It applies to employers with 6 or more workers, and leave may be with or without pay, in employer discretion.

Employers should review policies for compliance going forward. The law requires covered employers to post notices describing maternity leave rights. It permits employees to pursue legal action with the MCAD for failures to comply with its terms.