Archives for March 2016

Wage Act may not Require Pay for All Hours of Work

In a recent decision that some plaintiff-side employment lawyers found surprising and perhaps troubling, a judge of the superior court held that an employer does not need to pay for all hours that its employees work. The employer did not violate the Massachusetts Wage Act, Justice Robert Gordon found on February 5, because it honored agreements it entered with its workers and did not transgress minimum wage or overtime laws. He wrote,

“[A]n employer and employee who agree at the outset of their contract that the employee will be paid at an hourly rate for selected tasks, but not for all work, are plainly not violating the Wage Act when the employee is paid in accordance with this agreed understanding. To the contrary, an employer who pays an employee as he has agreed to be compensated—provided (as here) that it complies with all applicable minimum wage and overtime laws—has fulfilled the core aspiration of this statute.”

The facts of the case are important. The plaintiff sought to represent a class of auto mechanics who work on a rate pay basis — that is, they are paid specific hours at agreed rates for work they perform on automobiles. While this arrangement resulted in wages in excess of minimum requirements, it also caused the mechanics to necessarily perform daily task for which they were not paid, such as filing paperwork and cleaning their work stations. They also received no pay for down time despite being required to be present for certain hours each day. Because the employer and employee agreed to this arrangement and did not violate other laws, the court found that it did not violate the Wage Act.

The decision may be an important one for employers who do not pay their workers on either hourly or salary bases, such as those that pay only sales commissions or base employee pay on deliveries of good or services. It addresses a previously open question for those employers that is likely to be revisited by appellate courts in the future. The case is Salerno v. Baystate Ford and is pending in Middlesex Superior Court.

 

State Legislators to Renew Effort to Enact a Noncompetition Law

Though they’ve failed in several tries to reach a compromise on legislation to regulate the use of noncompetition agreements, the Massachusetts legislature is poised to try again. This time, House Speaker  Robert DeLeo seems willing to lead an effort that will include several specific components.

Mr. DeLeo said as much on March 2, according to Massachusetts Lawyers Weekly, when speaking with local business people. He reportedly highlighted three major components that might be part of 2016 noncompetition legislation:

  1. A limit on restrictive covenants to a maximum of 12 months after employment ends;
  2. A requirement that employees get advance notice of noncompetition agreement requirements before they accept a new job; and
  3. A restriction against using non-competes for workers in low wage jobs.

Time will tell whether these ideas or others can become reality in Massachusetts. The notion of noncompetition legislation has been around for some time but has never gained traction in the legislature. Prior to his departure as governor, Deval Patrick made several pushes to enact a bill with varying terms. Because no law on the topic exists, judges are left to decide on a case-by-case basis when restrictions on work are enforceable and to what extent they are valid. That approach commonly leads to expensive litigation as employers fight with their former employees about what they can and cannot do at their new jobs and, sometimes, whether they can work at them at all.