Worry and Woe for Wage Act Defendants: The Broad Reach of the Massachusetts Wage Act

The United States District Court for the District of Massachusetts recently issued a favorable decision for remote employees seeking to invoke the protections of the Massachusetts Wage Act. The Wage Act is a generous statute for employees that provides for treble damages as liquidated damages for any lost wages, as well as attorney’s fees, costs, and interest if damages are proven.

Case Background
Recently, a corporation sought dismissal of a former employee’s Wage Act claims arguing that Massachusetts did not have the most significant relationship to the former employee. The former employer is organized under Delaware law, has offices in Virginia and abroad, and has leadership based in Massachusetts. The former employee was a sales executive who managed accounts nationwide and received commissions.

Notwithstanding the corporation’s contentions that Virginia was the true locus of the former employee’s employment relationship and the former employee’s contacts with Massachusetts were insufficient to invoke the Wage Act, the District Court found that the former employee had adequately pled allegations to survive dismissal by stating that he: (i) communicated regularly with employees located in the Massachusetts office; (ii) traveled to Boston to perform job duties; and (iii) the decisions at issue in the case were made in Massachusetts.

The decision is notable in that the former employee faced several unfavorable facts under the typical jurisdictional analysis, including that the former employee did not live in Massachusetts; did not have supervisors in the Massachusetts office; did not service Massachusetts customers; did not hold himself out to be based in Massachusetts; and neither his compensation plan nor offer of employment provided for the application of Massachusetts law.

Jurisdictional Analysis
The decision appears to be a slight departure from the factors established by the state Appeals Court and affirmed by the First Circuit for jurisdictional analysis, which include the following:

• The state where the employer’s headquarters are located;
• The place the worker performed the work;
• The frequency of interactions between the worker and the employer in Massachusetts;
• Whether another state has a significant connection to the worker and work performance; and
• Whether the employment contract has a choice of law provision.

Takeaways
Remote work has increased choice-of-law disputes and the Wage Act is an attractive statute for employees. Among the many factors for jurisdictional analysis, one factor is arising as most important: the state’s interest in seeing the Wage Act enforced. This is a fact- intensive inquiry but companies should keep in mind that if employees give a reason for Massachusetts judges to apply Massachusetts law, judges likely will.