Massachusetts Employment Law Blog

Curbside Check-In Fees At Airport Service Fees Are Wages For Skycaps

jdavis — Wed, 13 Jan 2010 15:56:53 +0000

In an effort by airlines to increase revenue, they began charging customers fees for checking their baggage in curbside. These fees have led to a decrease in the tips that “skycaps” used to receive from airline passengers checking in their bags curbside. In DiFiore v. American Airlines Inc., 454 Mass. 486 (2009), a group of “skycaps” who worked for American Airlines and a group who worked for an agency hired by American Airlines to perform curbside check in at Logan Airport filed suit as a violation of the Massachusetts Wage & Hour act, M. G. L. c. 149 § 152, alleging that the instituted fees which were collected by American Airlines and G2 belonged to them.

American Airlines argued that since they were not the “employer” of the “skycaps” hired by G2 they did not owe fees to those “skycaps.” This was because in the Massachusetts Wage & Hour act the term “employer” is used indicating that service fees charged by someone other than the employer did not have to be given to the employees performing the service. This led the Supreme Judicial Court to determine what is meant by a “service charge” in the text of the statute. In August 2009, the SJC determined that while the statute does include the term “employer” that the legislature did not intend to allow employers, such as American Airlines, to contract with an outside agency and gain the power to keep service fees earned by service employees. Rather, the SJC found that the purpose of the statute is to ensure that service employees were given the service fees charged for their services and allowing a company to hire an outside agency to hire service employees would nullify the central purpose of the protection given to service employees in the first place.

Subsequent to the SJC’s ruling both parties filed motions in U.S. District Court which they ruled on December 23, 2009. American Airlines filed a motion for relief from judgment arguing that Massachusetts Tips Law is preempted by the Airline Deregulation Act of 1978. The Court ruled that the motion for relief from judgment must be denied because the Airline Deregulation Act does not preempt Massachusetts Tip Law. The Plaintiff’s filed a motion to amend the judgment arguing that (1) they should receive treble damages under the amended M. G. L. c. 149 § 150 (2) that all of the collected fees were not included in the original judgment. The Court found that since the legislature did not expressly state that the amendment should be applied retroactively treble damages are discretionary and are not to be applied in this case. However, the Plaintiff’s were able to obtain additional feed collected between March 1, 2008 and April 7, 2008.

Employment Manuals Can Be Binding

jdavis — Tue, 12 Jan 2010 15:10:16 +0000

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.”

Non-Compete Agreement Signed in Massachusetts is Enforceable Against Employee who Jumped Ship to California Company

jdavis — Wed, 28 Oct 2009 15:16:17 +0000

The Business Litigation Division of the Superior Court had an interesting quandary to consider in early 2009. When an employee of a Massachusetts company who has signed a non-compete agreement leaves the company for a competitor in California is the non-compete enforceable? In EMC Corp. v. Donatelli, this is the precise question that had to be answered by the court when Donatelli left EMC Corp. for Hewlett-Packard, a direct competitor in California. In this specific case there is particular interest on the part of employers because unlike Massachusetts, where the contract was signed, California traditionally does not enforce non-compete agreements. The Superior Court had to decide if it would issue an injunction against Donatelli to prevent his employment with EMC’s competitor when California courts may not enforce the injunction. Ultimately the Superior Court issued the injunction stating Massachusetts strong interest in protecting the relationship between its employers and employees. If the court would not issue the injunction then the door is left open for Massachusetts residents to sign non-compete agreements with Massachusetts employers to negate the enforceability by moving to a state where non-compete agreements are unenforceable. Subsequent to the injunction being issued Donatelli was able to provide proof to the Superior Court that he was able to take an alternate position at Hewlett-Packard that did not directly compete with his position at EMC. The court altered their original injunction to allow Donatelli to take the alternate position but barring him from taking the position he initially wanted.

Both EMC and Donatelli could view the Superior Courts decision in this case as victorious. For EMC and other employers it establishes that Massachusetts Superior Courts will enforce non-compete agreements to the furthest extent of Massachusetts law. Meanwhile, Donatelli is able to take a position at Hewlett-Packard, albeit, not the one he left the company for. There are few lingering legal issues which will need to be sorted out in the future. Will the higher courts of Massachusetts follow the analysis and rule put forth by the Superior Court to reinforce the ruling? The biggest loose end is whether or not the California court will enforce the injunction. To do so, in a California choice of law analysis Massachusetts contract law would have to be followed.

