Tag Archives: employment law

Non-Compete Reform Comes to Massachusetts

By on August 30, 2018

     After years of trying to find common ground on non-compete reform, the Massachusetts legislature passed a bill – which Governor Charlie Baker signed into law on August 10, 2018 – that promises to significantly change the employment landscape in the Commonwealth. The new law will take effect on October 1, 2018.

The following is a brief, non-exhaustive overview of some of the law’s most notable features:

  • The law defines a non-competition agreement as an “agreement between an employer and an employee, or otherwise arising out of an existing or anticipated employment relationship, under which the employee or expected employee agrees that the employee will not engage in certain specified activities competitive with the employee’s employer after the employment relationship has ended,” but excludes certain agreements from its purview, including: (1) non-compete agreements made in connection with the sale of a business; (2) non-compete agreements made in connection with the cessation or separation of employment (provided the employee is given seven business days to rescind acceptance); (3) employee non-solicitation covenants; (4) customer/client/vendor non-solicitation covenants; and (5) non-disclosure of confidential information agreements.                                                                                                                                                                                                                   
  • Both traditional employees and independent contractors are covered under the law.                                                                                                                                                                                              
  • All agreements must be in writing and signed by both parties, and must expressly affirm an employee’s right to consult with counsel before signing.                                                                                                                                                                                                                                                                                                       
  • If a non-compete agreement is signed at the beginning of an employment relationship, it must be given to the employee when the employment offer is made or 10 days before the commencement of employment, whichever is earlier.  Agreements signed after the commencement of employment must be “supported by fair and reasonable consideration independent from the continuation of employment.”                                                                                
  • The law requires so-called “garden leave pay” or some “other mutually agreed-upon consideration.” Garden leave pay refers to an agreement in which the employer, during the course of the restricted period, continues to pay the former employee at least 50 percent of the “highest annualized base salary” that employee received within the two years preceding his or her termination. The law does not further define or elaborate upon what “other consideration” might be acceptable in lieu of garden leave pay, however.  In addition, it remains to be seen whether garden leave pay constitutes sufficient consideration for those non-competes executed after the commencement of an employment relationship, or whether some consideration above and beyond the garden leave pay is required in those circumstances.                                                                                                                                                  
  • Agreements not to compete must be “reasonable.” They can be no broader than necessary to protect a legitimate business interest; they cannot exceed one year in duration; their geographic scope must be reasonable; and they must otherwise be reasonable “in the scope of proscribed activities in relation to the interests protected.”                                                   
  • Non-compete agreements may not be enforced against non-exempt employees; undergraduate or graduate students engaged in short-term employment; employees who have been terminated without cause or laid off; or employees who are 18 years old or younger.                                                                                                                                                      

These new requirements apply only to non-compete agreements entered into on or after October 1, 2018. Nevertheless, employers may wish to revise existing non-compete agreements for current employees in order to avoid disparities amongst employees, as well as potential future litigation.

 

 

Show Me the (Same Amount of) Money!

By on June 21, 2018

The state’s new pay equity law, which amends the Massachusetts Equal Pay Act (“MEPA”), will take effect on July 1, 2018.  It is one of the strongest pay equity laws in the country, and subjects employers to double damages and attorneys’ fees in the event of a violation.  Moreover, it is a “strict liability” statute.  Thus, whether or not an employer intends to discriminate against employees of one gender is “irrelevant” to the analysis.

The amendments prohibit employers from, among other things:

• Paying different wages to people of different genders who perform “comparable work,” unless the difference in salary is attributable to one (or more) of six enumerated statutory factors;

• Asking job applicants about their wage or salary history;

• Decreasing the wages of an employee solely to close the wage gap;

• Retaliating against employees for exercising their rights under MEPA.

The revisions also establish a safe harbor provision for employers who perform self-evaluations of their pay practices.

What Does “Comparable Work” Mean?

MEPA defines “comparable work” as work that “requires substantially similar skill, effort, and responsibility” that is performed under similar working conditions.  Employers should not assume that a job title, or even a job description, necessarily determines comparability.  In fact, employees need not even be in the same business unit or department in order have “comparable” jobs.  Notably, this is a broader definition than the “equal work” standard under federal law.

Even if employees are in comparable roles, however, employers are permitted to pay them different salaries if the difference is based on of one (or more) of the following factors:

• A seniority system (as long as seniority is not affected by pregnancy, parental or family leave);
• A merit system;
• A system that measures earnings by quantity or quality of production, sales, or revenue;
• The geographic location in which a job is performed;
• Education, training, or experience, as long as these factors are reasonably related to the job in question; and
• Travel that is a regular and necessary part of the job.

