Huge MCAD Award Sends Another Message to Employers on Workplace Bias

Employers who have yet to realize the dangers of even subtle discrimination in the workforce should take note of a recent MCAD decision that awarded huge damages to a gender discrimination victim. Late last month, the Commission awarded her more than $540,000 in back pay, another $650,000 for front pay, about $80,000 in lost benefits, $300,000 in emotional distress damages, plus the 12% interest and legal fees that accompany all MCAD damages awards.

The size of the judgment is not the only thing worth noting. The former employee, Janice Switzer, appears to have presented little direct evidence that she was let go because she is female. Instead, she submitted circumstantial data and attacks on the business practices and measuring tools of her former employer, Office Max. The Commission rejected the employer’s claim that Ms. Switzer was chosen for layoff over her male counterparts because her quota attainment was lower than theirs. While that fact was established, quota setting mechanics were questioned. Other job performance criteria that favored Ms. Switzer were ignored because, the Commission wrote, the quota excuse “served as a neat and convenient justification for termination of Complainant’s employment.” Among the factors ignored were the female employee’s superior business development and customer retention. The MCAD also cited Office Max’s practices of excluding Ms. Switzer from golf outings, luncheons, and other networking events that men attended, then criticizing her because no one knew who she was.

Whether the decision in Switzer v. Office Max is a harbinger of things to come at the MCAD remains to be seen. What is clear is that, even if rare in terms of size, the case should warn employers that they not only must avoid overt workplace discrimination but seek out and eliminate subtle biases that may permeate society as a whole. Doing so will not be easy, particularly for larger companies with established workforce structures that have traditionally been dominated by men. Still, the process should be seen as worthwhile. Office Max, after all, not only suffered a cash loss that could approach $3 million in damages, interest and the legal fees incurred by both parties, it almost certianly damaged its reputation and undermined its own workforce. It fired a superior employee because, the MCAD concluded, she is a woman, thereby, perhaps, sacrificing its own profits in the name of an old boys network whose perpetuation likely does not serve its business interests on a number of levels.

New Hampshire Law on Non-Competes a Warning for Massachusetts Employers

While not directly relevant to employers who confine their business activities within Massachusetts, a New Hampshire law that took effect in July sends a warning on the effective use of non-competition agreements. Under the statute, New Hampshire employers will be barred from enforcing non-competition agreements that are not provided to their new hires at or prior to the time that a job offer is made. While Massachusetts now has no formal requirement like this one, the law as interpreted by many state court judges effectively requires the same thing. 

In Massachusetts, employers seeking to enforce non-competition agreements bear a substantial burden in court. Among the requirements is proving that their contracts are valid. This requires a showing that the employee at issue was given something in exchange for his/her agreement not to compete. Since continued employment is generally not of sufficient value to support a contract, employers are effectively if not statutorily required to present non-compete agreements to their new hires before they start work. Failure to do so can invalidate an otherwise effective contract and render employers vulnerable to unfair competition from their former workers. [Read more...]

Massachusetts Enacts New Law to Protect Temporary Workers

Massachusetts’ latest employee rights law was signed by Governor Deval Patrick on August 6, 2012. The law, which was promoted by the Massachusetts Bar Association’s Workplace Safety Task Force, imposes formal requirements on staffing agencies to disclose information to the temporary workers they place on job sites. Its purpose, according the the MBA, is to protect vulnerable, low-wage workers from exploitation that can arise through failures to provide basic wage and other information to temporary workers. 

The new law is captioned as “An Act extablishing a temporary workers right to know.” It requires that staffing agencies provide to each employee placed on a new assignment notice of the name, address and phone number of staffing agency contacts; workers’ compensation insurance carrier  information; a job description, pay rate, and date of expected pay; and details regarding transportation to the worksite, among other things. The information must be provided prior to the end of a worker’s first pay period, and othe restrictions on staffing agency conduct apply. The new law does not apply to professional workers, secretaries or administrative assistants. Violators can be punished by substantial fines and may be subject to criminal prosecution.

Protecting Assets Against the Competition

Starting a successful business isn’t easy. It may require financial risk, long hours at the office, and maybe a bit of luck. The last thing a small business owner needs is to be damaged by the disclosure of its trade secrets to the competition.

Protecting the information that helps make a business successful, then, should be a central part of every business plan. Employees, after all, become former employees, sometimes with an aim of starting a competing enterprise. Through this route, by accidental disclosures, or as the result of careless use of secrets, key inside information can be revealed. The damage such disclosure can cause to profitability can be substantial. At times, it may even threaten a company’s survival.

