Massachusetts law recognizes that the relationship between employee and employer is an “at-will” relationship unless there is a clear expressed or implied contract. This means that this relationship can be terminated at any time by either the employer or employee with or without reason or notice. However, Massachusetts courts have recognized that it is not always clear whether or not a contractual relationship between an employee and employer exists.

One way in which an unintended implied contract may form is through an employer’s handbook or manual that is distributed to employees at the commencement and through out their tenure of employment. The Supreme Judicial Court has laid out a non-exclusive list of factors which can be used when considering if an employment manual may create an implied contract between employer and employee. Factors indicating that a manual does not create an implied contract are: “(1) the employer retained the right to modify unilaterally the manual’s terms; (2) the manual provided that it was for “guidance” as to the employer’s policies; (3) there was no negotiation between the employer and the employee regarding the terms of the manual; (4) the manual stated no term of employment; (5) the employer called no special attention to the manual; and (6) the employee did not sign or manifest his assent to the manual or acknowledge that he understood its terms.” Buttrick v. Intercity Alarms, LLC, 2009 Mass. App. Div. 97 (2009) (Citation Omitted). The Supreme Judicial Court has concluded that while these factors are helpful in determining if an implied contract is present the central question is “whether an employee would reasonably conclude that the employer was presenting the manual as a statement of the conclude that the employer was presenting the manual as a statement of the conditions under which employment could continue.” Id., citing O’Brien v. New England Te. & Yel. Co., 422 Mass. 686, 664 (1996) (internal quotations omitted).

Massachusetts courts are comfortable finding the existence of an implied contract between employee and employer based upon the terms of their employment manual. Recently, the Massachusetts Appeals Court found in favor of Jeffrey Buttrick when he sued his employer, Intercity Alarms, for firing him in violation of the disciplinary policy set forth in the employment manual provided to him. Intercity Alarms’ employment manual met many if not all of the factors discussed above; however, they placed a strong emphasis on the importance of the employment manual. Including emphasizes the need for the manual to be signed because of the non-compete agreement within the text of the manual. Based upon the requirement to sign the manual, Buttrick believed that all of the terms, not just the non-compete terms, were binding upon him. While Buttrick had not signed the most up to date version of the manual he had signed previous manuals and followed the non-compete clause for two years following his termination. For the Court, Buttrick’s actions gave credence to the fact that he believed the manual was binding. Based upon Buttrick’s belief and Intercity Alarms’ emphasis on the importance of signing the manual the Appeals Court found that it was reasonable to find that there was an implied and binding contract between Buttrick and Intercity Alarms.

Given the courts willingness to find an implied contract based upon an employment manual where an employer may not have intended for one to be present employers may be employing contracted employees without knowing it. The burden has been placed upon employers to carefully craft their employment manuals in order to avoid creating these unintentional implied contracts. It is important for employers to present employment terms and policies in a manner which will not create employment contracts with employees they intend to employ “at-will.”

Though compliance with a state’s applicable wage and hour act is mandatory for employers, some companies try to get around this duty by devising systems where employees are not actually on the clock or are supposed to be on break when actually working. [more on past lawsuits where companies strategized to avoid paying employees proper wages]. A recent Pennsylvania lawsuit against one of that nation’s largest employers proved some tactics to be extremely detrimental to the employer.
In 2006, over 186,000 current and former Wal-Mart employees originally brought a lawsuit for damages resulting from alleged missed rest and meal breaks and mandated “off the clock” work in defendant’s Pennsylvania stores. Pennsylvania’s wage payment and collection law (WPCL) can require employers who fail to pay wages, without a good faith reason to withhold payment, to pay, whichever is greater, liquidated damages of $500 or up to 25 percent of the total amount of wages due. Former employees of Wal-Mart claimed that the company made workers skip more than 33 million rest breaks from 1998 to 2001 to boost productivity and lessen labor costs. Plaintiffs complained that one of Wal-Mart’s secrets for its profitability is its implementation of a system that encourages off-the-clock work for its hourly employees.
Plaintiffs prevailed in the original 2006 class action where Judge Mark I. Bernstein originally awarded the current and former workers over $187 million. A few months ago in October 2007, the judge awarded an additional $62 million in statutory liquidated damages for over 124,000 of the plaintiffs who worked after January 1, 2002. This increased the total award to over $141.1 million in damages that Wal-Mart must pay.

