Labor & Employment Judicial Update

Tuesday, January 01, 2013

By Christopher Feudo, Foley Hoag LLP

In the final months of 2012, Massachusetts and federal courts have issued several significant decisions in the area of employment law.

Crocker v. Townsend Oil Company, Inc., SJC-11059, 2012 WL 6217368 (Mass. December 17, 2012)

In Crocker, a case involving the alleged misclassification of an employer’s delivery drivers as independent contractors, the SJC made several important rulings with respect to the Massachusetts Wage Act, G.L. c. 149, §§ 148 and 150.  Most significantly, the SJC address the validity of releases of Wage Act claims.  Citing the “important public policy considerations underlying the Wage Act,” the SJC held that an agreement containing a general release purporting to waive Wage Act claims must be “plainly worded” and understandable to the average individual” and must “specifically refer to the right and claims under the Wage Act that the employee is waiving.”  The SJC reasoned that such requirements were necessary to prevent individuals from unwittingly waiving their rights under the Wage Act.  Additionally, the SJC addressed several issues relating to the statute of limitations under the Wage Act.  First, the SJC held that an employee whose claims for unpaid overtime are barred by the two-year statute of limitations imposed by G.L. c. 151, §20A may still bring a claim for unpaid wages under the Wage Act, provided the claim falls within the three-year statute of limitations contained in G.L. c. 149, § 150.  Preserving the distinction between overtime and straight time pay, however, the SJC held that such an employee’s recovery is limited to unpaid time worked at his or her regular rate, not the overtime rate set by c. 151 c., § 1A.  Second, the SJC declined to extend the continuing violation doctrine to Wage Act claims, holding that an employee cannot recover for Wage Act violations occurring outside of the statute of limitations period on a continuing violation theory.  The SJC reasoned that the continuing violation theory was not applicable in the context of the Wage Act because a plaintiff suffers a discrete injury each time a defendant fails to pay him or her rather than “a single and indivisible course of wrongful action.” 

Lopez v. Commonwealth, 463 Mass. 696 (2012)

In Lopez, the SJC held that a plaintiff can establish a claim of unlawful interference under G.L. c. 151B, § 4(4A) by evidence of disparate impact.  Lopez involved claims by African-American and Hispanic police officers employed by Massachusetts municipalities, on behalf of themselves and a class of similarly situated individuals, against the Commonwealth and the division of human resources concerning its creation, design and administration of a multiple choice test taken by candidates for promotion to police sergeant positions.  Municipalities use the results of the exam in making promotion decisions.  The plaintiffs claimed that the exam had a discriminatory adverse impact on African-American and Hispanic candidates, causing them to be ranked lower than non-minority candidates and preventing them from receiving promotions.  The plaintiffs asserted, among other claims, that the division violated G.L. c. 151B, § 4(4A) by interfering with the plaintiffs’ enjoyment of their right to be free from discrimination in the terms, conditions and privileges of employment pursuant to G.L. c. 151B.  In response, the division argued that the word “interfere” as used § 4(4A) only covered intentional acts specifically undertaken with the intent to deprive a person of their rights under G.L. c. 151B, and the plaintiffs had failed to alleged specific intent to discriminate against the plaintiffs.  Rejecting the division’s argument, the Court held that a plaintiff does not need to allege that a defendant’s interference was undertaken with a specific intent to discriminate to assert a § 4(4A) claim.  Rather, it held that an interference claim may be established by evidence of disparate impact.  According to the Court, “the element of intentionality is satisfied where it is shown that a defendant knowingly interfered with the plaintiffs’ right to be free from discrimination in the terms, conditions and privileges of employment on the basis of a protected category.”  A plaintiff can make out a prima facie under § 4(4A) by establishing “(1) a defendant used specific employment practices or selection criteria knowing that the practices or criteria were not reasonably related to job performance; and (2) the defendant knew that the practice or criteria had a significant disparate impact on a protected class or group.”  The plaintiffs, the Court found, had alleged facts that if true would meet these elements.