What Employers Should Know About the Safe Harbor Provision

In order to trigger the safe harbor provision, which establishes an affirmative defense against liability for claims of pay discrimination, an employer must have conducted a “reasonable and good faith” pay audit within the previous three years (and before an employee files an action), and must demonstrate that it is making “reasonable progress” towards eliminating wage differentials across genders.

Self-evaluations not only help employers identify and rectify wage gaps, they guard against liquidated damages in the event of a judgment against the employer, even if the evaluation was not “reasonable” in detail and scope.

Guidance for Employers

The Massachusetts Attorney General’s Office has issued a Guidance that addresses the amendments.  While the Guidance does not have legal force, it is a useful compliance tool and a good place to start if you have basic questions about how to ensure you are compensating your employees equally across genders for “comparable work.”  However, employers should bear in mind that “the complexity of the analysis required will vary significantly depending on the size, make-up, and resources of each employer”; the Guidance does not, and cannot, address the many fact-specific situations that may arise at any given place of employment.

In addition to the Guidance, the AG’s Office has generated a “Pay Calculation Tool” to help employers identify and evaluate gender-based pay gaps.  Smaller employers with clearly defined groupings of comparable jobs and relatively simply pay structures may benefit from using the tool, at least as a first step; it is not appropriate for large pay groups or complicated pay structures.  Furthermore, the data the tool generates may be discoverable in litigation or government investigations, so employers should consult with counsel before conducting any self-evaluation.

“Ban-the-Box” Update for Employers

By on May 21, 2018

Since 2010, employers in Massachusetts have been prohibited, under the Criminal Offender Record Information (“CORI”) Reform Act, from requiring a job applicant to check a box indicating that he or she has a criminal history (the “ban-the-box” law).  Employers are also prohibited from requiring applicants and employees to disclose certain criminal information, including arrests and criminal cases that did not result in a conviction; first convictions for various misdemeanor offenses; misdemeanor convictions where the date of conviction or release from incarceration occurred five or more years prior to the date of the employment application (in the absence of an intervening conviction); juvenile records; and sealed criminal records.

Under new amendments to the CORI Reform Act signed by Governor Baker on April 13, 2018, and slated to take effect on October 13, 2018, employers may not inquire into misdemeanor convictions where the date of the conviction occurred three or more years from the date of the application (unless there was an intervening conviction).  In addition, employers may not ask applicants about “a criminal record, or anything related to a criminal record, that has been sealed or expunged . . . .”  Finally, employers must include the following statement on any application “which seeks information concerning prior arrests or conviction of the applicant”: “An applicant for employment with a record expunged pursuant to section 100F, section 100G, section 100H or section 100K of chapter 276 of the General Laws may answer ‘no record’ with respect to an inquiry herein relative to prior arrests, criminal court appearances or convictions. An applicant for employment with a record expunged pursuant to section 100F, section 100G, section 100H or section 100K of chapter 276 of the General Laws may answer ‘no record’ to an inquiry herein relative to prior arrests, criminal court appearances, juvenile court appearances, adjudications or convictions.”

Employers are advised to take note of these important changes and revise their applications, and application processes, accordingly.

Strang Scott Welcomes Alexandra Deal to the Firm

By on May 1, 2018

Strang, Scott, Giroux & Young, LLP, with offices in Massachusetts and New Hampshire, welcomes Alexandra H. Deal as Of Counsel to the Firm. 

Ms. Deal is a seasoned litigator with more than a decade of experience representing clients in state and federal court, along with various administrative agencies.  She advises clients in employment-related matters and litigates employment-related disputes, including cases involving alleged discrimination, wage and hour violations, restrictive covenants, harassment and other employment matters.  She is a trained workplace investigator, and has conducted numerous internal investigations involving allegations of discrimination and other unlawful conduct.

Ms. Deal is an accomplished appellate attorney, having briefed, argued, and won cases at the Massachusetts Appeals Court, the Supreme Judicial Court, and the Court of Appeals for the First Circuit.

Prior to joining Strang, Scott, Giroux & Young, LLP, Ms. Deal maintained a successful solo practice for a number of years.  She graduated cum laude from Boston College Law School and clerked for a judge at the District of Columbia Court of Appeals before entering private practice.

The Firm looks forward to utilizing Ms. Deal’s knowledge and experience in employment matters to the benefit of its clients.  You can contact Ms. Deal directly at adeal@www.strangscott.com or by telephone at (857) 233-5534.

Massachusetts Pregnant Workers Fairness Act Takes Effect

By on April 25, 2018

As of April 1, 2018, all Massachusetts employers with six (6) or more employees are subject to the state’s new Pregnant Workers Fairness Act (the “Act”).

In light of the pre-existing federal law in this area, what is most notable about the Act is that it requires covered employers to provide:

• non-exempt and exempt employees with reasonable breaks and an appropriately private place to express breast milk;
• written notice to their employees regarding the rights provided under the Act; and
• reasonable accommodation(s) to employees on the basis of pregnancy and pregnancy-related conditions.