Supreme Judicial Court Affirms Front Pay and Punitive Damages Against Wal-Mart in Employment Discrimination Case

jdavis — Wed, 28 Oct 2009 15:13:55 +0000

When a jury found that Wal-Mart terminated Cynthia Haddad from her job as a pharmacist for discriminatory purposes a jury awarded her two types of damages, front pay and punitive damages, both of which were affirmed by the Supreme Judicial Court (“SJC”). Haddad v. Wal-Mart Stores, Inc. The trial judge threw out the awarded punitive damages utterly confusing the SJC. The SJC granted direct review to both Haddad’s appeal of removing the award of punitive damages and Wal-Mart’s appeal of the front pay damages. The SJC has re-instated the punitive damages awarded by the jury and affirmed the front-pay awarded.

Front Pay Damages

Wal-Mart challenged the jury’s award of 19 years of front pay calling it excessive. When an individual is unlawfully terminated from a position for discriminatory purposes the defendant company may be liable for front pay damages. Front pay is intended to compensate a plaintiff for their future financial injury caused by the defendant employer’s intentional discriminatory actions. While a plaintiff retains a duty to mitigate front pay damages, for instance finding another job, an employer can be held liable for lost earnings and benefits that are no longer available to the plaintiff due to the employer’s unlawful discrimination in the form of front pay. The Haddad court discussed five established factors for the judge or jury to consider when determining the appropriate amount of front pay without overcompensating the injured employee: “(1) the amount of earnings, including salary and benefits, that the plaintiff would have received between the time of trial and the plaintiff’s projected retirement date; (2) the plaintiff’s probable retirement date; (3) the amount of earnings that the plaintiff would probably have received from another employer until her retirement, which would reduce any front pay award; (4) the availability of other employment opportunities; and (5) the possibility of future wage increases and inflation.” Id. While the court has seemingly laid out a simplistic step by step analysis for a jury to consider, a concrete formula has not been established to be presented to juries. While the court clearly states that actions taken by the plaintiff to mitigate their damages must be considered subsequent to determining front pay using the five factors they do not explain how the jury’s calculation of front pay should be discounted. Without providing a clearly defined formula for neither the five factor analysis nor the discount the court leaves open the possibility of inaccurate and miscalculated front pay calculations made by juries.

Punitive Damages

After punitive damages were awarded at trial Wal-Mart filed a motion, which was granted, to have the award vacated on two grounds: the award was excessive and their actions were neither egregious nor outrageous as required by statute for punitive damages to be awarded. While a long line of case law establishes that behavior must be egregious or outrageous for punitive damages to be warranted the SJC had not yet clearly defined egregious or outrageous. Especially, not when being awarded for a violation of Massachusetts employment discrimination statute, M. G. L. c. 151B. In Haddad, the SJC set clear parameters for how a judge shall instruct a jury when presented with an employment discrimination case where punitive damages may be awarded. First and foremost the employer must have engaged in behavior beyond intentional discrimination. If based upon the evidence a jury could reasonably find that the employer’s behavior went beyond intentional discrimination judge shall tailor the jury instructions to one or more of the following factors: (1) whether a conscious effort was made to diminish the plaintiff because of their class or the class the plaintiff belongs to, (2) whether the defendant disregarded possible harm cause by their behavior, (3) the actual harm to the plaintiff, (4) the defendant’s actions subsequent to learning about possible harm, and (5) the duration of and/or concealment of the defendant’s behavior. By setting forth these factors the SJC has filled a void in the law by establishing a new standard which defines outrageous or egregious behavior in employment discrimination cases. This allows parties to properly assess when it is appropriate for punitive damages to be both considered and awarded in discrimination cases.

