Wage Wars – The Rising Tide of Massachusetts Wage & Hour Litigation

By Adam J. Shafran, Esq.

Bolstered by a wage statute that provides for mandatory triple damages and attorneys’ fees, the Commonwealth of Massachusetts continues to be a hotbed for both individual and class action wage and hour lawsuits. In addition to harsh statutory penalties, recent decisions by the Massachusetts Supreme Judicial Court (“SJC”) all but ensure that this trend will continue.

Administrative Exhaustion Requirement is No More

Section 150 of the Massachusetts Wage Act sets forth the process for an employee bringing a claim of unpaid wages. The statute states in relevant part, “an employee may, 90 days after filing of a complaint with the attorney general, or sooner if the attorney general assents in writing,. . . institute and prosecute . . . a civil action . . .” This statute had long be interpreted to require an employee to exhaust his/her administrative remedies by filing a complaint with and receiving authorization to sue from the Massachusetts Attorney General’s Office (“AG”) prior to bringing a private lawsuit for unpaid wages. In Depianti v. Jan-Pro Franchising Int’l, Inc., 465 Mass, 607 (2013), the SJC reversed this requirement. The Court noted that although the Wage Act “requires” an employee to file a complaint with the AG before filing a lawsuit, the “requirement” was merely “intended . . . to ensure that the Attorney General receives notice of the alleged violation…” Id. at 612. Going forward, the Court held that the notice requirement is met so long as the AG’s office is informed of the allegations at any point during the pendency of the lawsuit. In practice this means that employees can immediately file suit for unpaid wages against employers and no longer need to obtain an “authorization to sue letter” from the AG prior to doing so.

Statute of Limitations Extended

Massachusetts overtime law requires employers to pay time and a half the regular rate for all hours worked by an employee over 40 in a week. Despite a limited two year statute of limitations for overtime claims, the SIC recently permitted recovery for a third year pursuant to the Massachusetts Wage Act. Crocker v. Townsend Oil Co., Inc., 464 Mass. 1 (2012). Although the SJC did not permit recovery of the overtime premium beyond two years, the Court allowed recovery for unpaid overtime hours at the employee’s straight time rate for an additional third year. Id. at 7. In practice this means that employees can still only recover the time and half overtime premium for the two years preceding the filing of a complaint, but can now recover unpaid straight time wages for all hours worked over 40 in a week for an additional third year.

Common Law

Claims for Unpaid Wages

After many years of conflicting lower court decisions, the SJC finally addressed the issue of whether the Wage Act is the exclusive means for an employee to recover unpaid wages. Lipsitt v. Plaud, 466 Mass. 240 (2013), In Lipsitt, the SJC rejected the defendant’s argument that the Wage Act was intended to be the exclusive remedy for unpaid wage claims, and held that common law claims to recover unpaid wages such as breach of contract and unjust enrichment are not preempted by the Wage Act. Id. at 247. Although plaintiffs cannot recover treble damages and attorneys’ fees under common law claims, the holding is significant because it allows employees to go back as far as six years to recover any unpaid wages.

The impact of these cases is yet to be seen, but employers of all sizes should consistently review their wage practices to be sure they do not find themselves subject to a wage and hour lawsuit and the harsh provisions of the Massachusetts Wage Act.