Four recent cases in the US District Court for Massachusetts turned out badly for employers. The cases dealt with issues ranging from payment of wages to classification of employees to retaliation.

Individual Liability under the Wage Act

This case is noteworthy for an employee’s allegation that three of the employer’s senior executives were personally responsible for the failure to pay wages, a cause of action permitted under Massachusetts wage-and-hour law. The Massachusetts Wage Act provides that … “The president and treasurer of a corporation and any officers or agents having the management of such corporation shall be deemed to be the employers of the employees of the corporation within the meaning of this section.” (MGL ch. 149, §148).

The case began when the employee brought several claims against her former employer and three of its senior executives. In her lawsuit she made the following claims:

• The employer made late payments and failed to pay wages under the Massachusetts Wage Act (Count I)
• Retaliatory discharge under the same law (Count II).
• The employer breached the covenant of good faith and fair dealing (Count III),
• Unjust enrichment/quantum meruit (Count IV),
• Promissory estoppel (Count V).

The court agreed with the employee that she had a valid claim under the Wage Act because the employer regularly paid commissions and bonuses late. These late payments occurred notwithstanding the fact that she regularly complained to management about them. The court ruled that the claim of retaliation was also valid because the employee was terminated from employment shortly after she filed her non-payment of wages complaint.

While agreeing that the lawsuit could continue against the president and treasurer as individuals, the court dismissed the claim against the third named defendant because he only participated in “some management responsibility,” which is not the same as ‘the’ management of the corporation.

Finally, the court refused to dismiss the employee’s claims III, IV and V listed above.  As a result of the court’s rejection of the company’s motion to dismiss the case will move forward toward trial as the parties enter the discovery phase.

Massachusetts Civil Rights Act – At-Will Status

The employee claims that he was terminated from his job in violation of the Massachusetts Civil Rights Act when the employer interfered with the exercise of his First Amendment rights by threatening to terminate him for expressing his political views. In response to the lawsuit, the employer claimed that it could terminate the employee based upon the employee’s at-will status. The court rejected the motion, as it was not clear from the complaint that the employee was an at-will employee.

The employee claimed that a local media station interfered with the exercise of his First Amendment rights by threatening to terminate him for expressing his political views. The media organization sought to dismiss the claim by arguing that the employee’s complaint failed to sufficiently show that the employer:

• made threats, intimidation, or coercion, or
• interfered with any recognized protected interest.

The company claimed that the only threat, intimidation, or coercion alleged was the threat of termination of employment, and because the Massachusetts Supreme Judicial Court has established as a matter of law that termination of an at-will employee is not coercive, the employee’s claim should be dismissed.

Based on the pleadings by the parties the court could not decide if the employee was at-will or if his employment was governed by a series of collective bargaining agreements (CBAs) which would limit the circumstances under which he could be discharged. Unfortunately, the CBA failed to address the issue of termination, so the court said the parties would have to go to trial to determine the impact of the CBA on the employer’s right to terminate employment.

Misclassification of Delivery Drivers

The Massachusetts Independent Contractor Law continues to challenge employers. In this case several delivery drivers alleged that the employer misclassified them as independent contractors.  The drivers sought summary judgment from the court to confirm their position that they were employees.

The delivery drivers contracted with a federally authorized freight forwarder to deliver appliances and other large consumer goods. The drivers allege that the delivery company misclassified them as independent contractors and unlawfully deducted wages from their pay in violation of the Massachusetts Wage Act. M.G.L. c. 149, §§148 and 150. The drivers also claimed that the employer misclassified them as independent contractors in violation of the Massachusetts 3-prong independent contractor test in Section 148B.

After reviewing the facts, the court ruled that the employer failed to create any genuine factual issues about the employees’ status that would justify a trial and therefore ruled in the employees’ favor.

The Attorney General’s office has a detailed discussion of the independent contractor law.

Occupational Safety and Health Act

The Occupational Safety and Health Act (OSHA) was established to promote a safe and healthy workplace. Among other things, OSHA provides employees the opportunity to report workplace injuries and prohibits employer retaliation against employees for doing so.

In this case, which dates back to 2017, the employer and its CEO were alleged to have violated the anti-retaliation provision of the law by reporting the employee to the Immigration and Customs Enforcement (ICE) agency.

In the original trial, the jury ruled in favor of the injured worker by awarding him $650,000 in damages for the employer’s actions. After losing at a jury trial, the employer appealed, alleging that:

• there is insufficient evidence to establish that the employee engaged in protected conduct,
• the verdict resulted from prejudicial errors in the jury instructions, and
• the exclusion of certain evidence relating to the employee’s arrest record was prejudicial.

The court rejected each of the reasons for appeal. The court agreed the employee notified OSHA multiple times about the workplace injury which led to OSHA’s investigation into the employer.

The court also found no problem with the jury instructions, ruling that “[t]he Court’s jury instruction was neither misleading, complicated, nor inconsistent with the law.”

Finally, the court rejected the employer’s argument about the exclusion of testimony about the injured employee’s prior arrests.  The CEO of the construction company had not been allowed to testify at trial about the employee’s criminal history;  he had wanted this on the record to explain that this knowledge of the employee’s past had led him to report him to ICE, not the reports of workplace injuries.

All these cases resulted in losses for the employers, leading to significant costs from either an award of damages or a lengthy trial.

AIM members with questions about these or other human-resource issues, may call the AIM HR Helpline at 800-470-6277.