Reasonable accommodations may include thing like frequent or longer breaks, light duty, or a modified work schedule.

It is unlawful to retaliate against employees for requesting such an accommodation. Likewise, employers cannot deny an employment opportunity to an employee if the denial is based on the employer’s knowledge that it would have to provide the employee a reasonable accommodation, nor can an employer refuse to hire someone on the basis of pregnancy or a pregnancy-related condition, provided that person can perform the job (with a reasonable accommodation, if necessary).

Employers must provide the required written notice in a handbook, pamphlet, or other appropriate form to:

• current employees on or before the effective date of the Act;
• a newly-hired employee at the time of his or her hire; and
• any employee who notifies the employer of a pregnancy or a pregnancy-related condition, within 10 days of such notice.

Employers may satisfy the written notice requirement using the two-page Pregnant Workers Fairness Act Guidance published in part for this purpose by the Massachusetts Commission Against Discrimination (MCAD). The MCAD has also published a helpful Q&A regarding the Act.  Should you have questions concerning compliance with the Act or other matters, speak with an experienced employment attorney.

Strang, Scott honored in 2016 Edition of Super Lawyers

By on October 20, 2016

Strang Scott is honored to announce the selection of Christopher Strang as a 2016 Super Lawyer and Jordan Scott as a 2016 Rising Star by the Massachusetts edition of Super Lawyers. Mr. Strang has been recognized for his outstanding work in construction litigation for the eighth consecutive year, first as a Rising Star and then as a Super Lawyer, while Mr. Scott has earned his second consecutive recognition for his employment practice. The Super Lawyers selection team chooses only 5% of eligible attorneys as Super Lawyers, and only 2.5% of eligible attorneys as Rising Stars. Both lists are the result of a process that includes a statewide lawyer survey, independent research, and peer reviews.

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Massachusetts Enacts Equal Pay Law

By on August 3, 2016

On August 1, 2016, Massachusetts governor Charlie Baker signed the equal pay law, a law that has been working through the legislature since 1998. The law takes effect on July 1, 2018.  The law bars discrimination on the basis of gender in the payment of wages, including benefits and other compensation, for “comparable work.”  The statute defines comparable work to mean work that requires substantially similar “skill, effort and responsibility” and is performed under similar working conditions. The law allows variation in wages based on:

  • seniority;
  • merit;
  • productivity as measured by quantity or quality of sales or production;
  • geographic location;
  • education, training, or experience reasonably related to the job; or
  • regular travel.

The law provides several direct remedies for violations with a three-year statute of limitations.  Aggrieved employees can bring a lawsuit on behalf of themselves and similar situated employees, and recover the amount of wages underpaid, as well as an additional amount of wages underpaid as liquidated damages (amounting to double damages), plus reasonable attorney’s fees.  Employers also face liability for retaliation under the law.

An employee’s previous wage or salary history may not be used as a defense, but the law does provide employers with one affirmative defense:  if, within the prior three years and before a lawsuit is brought, employers complete a good faith self-evaluation of its pay practices and demonstrate that reasonable progress has been made towards eliminating pay differentials based on gender, liability under this law can be avoided. Employers may design their own self-evaluations, if they are reasonable in detail and scope in light of the employer’s size.

Finally, this law makes illegal some common practices.  Employers may not bar employees from discussing their own wages or the wages of fellow employees.  Further, employers may not screen job applicants based on salary history or even ask about prior wages or salary history.  However, prospective employees may provide written authorization for a prospective employer to confirm prior wages, but only after the prospective employer makes an employment offer.

The attorney general is empowered to bring its own lawsuit based on equal pay violations and may issue regulations interpreting this law, which can include templates for employer self-evaluations.  Although gender discrimination has long been illegal in Massachusetts, this law provides employees with new avenues for relief and places additional restrictions on employers. Employers should consult with Massachusetts employment attorneys to confirm that hiring practices will comply with the law and to ensure that potential liability is limited through self-evaluations.

Defend Trade Secrets Act – Employment Implications

By on June 2, 2016

President Obama recently signed the Defend Trade Secrets Act (“DTSA”), which provides a federal private right of action for the misappropriation of trade secrets. Previously, trade secret claims were handled only at the state level. The DTSA does not preempt state law, but instead provides another avenue for recovery. Trade secret owners may pursue federal claims including property seizure (to prevent dissemination of trade secrets), injunctive relief, and damages for actual loss and unjust enrichment. Property seizure is not lightly granted, and the DTSA provides a detailed framework for when and how property may be seized. Further, if the trade secret is willfully and maliciously misappropriated, courts may award double damages and attorney’s fees.

