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Biz Legal Bytes—Understanding Certain Massachusetts Business Law Issues

As you increase your understanding of Massachusetts business law to protect and promote your business, consider these common questions and answers to guide you.

• Why Is It Advisable to Have an Employee Handbook?
• What Is the New Notification Requirement under the Personnel Records Law?
• What Strategies Can A Company Use to Cut Exposure to Claims of Discrimination?
• What Steps Should a Business Consider Before Firing or Demoting an Employee?
• What are the Main Areas of Employment Discrimination Claims?
• What are Some Legal Strategies to Minimize Possible Legal Liability?
• What are Key Duties under the Family Medical Leave Act (FMLA) and under the Massachusetts Maternity Leave Act (MMLA)?
• Why is the Massachusetts Wage Act So Vital A Matter for Compliance in Paying Wages, Earned Commissions, and Other Income When Due?

WHAT ADVANTAGES ARE THERE TO HAVING AN EMPLOYEE HANDBOOK AND JOB DESCRIPTIONS AND WHAT SHOULD A HANDBOOK CONTAIN?

We recommend having an employee handbook to provide one central, comprehensive statement of company policies and procedures that is accessible to managers and employees. An employee handbook should include at minimum the following information:

• Confirmation that all workers are employed as at-will employees.
• A statement of anti-discrimination policy, covering:
  • An equal employment opportunity statement.
  • Policies about sexual .harassment and other forms of harassment in the workplace.
• E-mail, web access and voice mail policies
• The Massachusetts Maternity Leave Act (MMLA) [link] / Family Medical Leave Act [link] policies.

While not the case under most circumstances, Massachusetts courts have found that presenting an employee handbook to an employee may suggest that an employment contract exists even if there is disclaimer language within the pages of the handbook. A recent case from Maine brings home the importance of having and keeping up to date employee job descriptions. Having company legal counsel with employment law background can be important. We work to help you take preventive measures.

WHAT IS THE NEW NOTIFICATION REQUIREMENT UNDER THE MASSACHUSETTS PERSONNEL RECORDS LAW?

A recent amendment to the state's personnel records statute, G. L. c. 149, §52C, requires employers to notify employees when an unfavorable report is added to their files within 10 days of “to the extent that the information is, has been used or may be used in a negative employment action or decision such as disciplinary action." Employees cannot sue employers who violate the notification requirement. Nonetheless, for employers, the law presents a number of problems.

WHAT STEPS SHOULD A BUSINESS CONSIDER BEFORE FIRING OR DEMOTING AN EMPLOYEE TO AVOID WRONGFUL TERMINATION CLAIMS?

Consider These Issues before Firing or Downgrading an Employee.

Before you fire an employee or take some other negative employment action, you should have some awareness of the law. Fewer problems result if there is a procedure or established company policy. It is wise to consult an employment attorney about the particulars of the potentially troublesome termination to get advice about what steps should be taken. Unless you have entered into a contract with an executive or key person or are subject to a collective bargaining agreement, your employee is probably considered an employee-at-will. A review with legal counsel is wise to assure that you have followed any contractual promises, including proper notice. This review may include Wages Act Compliance - which you have paid the employee for unused vacation days, earned commissions, overtime and other earned compensation or you will run afoul of the [link] .

WHAT STRATEGIES CAN A COMPANY USE TO CUT EXPOSURE TO CLAIMS OF DISCRIMINATION?

Basic Procedures for Minimizing Exposure to Claims of Employment Discrimination from Job Applicants and Employees.

Massachusetts employers (under both State and Federal law) may not, of course, discriminate against prospective or present employees based on race, color, religious creed, national origin, ancestry, sex, age, criminal record, handicap (disability), mental illness, retaliation, sexual harassment, sexual orientation, and genetics. In addition, employers have an affirmative responsibility to provide maternity leave to biological and adoptive parents. We need to be aware that any negative employment action not just termination may be considered discriminatory if it can appear that it discriminates.