Expansive Ruling on Discrimination Laws to Impact Small Businesses

jdavis — Wed, 21 Oct 2009 02:41:24 +0000

Until recently it was believed that Chapter 151B of Massachusetts General Laws was the exclusive remedy for workplace discrimination lawsuits. However, Chapter 151B does not cover small employers; those with fewer than 6 employees. In Thurdin v. SEI Boston, LLC., 452 Mass. 436 (2008), the SJC has ruled that businesses that do not employ enough individuals to fall under the Massachusetts Employment Discrimination act may bring discrimination claims under the Massachusetts Equal Rights Act (“MERA”).
Tracy Thurdin was hired as an onsite information technology consultant in February 2005. A few weeks after being hired Ms. Thurdin informed her employer that she was pregnant and due in June 2005. Her employer was incredulous at Ms. Thurdin’s failure to report her pregnancy during hiring saying her lack of notice was unethical. Immediately the company began to suggest that Ms. Thurdin take an unpaid leave of absence due to the costs she would inflict on the company. SEI Boston took it upon themselves to bench Ms. Thurdin and not send her to clients, even though, Ms. Thurdin informed them of her ability to continue her normal work duties. In addition, SEI Boston was concerned about the cost maternity leave would cause the new and upcoming company. On April 22, 2008 SEI Boston placed Ms. Thurdin on unpaid administrative leave because of her pregnancy. Ms. Thurdin never returned to her employment with SEI Boston.
Ms. Thurdin attempted to pursue administrative remedies with the Equal Opportunity Employment Commission (“EEOC”) and Massachusetts Commission Against Discrimination (“MCAD”) only to be turned away because SEI Boston claimed to only have 3 employees; fewer than the 6 required by c. 151B. Ms. Thurdin then filed a claim with the Superior Court in March 2006 where it was found that c. 151B was the sole remedy for employment discrimination cases. Also, in the alternative the phrase “make and enforce contracts” in MERA indicating that the legislative intent was for it to apply only to discrimination in the hiring process leaving Ms. Thurdin no remedy. Although, it appears that SEI Boston indicated that if Ms. Thurdin did reveal her pregnancy she would not have been hired and thus discriminated against during the hiring process.
Ms. Thurdin appeals and the SJC transferred the appeal to their own docket. The SJC found that the legislature intended c. 151B to be the exclusive remedy, as prior case law has determined, only where the statute permits the plaintiff to assert a remedy. Where a plaintiff falls outside the scope setforth in c. 151B they are free to pursue any other available remedy.
The Thurdin decision has the ability to have a large impact on both small and large employers. First, employers who were outside the purview of c. 151B can now expect discrimination claims to be brought under MERA now that a new avenue has been opened. In addition, MERA does not have the limitations of c. 151 to employers. MERA is open to “all persons within the commonwealth,” therefore, an avenue has been opened for non-employees who have been discriminated against by a company’s business practices to assert claims as well.

Wal-Mart Hit Hard in Attempted Evasion of Fair Pay to Employees

jdavis — Thu, 24 Jan 2008 18:33:02 +0000

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.

Recent Awards of Summary Judgments in Discrimination Cases

jdavis — Fri, 11 Jan 2008 16:22:03 +0000

Summary judgment may be appropriate, though rare, in cases of employment discrimination where the plaintiff fails to show a genuine factual issue with regard to the employer’s discriminatory motive or intent with regards to an employment action. Plaintiff has the initial burden of presenting their prima facie case by showing to a preponderance of the evidence that without further explanation by the employer, the adverse employment action against them was due to their protected class. The employer is then afforded the opportunity to present another reason for their employment action. This reason need not be wise nor practical, just nondiscriminatory. The plaintiff may defeat a motion for summary judgment either by discrediting the employer’s proffered reasons as being pretextual or by presenting evidence that the motivating reason for the employment action was more likely than not discriminatory. If the evidence is in balance, however, there is no genuine issue of material fact and the employer may prevail on summary judgment.
The following recent opinions reflect an inclination to uphold summary judgments for the defendant in discrimination cases. The court recognized recently in Brooks v. Peabody & Arnold, LLP, that while summary judgment is a disfavored remedy in the context of discrimination cases based on disparate treatment, such does not preclude the remedy from ever being appropriate. The court rejected the plaintiff’s argument that she was fired due to her status as a disabled person. The plaintiff contended that her disability, rather than the warnings she had recently received at work or the company’s suspicions of fraud, was the reason for her termination. The court held that the plaintiff failed to present sufficient evidence of the defendant’s discriminatory intent to rebut the defendant’s showing that, through their use of a private investigator, they believed the plaintiff to be misrepresenting herself as disabled. The defendant was held to have discharged the plaintiff for lying about her disability, rather than for her disability, therefore withstanding the motion for summary judgment.
Generally, evidence of direct touching in a sexual harassment claim is enough to at least survive summary judgment, if not sufficient to allow the plaintiff to prevail on their claim. “[A] single act of harassment may, if egregious enough, [may] suffice to evince a hostile work environment.” Noviello v. City of Boston, 398 F.3d 76, 84 (Mass. 2005). In Rivera-Martinez v. Comm. Of Puerto Rico, et al., however, the court awarded summary judgment to the employer where the plaintiff complained that her employer sexually touched her forearm and a little over a year later, touched her back, torso and brassiere area. The court held that there was no indication that the employer’s touching, while inappropriate, was sexual in nature. Further, the court held that the plaintiff failed to show that the harassment was severe and pervasive or that it was reserved just for women.

The Supreme Court Grants Certiorari to the Fifth ADEA Case this Term

jdavis — Tue, 01 Jan 2008 20:34:34 +0000

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.

Public Speaking Engagements

jdavis — Sat, 02 Jun 2007 19:17:51 +0000

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.

Jilted Workers’: Remedies Contingent Upon Employment Classification

admin — Thu, 31 May 2007 19:55:56 +0000

If any a company fails to pay an employee, then the employer, pursuant to the Massachusetts Wage & Hour Act (Chapter 149, §§ 148 and 150), may have to pay treble (triple) damages to the employee, plus litigation costs, interest and reasonable attorney’s fees. (more…)