Question

We are considering taking legal action against a former employee for theft of company property. When I called the AIM Employer Hotline, the person said based on the value I would have to go to Small Claims Court. Could you provide me with a little information about the Small Claims Court?

Answer

Small Claims Court can be an effective way to pursue a legal claim depending on a company’s particular circumstances. Here are the basics:

$7,000 claim cap – Unless a claim is based upon property damage from an automobile accident, it can’t be for more than $7,000. There is an exception when the claim may be subject to statutory damages (such as the trebling of damages based on the nonpayment of wage claim) or attorney’s fees that brings the potential award to more than $7,000.

Statute of limitations – The “statute of limitations” varies based on the nature of the claim and applies both to small claims and to regular civil lawsuits. Generally, a contract-based claim or a consumer protection law-based claim must be brought within six years, and a claim resulting from negligence or intentional harm must be brought within three years, but there are exceptions.

Jurisdiction – The Commonwealth’s District Courts are the court of jurisdiction for small claims. There are District Courts spread across the Commonwealth.

Now comes the tricky part: moving forward with the lawsuit.

·       Demand letter – To begin the process, send a “demand letter” to the person you intend to sue. Include a detailed explanation of the issues in question, including dates, items that the former employee has not returned. Reference any written proof you may have the employee was issued those items such as a signed document affirming that the company issued the equipment to the employee. If the former employee owes money for something such as unpaid health premiums following their failure to return from a leave of absence, make sure to inform the employee of that amount as well. Finally, include a statement along the lines of “If you do not fulfill this request within 30 days, the company will pursue legal remedies in small claims court.” Be prepared to move forward with a lawsuit.

·       Filing the lawsuit – As the plaintiff you have a choice as to where to file the lawsuit. The company may sue in its local District Court or in the District Court near where the defendant lives. The benefit of suing in the District Court where the defendant lives is that it is easier to enforce a judgment if you win the case. (If you choose a court near your workplace, and you prevail, you will have to file a different form in the District Court near the defendant, and of course there is a fee for that).

·       What price justice? Can I get my filing fee back?

$40 – claims of $500 or less.
$50 – claims of $500.01 to $2,000.00.
$100 – claims of $2,000.01 to $5,000.00.
$150 – claims of $5,000.01 to $7,000.00.
In certain circumstances you may be able to recover the filing fee. It is up to the clerk magistrate.

·       I’ve won my case — how do I actually get my money?

If you win, the judge should set up a payment hearing (either on the day of the hearing or later) for the debtor and the creditor to set up a payment agreement.

·       What if the former employee no longer lives in Massachusetts?  May I still sue them?

It depends. The Massachusetts “Long-arm law” allows plaintiffs to sue out-of-state parties if they do business in Massachusetts, possesses property in Massachusetts, or participate in contracts or supply services in Massachusetts. If the party profits from business in Massachusetts and their action/lack of action also causes substantial damage in Massachusetts, then they also may be sued.

·       What do I say in court?

Careful planning will help to present your argument to the court. Some tips:

• Provide a brief overview of the issue(s) involved.
• Provide a detailed timeline of events. Bring evidence such as receipts, call records, or pictures.
• Provide a review of steps you have already taken to solve the problem, including the demand letter.
• State what the law says should happen.
• State what damages are owed to you.

AIM members with questions about this or any other human resources issue may call the AIM Employer Hotline at 1-800-470-6277.