As a start, for reducing or eliminating employment discrimination claims:

• In the case of any “problem employee,” we advise that employers begin to document performance problems, attitude problems, tardiness, or interpersonal issues and there is more to be done.
• The sooner you begin documentation, the better. Include information and even quotes referring to any discussion or dialogue you have had with the employee, and put the detailed notes in the personnel file and notify the employee under the new law.

In employment discrimination cases, the issue is frequently pretext – whether the reasons given were an excuse for intent to discriminate - in firing or other negative employment decision. “Pretext” is in the eye of the beholder, but we can help steer you away from such claims.

Keep in mind that, if a claim arises, the first thing an experienced plaintiff’s employment attorney will request from the company is to have a copy of the personnel file under Massachusetts law to see if you have a good defense. The employee’s personnel file is something you must make available to the employee for copying within five business days and up to twice a year. Employee records should be kept up to date.

WHAT ARE THE MAIN AREAS OF EMPLOYMENT DISCRIMINATION?

The big four of employment discrimination claims are:

1. Age

2. Sex

3. Handicap

4. Race or Ethnicity

To avoid violations, we must be aware of what constitutes employment discrimination. Age discrimination, sexual harassment, disability terminations and discrimination based on race or ethnicity are made unlawful by G. L. Ch. 151B. This complex statute is enforced by the Massachusetts Commission against Discrimination (MCAD). The following touches upon some of what an employer should be aware of. Providing seminars for management and employees by us or others is a wise preventive measure that MCAD endorses.

1. Age Discrimination

Be aware that anyone over age 40 is in a “protected” or suspect class for age discrimination. If you failed to promote when qualified a more senior employee and hire or promote a much younger less qualified person, or terminate that older person and hire a much younger person without documentation of valid reasons not pretext for discrimination, you face greater exposure for age discrimination claims.

What can you expect if you get caught up in an age discrimination situation? You could face the double damages discussed in the “advice to employees” section of this web site. Such punitive awards are among the most potentially detrimental in the employment field.

2. Sex Discrimination / Sexual Harassment

Sex discrimination covers a broad range of prohibited actions from failure to treat different sexes the same or those with different sexual orientations the same to failure to protect the rights of pregnant employees. Sexual harassment lawsuits have been a growing field in employment discrimination law for years. As long as human nature is what it is, a business is at risk for sexual harassment claims. Number one in prevention is to establish a strong, no tolerance policy, communicated to all employees, through periodic training in sensitivity and prevention. Additionally, there needs to be careful monitoring by and, in particular, of managers as well as line employees.

The next step to handle sexual harassment issues is prompt investigation of complaints and appropriate remedial action. This can require outside help in conducting the investigation, because false accusations that can damage a career may result in a lawsuit as well.

Elements of sexual harassment include traditional “quid pro quo” situations, where a manager seeks sexual favors for advancing an employee or for not taking a negative employment action. We have handled an unusual case of a consensual love affair between a CEO and a high level manager that led to a wrongful termination claim. Creation of a “hostile work environment” is the often misunderstood basis for claims of sexual harassment.

3. Handicap or Disability Discrimination

The third area of discrimination claims that many companies face with frequency is Disability (the federal Americans with Disability Act) charges or under handicap discrimination under Massachusetts law. When an employee reports a medical problem and requests a reasonable accommodation, it is often time to consult an employment attorney. Both the legal definitions of whether that person qualifies as a handicapped person and how the definitions are applied are constantly being litigated and are very fact specific.

G.L. Ch. 151B defines a "handicapped person" as any person who "(a) [has] a physical or mental impairment which substantially limits one or more major life activities. . . (b) [has] a record of such impairment; or (c) [is] regarded as having such impairment."