Matamoros v. Starbucks Corp., 699 F.3d 129 (1st Cir. 2012)

In Matamoros, the First Circuit interpreted the Massachusetts Tips Act, G.L. c. 149, § 152A, to hold that Starbucks’ tip-pooling policy, which permitted shift supervisors to participate in tip pooling along with baristas, violated the statute.  The Tips Act provides that a “wait staff employee” cannot be required to share tips with someone who is not a “wait staff employee.”  Under the statute, a “wait staff employee” is one who, among other things, as “no managerial responsibility.”  Looking at the plain language of the statute, the legislative history concerning the 2004 amendments to the Tips Act, and the Massachusetts Attorney General’s interpretive guidance, the First Circuit interpreted the statute as barring employees who possess any managerial responsibilities from participating in tip pooling arrangements with “wait staff” employees.  The First Circuit found that Starbucks’ shift supervisors possessed at least some managerial responsibilities and, as such, were not “wait staff” employees, making Starbuck’s tip-pooling scheme unlawful.

Ryan v. Holie Donut, Inc., 82 Mass. App. Ct. 633 (2012)

Relying on the exclusivity of the remedies of G.L. c. 151B, the Appeals Court upheld the Superior Court’s dismissal of the plaintiff’s claim for wrongful termination in violation of public policy.  Nearly three years after her termination, the plaintiff brought a common-law claim of wrongful termination against her former employer, claiming that she was discharged for reporting to law enforcement officials that a police officer who was a customer of her employer had touched and sexually assaulted her.  The Superior Court dismissed her claim, reasoning that the plaintiff was in substance alleging a claim of retaliation in violation of G.L. c. 151B and thereby required that she complain to the MCAD within 300 days of the alleged misconduct, which she had failed to do.  On appeal, the Appeals Court affirmed the Superior Court’s decision.  The Appeals Court found that a realistic assessment of the plaintiff’s complaint revealed that plaintiff was alleging that she was terminated after complaining about a pattern of sexual harassment by the employer’s customer.  Because such a claim fell within the statutory jurisdiction of the MCAD, she was required file an administrative complaint with the MCAD to pursue her claim.  Her failure to so do mandated the dismissal of her claim, despite her attempt to classify it as a common law claim.

Temple Emanuel of Newton v. Massachusetts Commission Against Discrimination, 463 Mass. 472 (2012)

In Temple Emanuel, the SJC held that the so-called ministerial exception barred a teacher’s discrimination claims over a religious school’s decision not to rehire her.  According to the SJC, the fundamental question in deciding whether the ministerial exception applies to a religious school teacher is not whether the teacher is called a minister or holds the title of clergy, but whether “it would infringe the free exercise of religious or cause excessive entanglement between the State and a religious group if a court were to order a religious group to hire or retain a religious teacher that the religious group did not want to employ, or to order damages for refusing to do so.”  The SJC concluded that it would, reasoning that “[w]here a school’s sole mission is to serve as a religious school, the State should not intrude on a religious group’s decision as to who should (and should not) teach its religion to the children of its members.” 

Loubriel v. Fondo Del Seguro Del Estado, 694 F.3d 139 (1st Cir. 2012)

In Loubriel, the First Circuit held that the receipt of a right-to-sue notice by an EEOC’s complainant’s attorney is sufficient to begin the 90-day filing period in which the complainant is required to bring suit.  The district court had dismissed the plaintiff’s ADA complaint because she had failed to file suit with the 90-day filing period, despite the plaintiff’s claim that she did not receive the right-to-sue notice until months after it was purportedly mailed.  The district court’s decision was based on the presumption that the right-to-sue notice was timely received by the plaintiff and that the plaintiff failed to provide sufficient evidence to rebut the presumption.  On appeal, the First Circuit sidestepped the district court’s reasoning, relying instead on the fact that right-to-sue notice had been mailed simultaneously to the plaintiff’s attorney.  According to the Court, the plaintiff had constructive notice of the 90-day filing period through her attorney’s receipt of the notice.  Absent evidence to the contrary, the plaintiff’s attorney was assumed to have received the right-to-sue notice within a reasonable time after it was mailed, which the court found to be two to five days after mailing.  Under this formulation, the 90-day period elapsed before plaintiff filed suit, barring plaintiff’s claim.