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An Interest in Interest: Adam Shafran and Jonathon Friedmann Appear Before the Massachusetts Supreme Judicial Court

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by Adam J. Shafran

In February of 2017 Adam Shafran and Jonathon Friedmann appeared before the Massachusetts Supreme Judicial Court on behalf of over 200 employees from two of the nation’s largest environmental maintenance companies to argue an issue of first impression.

In July of 2008, the Massachusetts Legislature amended the enforcement provision of the Massachusetts Wage Act (M.G.L. c. 149, § 150) to make an award of triple damages mandatory whenever an employer commits a wage violation. Prior to the amendment, an award of multiple/triple damages was left to the judge’s discretion and were only awarded when the employer acted with reckless indifference or intentionally committed a wage violation. While an award of multiple damages was discretionary prior to the amendment, it was commonly accepted that an aggrieved employee was entitled to recover prejudgment interest at a rate of one percent per month on all unpaid wages regardless of whether he or she received an award of multiple damages.

Two Massachusetts laws, M.G.L. c. 231, § 6B and 6C, make an award of prejudgment interest at a rate of one percent per month mandatory in nearly all cases in which monetary damages are awarded in a Massachusetts State Court (6B awards interest in cases that are based in tort and 6C awards interest in cases that are based in contract). In Attorney Shafran and Friedmann’s case, the Massachusetts Supreme Judicial Court will answer the following question of law:

Is prejudgment interest pursuant to M.G.L. c. 231, § 6B or 6C available under Massachusetts law when mandatory triple damages are awarded pursuant to M.G.L. c. 149, § 150 (the Massachusetts Wage Act enforcement provision)?

The defendant company intends to argue that the Massachusetts Legislature’s 2008 decision to make an award of triple damages mandatory was intended to serve as a comprehensive remedy for an employee who does not get paid his or her wages, thereby displacing the employee’s right to recover prejudgment interest in addition to treble damages. Attorneys Shafran and Friedmann intend to argue that when the Massachusetts Legislature decided to impose mandatory triple damages, it did so to strengthen the wage rights of employees, and did not intend to preclude employees from recovering prejudgment interest (on their single damages) in addition to an award of mandatory triple damages. Indeed, because there is no dispute that prior to the 2008 amendment an employee could recover prejudgment interest (on his or her single damages) as well as a discretionary award of triple damages, to hold that an employee can now not recover prejudgment interest would have the unintended effect of reducing the amount of damages awarded when the employer’s conduct is the most egregious.

Ultimately, the decision by the Supreme Judicial Court may have major financial implications in unpaid wage cases. Prejudgment interest at a rate of one percent a month can amount to a significant sum of money in matters that are litigated for long periods of time. Rudolph Friedmann will keep you updated on this interesting and important issue.