Attorney Morse had a case before the Massachusetts Court of Appeals involving the definition of handicap in the case of an employee who has Attention Deficit Disorder and Dyslexia. A major defense in such situations is that an employee is unable to meet the essential requirements of the job or unable to show that the handicap meets other requirements such as that it impairs the ability to function in a broad range of jobs. These can be potent defenses when raised by knowledgeable employment counsel.

4. Race (Ethnicity)

Employment discrimination claims based on race and ethnic disparate treatment still occur in the workplace if our firm’s practice is any indication. If you fire a poorly performing employee who falls within a protected class, he or she may well try to claim discrimination. The good news is that the MCAD cases show an even-handed approach when a race neutral employer fairly applies honest employment standards in the workplace. It dismisses a significant share of discrimination claims for lack of probable cause. As in any claim of employment discrimination, a policy of fairly promoting minorities, women and gays and properly documenting employment problems beforehand or getting statements of performance or other problems from managers and fellow employees on a regular basis is the best defense to false claims of discrimination.

WHAT ARE MY DUTIES AS AN EMPLOYER UNDER THE FAMILY MEDICAL LEAVE ACT (FMLA) AND UNDER THE MASSACHUESETTS MATERMINTY LEAVE ACT (MMLA)?

Under federal law, eligible employees are allowed to take up to 12 weeks of unpaid medical leave with continued medical benefits and restoration of their original position upon return. The Family and Medical Leave Act (FMLA) apply to companies with at least 50 employees, and an employee is eligible under FMLA when they:

• Have worked for the same employer for the previous 12 months.
• Have worked at least 1250 hours in the previous 12 months.
• Are employed by a "covered" employer, which is:
  • All federal, state, and local governments and agencies
  • Private employers with 50 or more employees for 20 weeks in the calendar year and engaged in interstate commerce.

For companies with fewer than 50 employees down to 6 employees, the requirements of the Massachusetts Maternity Leave Act (MMLA Chapter 149: Section 105D) are applicable. MMLA requires that pregnant women be allowed up to 8 weeks of unpaid leave and be restored to her previous or a similar position upon her return to employment following leave. That position must have the same status, pay, length of service credit and seniority as the position the employee held prior to the leave. If an employee's job was changed temporarily because of her pregnancy prior to leave (e.g., her hours were reduced or her duties were changed as an accommodation) she should be restored to the same or similar position held prior to such temporary change. In August of 2010 in a 4-to-3 ruling, the Massachusetts Supreme Judicial Court said the 1972 law guarantees full-time employees eight weeks off to give birth or to adopt a child, after which they are entitled to return to the same job or a comparable one. Beyond that, however, the law does not protect them. The Court said that if an employer promised more than 8 weeks, MCAD’s guidelines were invalid in suggesting that the law provided protection and employees would be left to contractual remedies despite their lesser protections.

WHY IS THE MASSACHUSETTS WAGE ACT SUCH A SOURCE OF POTENTIALLY HIGH LIABILITY COSTS FOR BUSINESS FOR UNPAID WAGES, EARNED COMMISSION INCOME AND OTHER COMPENSATION NOT TIMELY PAID?

The “Weekly Wage Act” With Stiff Penalties regarding Earned but Unpaid Compensation Requires Careful Attention and Consultation.

The Massachusetts Weekly Wage Act has a number of complicated requirements and stiff penalties for non-compliance for payment of employee compensation and, in particular, should be of great concern if a business is mistakenly treating as independent contractors “those who should be classified as employees.” [link] The Act requires, with certain exceptions, that wages – broadly defined - be paid within a certain time of when they are earned, not necessarily weekly. The Wages Act also requires, among other things, that an employer pay in full the wages and vacation pay of any discharged employee on the day of discharge. According to the statute, the term 'wages' includes holiday or vacation payments as well as earned commissions then determined and due.

For violations of the state’s Wage and Hour Law, an employee may recover three times the unpaid compensation, attorneys' fees and costs, and the attorney general may assess civil penalties. Such claims will arise when an employee has been terminated with unpaid compensation due.

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