In the recent case of Fitzgerald v. The Chateau Restaurant Corp., No. 14-01990-J, 2016 WL 344155 (Mass. Sup. Ct. Jan. 4, 2016), a former manager at The Chateau Burlington and The Chateau Andover restaurants filed a putative class action against parent company The Chateau Restaurant Corporation, Inc. and several related corporations which owned individual Chateau restaurants in the Massachusetts Italian restaurant chain. In his complaint, the Plaintiff alleged that he was routinely denied the opportunity to take his off-site meal break--because of a company policy that if only one manager was on site, that manager could not leave the restaurant--yet he still had his pay automatically deducted to account for such a thirty-minute meal break. Id. at *1-2. Fitzgerald filed a putative class action on behalf of himself and other similarly situated hourly managers at any Chateau restaurant location during the six-year period preceding the commencement of the action, alleging violation of the Massachusetts Wage Act, violation of the Massachusetts Overtime Act, breach of contract and unjust enrichment. Id.
A recent Appeals Court decision should serve as a warning to employers about the importance of clarity in communications with employees concerning policies on overtime pay and timekeeping.
The Supreme Judicial Court has recently affirmed in Monell v. Boston Pads, LLC, 471 Mass. 566 (2015) that real estate brokerage companies can continue to classify real estate salespersons as independent contractors and are not subject to the Massachusetts independent contractor statute.
Even a seemingly objective performance evaluation process may not insulate an employer from claims by an employee that their termination was discriminatory. In a 2013 unpublished decision, Rochat v. L.E.K. Consulting, LLC, 83 Mass. App. Ct. 1108 (2013), the Appeals Court reviewed a Superior Court decision to dismiss gender discrimination claims made by a terminated employee against her former employer. The terminated employee, a second-year consultant with a previously promising career with the firm, earned a negative performance review from the supervisor of a project she worked on toward the end of her second year. That review led, ultimately, to the termination of her employment. Until the last few months of her employment, the employee had generally positive reviews every six months during her tenure with the company and consistently received praise for her work ethic and enthusiastic attitude. She claimed that the decision to terminate her was the product of gender bias.
Evaluating the enforceability of a non-compete agreement under Massachusetts law involves an inherent degree of uncertainty. This is because courts use subjective standards to determine whether to enforce a non-compete agreement based on whether it is: (1) reasonable in scope, length of time, and geographic area; (2) protective of a legitimate interest of the employer; and (3) supported by adequate consideration. Thus, enforceability depends on the facts of a particular case. Employers can increase the likelihood that a non-compete agreement will be enforced as written by tailoring non-compete agreements based on the guidance of past court decisions. To that end, non-compete agreements should be limited to a duration of no more than 1-2 years. The geographic scope of a non-compete agreement should be limited to the area actually served by the employer or where the employer has specific plans to expand. Non-compete agreements should also be presented to employees before hiring. If the employee is already employed, employers should include some form of additional consideration, such as a raise or one time payment, for added certainty that a non-compete agreement will be enforced as written.
In August 2014, An Act Relative to Domestic Violence was signed into law and became effective immediately. Section 10 of the Act, codified at G.L. c. 149, §52E, created new protections for an employee who is, or whose covered family member is, a victim of abusive behavior. Abusive behavior includes domestic violence, sexual assault, stalking, and kidnapping. Under the new law, employers with 50 or more employees must provide employees up to 15 days of unpaid leave in any 12-month period if the employee or covered family member of the employee is a victim of abusive behavior.
Hiring qualified employees that are the right fit for a company is one of the hardest and most important jobs for employers. A bad hire is not only a waste of time and money, but also causes morale problems and the risk of a wrongful termination claim if the employee is terminated. Because it is impossible to have a perfect hiring record--particularly when a company is growing quickly and is hiring many new employees--employers often ask whether it makes sense to have a probationary period for new hires.
There are many anti-discrimination statutes aimed at protecting employees, such as the Americans with Disabilities Act, the Age Discrimination in Employment Act, and Title VII of the Civil Rights Act of 1964 under federal law and the anti-discrimination provisions of Chapter 151B of the Massachusetts General Laws to name a few. While understanding the nuances and the interplay between federal and state laws can pose challenges, the intention behind these laws is something that all well-meaning employers support. Nevertheless, situations can arise when even the most well-meaning employer may find compliance with the law and the behavior required to avoid a lawsuit both counterintuitive and difficult. One particularly dangerous area for employers can be found in the anti-retaliation language contained in many employment discrimination statutes. This is because employers too often react negatively to the assertion of a claim and consequently turn a weak discrimination case into a strong retaliation claim.
In November 2014, Massachusetts voters approved a ballot question that requires all private sector employers to provide employees with up to 40 hours of sick leave per calendar year. Under the new law, which goes into effect July 1, 2015, employers of 11 or more employees must provide paid sick leave for employees. Employers having less than 11 employees must provide unpaid sick leave for employees. This law applies to full-time, part-time and temporary employees performing work for compensation.
Massachusetts employers must be aware of several potentially relevant laws when an employee requests leave or a reduced schedule as a result of complications from pregnancy. Employers with at least six employees are covered by the Massachusetts Maternity Leave Act ("MMLA"). The MMLA entitles female employees that have completed an initial probationary period to up to 8 weeks of leave for the purpose of giving birth or adopting a child. The leave is either paid or unpaid at the discretion of the employer, but it is only available once the child has been born.
The First Circuit Court of Appeals issued a decision last week allowing a retaliation lawsuit to proceed because the company's CEO told others that he wanted to "get rid of" an employee, even though there was no evidence that the CEO made those statements directly to the supervisor who terminated the employee, or that the CEO was in any way involved in the termination decision.
A recent Superior Court decision warns employers of the pitfalls that result from using non-compete agreements that contain inconsistent terms. In ARS Services, Inc. v. Morse, 2013 WL 2152181 (Super.Ct. 2013), Judge Edward P. Leibensperger considered whether to issue a preliminary injunction to a company that sought to enforce a non-compete agreement against a former employee who began competing directly against it in its existing market.
It is well recognized that the shareholders of a Massachusetts close corporation are fiduciaries of each other. As a rule, this is true for majority shareholders, but the law may be much more nuanced regarding the duties of minority shareholders. A close reading of the Supreme Judicial Court's decision in the leading case Donahue v Rodd Electrotype, as well as the reasoning behind the commonly understood rule, suggests a minority shareholder's obligation to the majority is limited and depends on their ability to control or influence the close corporation and not simply their status as shareholders. Moll, D., Of Donahue and Fiduciary Duty: Much Ado About . . . ?, 33 Western New England L. Rev. 471, 478 (2011); See also, Blaiklock, A., Fiduciary Duty Owed By Frozen-Out Minority, 30 Ind. L. Rev. 763, 774 (1997).