In the employment context, employees are immune from liability under the DTSA (and arguably state laws as well given the DTSA’s specific wording) for disclosing trade secrets that are made in confidence to a government official or attorney for the purpose of reporting or investigating a violation of law. Employees are permitted to use trade secret information in a lawsuit alleging retaliation by an employer for reporting a trade secret violation, as long as any court document containing trade secrets is filed under seal.

Although the DTSA provides a powerful cause of action for employers, the DTSA also contains some employee protections. Employers must now provide notice to employees of the immunities contained in the DTSA in agreements with employees (such as nondisclosure agreements), which may be handled by including a cross-reference to a company policy containing notice of the immunity. Failure to provide such notice prevents employers from receiving multiple damages or attorney’s fees under the DTSA. While injunctions are available under the DTSA, any injunction may prevent actual or threatened misappropriation but must not prevent the employee from entering into an employment relationship or conflict with state laws concerning the restraint of trade.

In sum, employers may now bring a civil action against employees who misappropriate trade secrets that can lead to damages and injunctive relief including seizure. However, to receive the full benefits of the DTSA, employers must update their nondisclosure and similar agreements to inform employees of the immunities available under the DTSA.  The DTSA’s effect on the technology, biotechnology and pharmaceutical industries almost certainly will be far-reaching.  As a result, the DTSA is of particular importance to businesses in greater Boston, Cambridge and other emerging technical hubs in Masshachusetts and throughout New England.  Both employers and employees should contact a Massachusetts employment attorney to update their agreements and confirm their duties.

StrangScott Partners Selected as recipients of 2015 Super Lawyer Awards

By on October 29, 2015
 

 

We are proud to announce the selection of Christopher Strang as a 2015 Super Lawyer and Jordan Scott as a 2015 Rising Star by the New England edition of Super Lawyers. Mr. Strang is being recognized for his outstanding work in construction litigation for the seventh year in a row, while Mr. Scott earned his first recognition for employment and labor work. 

Both the Super Lawyer list and Rising Star lists are the result of an intensive, multi-step selection process involving nominations, peer review, and independent research. Only 5% of eligible attorneys are selected as Super Lawyers, while only 2.5% of eligible attorneys are selected as Rising Stars.

Massachusetts Supreme Judicial Court Interprets the “Tips Act”

By on April 16, 2015

Massachusetts law protects the “tips” or gratuities that waiters and similarly employed individuals typically receive from customers.  That law is commonly known as the Tips Act  (M.G.L. ch. 149, sec. 152A). The Tips Act provides that all tips must be given to the employees that earned the tips, and that tips cannot be shared with managers or the employer itself.  The Tips Act applies to three categories of employees:   “wait staff employees,” “service employees,” and “service bartenders.”  “Wait staff” includes waiters, waitresses, bussers, and counter staff who serve food or beverages (or bus tables) in a restaurant or banquet facility and who have no managerial responsibility.  “Service employees” is a catch-all definition that includes any employees who provide services directly to customers and who customarily receive tips, but also have no managerial responsibility.  “Service bartenders” are employees who prepare beverages to be served to customers by other employees.

A recent Supreme Judicial Court case, Meshna & others vs. Scrivanos & another, interpreted some key provisions of the Tips Act.  In Meshna, current and former Dunkin’ Donuts employees filed suit over a “no-tipping” policy found at some individual stores that prohibited employees from receiving tips from customers.  The plaintiffs argued that the Tips Act prevented employers from instituting a “no-tipping” policy.  The defendants prevailed, with the Court finding that the Tips Act allows employers to have a “no-tipping” policy so long as the policy was clear to customers.

The Court went on to consider the scenario where an employer has a no-tipping policy, but does not communicate that policy to customers.  The Court held that if the policy is not communicated, then any tips left at the store belong to the employees, as customers have a reasonable expectation that the money left as tips will be given to the wait staff.  As long as the policy is explicitly stated by the employer, however, even money left by customers may be retained by the employer without violating the Tips Act, regardless of the customer’s intent.  The Meshna holdings are consistent with existing interpretations of the Tips Act.

Some restaurants and banquet halls impose an additional “administrative” fee on their invoices and contracts. Under the Tips Act, employers are permitted to impose an “administrative fee,” or something similar, but such fees must be clearly stated to all customers (in a contract or on the bill itself) that the administrative fee is paid to the employer or management.  Because the Tips Act defines “service charge,” “tip,” and “gratuity” as synonyms, employers that desire to include an additional charge beyond the cost of the food, should avoid the term “service charge” and use “administrative fee” or “management fee” as a best practice.  Massachusetts Courts want to see evidence that the employer informed customers that any extra fees do not represent a gratuity for employees.  Should you have questions regarding whether your invoices or current practices comply with the Tips Act, consult your employment law attorney for a definitive answer.