In an effort to keep our readers up to date with recent legal developments and trends, we summarize below what is new in the law (both in legislation and in business) and provide a “disclaimer” about what to what to expect in the coming months. We hope this will be useful to you.
What’s new
Motion to Force Arbitration Denied for Violation of Personal Records Act
Disputes regarding the enforceability of arbitration agreements have led to many hotly contested legal battles covering a wide range of legal theories, e.g., waiver, lack of consideration, unconscionability, violation of public order , etc In a recent victory for employees, an employer’s lax response to a statutory request for a personnel file led to a waiver finding by the employer and the denial of a motion to compel arbitration.
Under the Massachusetts personnel records law, MGL v. 149, § 52C, an employee must receive a copy of his personnel file within 5 working days of a written request. In Hernandez vs. Universal Protection Service, LLC, No. 2181cv00335 (Middlesex Super. Ct. Aug. 23, 2021) (Frison, J.), the employer failed to provide the employee with a copy of the arbitration agreement in response to her personnel record request. Further, the employer has not disclosed its intention to seek enforcement of the arbitration agreement at any time until the matter is brought to court. In the circumstances, the court found that the employer’s failure to disclose the arbitration agreement constituted a waiver of the employer’s rights under it, and the employer’s motion to compel the arbitration was dismissed.
And speaking of the Personnel Records Act…
Massachusetts’ highest court, the Supreme Judicial Court (“SJC”), recently ruled in Meehan v Medical Information Technology, Inc.177 NE3d 917 (Mass. 2021), that an employee who has been terminated for exercising his statutory rights under the Personnel Records Act to file a written rebuttal may, indeed, pursue legal action for termination abusive in violation of public order, reversing the dismissal of the plaintiff’s claim by the lower courts.
In the context of an at-will employment relationship, the basis for a claim of “wrongful dismissal” is often misunderstood. In short, there is no widespread claim for wrongful dismissal. The source of legal rights and protections for an employee at will may be rooted in statute (for example, our state and federal anti-discrimination statutes, wage payment, and whistleblower laws) or under common law. (for example, in violation of the commitment of good faith and loyalty or public order).
Massachusetts courts have long recognized a common law exception to the at-will doctrine that allows employees to seek relief for asserting a right guaranteed by law, refusing to do what the law prohibits, doing what the law requires and other important public acts. While the SJC fits in Meehan is important from a broader public policy perspective, clarifying that an employer cannot simply fire an employee for exercising a legal right, and that the public policy exemption extends to the exercise of rights under the Personnel File Act, it is worth noting the unusual procedural position of this case.
In Meehan, at least for the purposes of the defendant’s motion to dismiss, there was no dispute as to the reason for the dismissal decision (i.e. the act of submitting a written rebuttal to a performance evaluation ), and the content of the written rebuttal was not in issue. It’s atypical. It is far more common for the grounds for termination and the content and substance of the rebuttal to be central issues in litigation.
As a result, however satisfying a win may be for employees, to enjoy it, employees must proceed with caution and strategy.
Reprisal investigations: when the accuser becomes the accused
As we’ve discussed in our newsletters before, what constitutes “adverse employment action” in discrimination and retaliation cases is not limited to quiet acts causing immediate economic harm, such as dismissal or demotion. Instead, protections against unlawful discrimination also encompass employment actions that adversely affect “the terms, conditions, and privileges of employment.” Yee c. Mass. state police, 481 Mass. 290, 295 (2019); see also The High Court reinforces discrimination is more than a question of money.
In the context of retaliation cases, the U.S. Supreme Court has made it clear that an adverse act can include any conduct that “might well deter a reasonable worker from” engaging in the protected activity, such as filing a a complaint of discrimination. See Burlington North and Santa Fe Ry. Co. c. White548 US 53, 57 (2006).
Unfortunately, as a recent case from the US District Court in Massachusetts illustrates, Stuart v. City of Gloucester, 2021 WL 4477476 (D. Mass, September 30, 2021), employees who bring internal complaints in good faith may sometimes be subject to retaliatory investigations. While the plaintiff in Stuart ultimately failed on several of its lawsuits, the Court readily acknowledged that an internal investigation initiated in the wake of the plaintiff’s protected activity (here the exercise of his First Amendment rights) may constitute an adverse action in employment matters, noting that an “investigation of the plaintiff’s conduct may also be considered an adverse employment action, as even the threat of an investigation by his or her employer could dissuade an ordinary employee from filing a complaint or otherwise exercise its [legal] rights.”
Investigating whistleblowers and those who file complaints is an increasingly common page in the executive lawyers’ playbook, and navigating such investigations is treacherous – having the advantage of an experienced lawyer to help could be essential.
Joint Analysis of Employers under Massachusetts Wage and Hour Laws
Under Massachusetts wage and hour laws, employers are subject to strict liability and strong remedies are available to employees who have been wrongly classified as independent contractors or otherwise denied wages, including damages. -compulsory interest and attorney’s fees. For successful employees, having a “million dollar” judgment on hand for wages owed is little comfort when the company is bankrupt and/or there is no otherwise viable collection route. . Therefore, a strategic question, particularly in situations where the solvency of the employer is a concern, is whether several entities can be held liable as an “employer” in a joint analysis of the employer.
In Jinks v Credico (USA) LLC, 177 NE3d 509 (Mass. 2021), the SJC recently addressed the proper standard for determining joint employer status under Massachusetts wage and hour laws. In short, the SJC has adopted the “totality of the circumstances” standard used under federal wage and hour law, guided by a helpful framework of four factors. These factors include whether the alleged employer (1) had the authority to hire and fire the employee; (2) supervised and controlled working hours or conditions of employment of employees; (3) determined the rate and mode of payment; and (4) maintained employment records.
Remember, however, that the CJS has cautioned that these four factors are not “carved in stone and will not be applied blindly,” and that no one factor is determinative.
What’s coming
The Timing and Scope of Mandatory Triple Damages Awards Under Massachusetts Wage Law
The Massachusetts Wages Act, GL c. 149, § 148, requires prompt and full payment of all wages earned. Employees deprived of timely payment of these wages are entitled to triple mandatory compensation, plus attorney’s fees. Identifier.§ 150. Currently pending before the SJC, two cases will further clarify the timing and scope of damages awarded under the Wages Act.
Reuters c. City of MethuenSJC-13121
In Reutersthe CJS will decide whether—when wages are paid late but before employee takes legal action – an employee is entitled to triple the total amount of late paid wages or is limited to recover three times accrued interest from the late payment.
Devaney vs. Zucchini GoldSJC-13176
Massachusetts wage law and the federal Fair Labor Standards Act (“FLSA”) are similar but not identical, for example, the FLSA does not provide for mandatory tripling of damages. The question for the SJC in Devaney is whether, where an employer violates the FLSA but not the Wages Act, the mandatory treble damages of the Wages Act apply. Many lower courts answered yes, and Devaney gives the highest court in Massachusetts the opportunity to definitively answer this question.
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