On January 18, 2007 the U.S. Supreme Court added two new employment law cases to its docket. The Supreme Court only hears about 70 cases a year, and currently five of those cases will be cases involving the ADEA; a high percentage of cases to focus on one statute. The ADEA (Age Discrimination in Employment Act) was created in 1967 to afford workers over 40, protection from employment discrimination. Since its enactment, over 33 years ago, many unanswered questions still remain about the breadth of protection the statute affords older workers. Recently, however, the Supreme Court seems to be granting certiorari to an increased number of ADEA cases, due to the upsurge in related litigation. A few factors may explain the increased amount of ADEA claims; (1) baby boomers are now well into retirement age increasing the size of the protected class; (2) technological and medical advances have increased the average life span; and (3) with the economy possibly inching towards recession, many employers are reducing their workforce to cut costs, starting with older workers who tend to earn higher salaries.
Meacham v. Knolls Atomic Power Laboratory is one of the recently added employment law cases that the Supreme Court will decide this year. The case involves a federal research laboratory that dismissed 31 employees, 30 of whom were over 40. The defendants allege that they used factors like “flexibility” and “criticality” to assess employee skills when deciding whether the employee should be terminated. The ADEA provides that employers have the discretion to implement employment actions that adversely affect older workers, if the reason for doing so is reasonable. The gravamen of the Meacham case is whether the plaintiff or the defendant bears the burden of proving that the evaluation criteria used to terminate employees was, or was not, reasonable. The opinion from this case has the potential to greatly affect older worker’s rights. If the Supreme Court holds that the employee bears the burden of proving the unreasonableness of the employer’s actions, it will increase the difficulty of prevailing on an ADEA claim.
The other four ADEA cases on the Supreme Court docket are; Mendelsohn v. Spring/United Management, Fed. Express Corp. v. Holowecki Co., Kentucky Retirement Sys. V. EEOC and Gomez-Perez v. Potter. The question in Mendelsohn is whether the court may allow evidence from other employees who feel the defendant has discriminated against them because of their age, the exclusion of which could severely weaken the plaintiff’s claim. Holowecki is based on the more procedural question of whether an intake questionnaire may be used as a charge of discrimination. As employers are not allowed to use race, color, religion, sex, and origin even as factors when deciding employment actions pursuant to Title VII, the Supreme Court will decide if the same is true in regards to age in Kentucky Retirement Sys. Finally, Gomez-Perez deals with another question that forces the comparison of the ADEA with Title VII, of whether the ADEA also allows for claims of retaliation based on the employee’s involvement in an ADEA claim or complaint.
The decision of all five of these cases will create more concrete guidelines of which cases may be pursued under the ADEA and exactly which side bears the burden of proof in litigating those claims. In 2005, the Supreme Court announced in Smith v. City of Jackson that the ADEA was intended to be interpreted similarly to Title VII in allowing disparate impact claims, expanding the protection the ADEA offers. These are claims where the specific intent to discriminate need not be proven, just that a particular employment practice adversely affects those over 40. This issue was controversial due to the inclusion of the “reason other than age” defense provided for in the ADEA. The current Supreme Court has the power to cut back on the protection Smith offered older workers, though their doing so seems unlikely. Since Smith was decided, Justice O’Connor and Chief Justice Rehnquist have left the court and been replaced by Chief Justice Roberts and Justice Alito. Neither Justice O’Connor nor Justice Rehnquist joined the opinion in Smith. Therefore, even if the new judges vote in accordance with their conservative record, as long as the remaining judges adhere to their former interpretation of the ADEA, older workers may end this term with greater assurance in their protection under the ADEA.

In June, Attorney Davis gave a presentation to the North Reading Chamber of Commerce about Employment Law Hot Topics. The well attended function drew dozens of small to mid-size businesses. Attorney Davis discussed issues such as how to avoid misclassification of workers as independent contractors, how to best utilize non-compete agreements to protect a business’ trade secrets and proprietary information, an overview on sexual harassment law and training and the issue of undocumented workers. Attorney Davis then opened the floor to a general ‘question and answer’ session.

In May, Attorney Davis again participated in a forum at the New England College of Law in which he and the panelists discussed a wide variety of topics ranging from how to open and run a successful law practice to how to spot and avoid ethical issues in the practice of law. This was his 4th year participating on the panel.

In May, Attorney Davis was a panelist at the Massachusetts Continuing Legal Education (MCLE) panel on how to obtain a Probable Cause finding at the Massachusetts Commission Against Discrimination. Attorney Davis and the panelists received high praise from the audience, which was comprised of other attorneys and Human Resources personnel.

Attorney Davis was a featured panelist at the Regional Employment Law Conference for the National Employment Lawyers Association. Attorney Davis spoke on the issue of “How to Run a Successful Employment Law Practice.” The conference enjoyed a great turnout with attorneys from all over New England.