Preventing a crisis like that requires careful planning. By first identifying critical inside trade information, then taking steps to control its dissemination, small companies can minimize their exposure in this area. The process should include several steps. [Read more...]

Superior Court Judge Holds LLC Managers Can be Liable under Wage Act

Refusing to follow the lead of a fellow jurist, a Suffolk Superior Court judge ruled in June that managers of Massachusetts limited liability companies cannot escape personal liability under the state’s Wage Act by virtue of the corporate structure through which they may work. While agreeing that the Act’s presumption making corporate presidents liable as employers does not apply to LLC managers, the judge nonetheless refused to dismiss an individual liability suit for failure to pay wages to an employee. The Act, the court concluded, imposes liability on any “person” who violates it, and LLC managers can thereby be liable parties if they qualify as as employers who fail to pay wages due.  [Read more...]

Lawmakers Consider Imposing New Sick Leave Requirements on Massachusetts Employers

Via a bill that is supported by Governor Deval Patrick and was recently reported favorably by a legislative committee, Massachusetts lawmakers are deciding whether to require employers to offer sick leave benefits to their workers. While most employers voluntarily permit workers to be out sick for reasonable periods, the benefit is not mandatory and employees can be fired for using it. The so-called Act Establishing Earned Paid Sick Time would set a new sick leave floor and, as the name suggests, require that most employees be paid during their absences. It would grant job protection to workers and expand the benefits they already must receive under Massachusetts law. [Read more...]

Arbitration Clauses Can Shorten Filing Deadlines, Alter Procedural Rules

Employers may have a new weapon to help them combat discrimination suits by disgruntled employees — craftily drafted arbitration clauses. That view will certainly carry the day if a recent superior court decision stands up on review. In a case that once again challenged the enforceability of an arbitration clause in the employment context, the court found that, despite a drastic reduction in the time frame for filing a discrimination suit under Massachusetts General Laws chapter 151B along with unliateral controls of procedural terms by the employer, the clause was enforceable. [Read more...]

Massachusetts to Grant Work Leave Rights to Domestic Violence Victims?

By an overwhelming vote of 34-0, the Massachusetts State Senate voted on January 12 to grant victims of domestic violence up to 15 days of annual leave. The bill is not yet law as it must be approved by the state’s house of representatives and then signed by Governor Deval Patrick. Given the lack of dissent in the Senate, however – one brave Senator did vote “present” in apparent protest, a move that suggests opposition in the House will be hard to come by — the law seems likely to be enacted sometime soon. [Read more...]

Legislature Holds Hearing on Bills that would Rewrite Independent Contractor Law

A committee of the Massachusetts state legislature held a hearing on November 3, 2011 to take input on 4 pending bills that aim to revise the state’s independent contractor statute. The law has been under fire from some circles due to language that, read literally, essentially bans the use of contractors in Massachusetts. It’s not the first time opposition forces have pressed for rewriting of the law. A similar effort last year was unsuccessful.

The independent contractor law appears at Mass. Gen. L. ch. 149, s. 148B. It requires that all workers be classified as employees unless the employer demonstrates that 1.  the worker is free from control in the performance of daily duties; 2. the work performed is outside the usual course of the employer’s business; and 3. the worker is customarily engaged in an independent business. Its rewriting to this form in 2004 effectively banned the legal use of contractors, since almost no employer can meet the second prong of this three-part test and many cannot meet the other two. [Read more...]

Wage Act’s Triple Damages Provision is Not Retroactive

Massachusetts’ highest court has ruled that the 2008 amendment to the state’s Wage Act is not retroactive. As a result, claims involving work that straddles the July 2008 effective date of the rewritten law will be governed by two different standards. For damages related to work that occurred prior to July 2008, a plaintiff employee will be required to persuade the court to double or triple the sum awarded. Any damages for work performed after July 12, 2008 will be automatically tripled by law.

The Wage Act amendment came in response to a 2005 SJC decision that held the award of triple damages under the Act was discretionary, not mandatory as was previously believed by most employment lawyers. Indeed, several lower courts interpreted the old version of the Act to require an award of triple damages. After the SJC concluded otherwise, the Massachusetts state legislature amended Mass. Gen. L. ch. 149, s. 150 to clarify its language and require triple damage awards. The law also requires the award of legal fees to a prevailing employee.