Rosen Law Office

All our client wanted to do was keep the Haverhill School Department from being sued.

Our client was a member of the school committee.  In a private email message, she urged her colleagues on the committee not to discuss personnel matters in open session.  She pointed out that, years before, the school superintendent had said that a track coach got an unfavorable evaluation and the city got sued.   Here’s what the email said:

“I want to tell you about a risk we take in discussing this in public.  Before I was on the [School Committee, the track coach’s] performance was discussed publicly by SC members and the SC was sued.  It was not a lengthy discussion, it was just a mention that she did something the former Athletic Director didn’t like and the [High School] did not want to re-sign her contract…. If we even mention names of employees who may or may not have done something wrong, we could be sued again and would likely lose….  If we discuss this in public, names should not be used….”

It was good advice, but somehow the newspaper got a copy of the email and reprinted it.  The former track coach saw her name in the paper and sued the city again, naming our client as a codefendant.

The coach later said she wanted people to know about the former lawsuit: that she considered it “a fight for every employee in the City of Haverhill.”  She wanted to ensure public officials complied with their obligations under the law with respect to employee privacy.

But our client agreed with her!  Message received.  Our client was trying to protect the privacy of school employees.  So it was strange that the coach found the message offensive.

The Superior Court dismissed the lawsuit.  First, the Court did not feel that a private email communication to other school committee members was a statement to a third party, as is required for a defamation claim.  Essentially, the City made the statement to itself.

“Second, the court concludes there is nothing in the Email that is ‘reasonably susceptible … to a defamatory meaning,’” the judge wrote.  “The court fails to see how, in the circumstances of this case, the Email in any way discredits [the coach].  The Email makes no statement that would subject [the coach] to ‘hatred, ridicule … [or] contempt.’”

Caputo v. City of Haverhill, ESCV2008-02492.

A Costco employee had an eyebrow piercing that violated the company’s dress code. Management told her to cover it with a Band-Aid while she was working. This she refused to do. She explained that, as a member of the Church of Body Modification (“CBM”), she had to be a confident role model, proudly displaying her eyebrow jewelry at all times. Members of the CBM believe that–through rituals like piercing, scarring, tattooing and suspension—they strengthen the connection between their bodies, minds, and souls.

Costco fired her, and she sued. The First Circuit held that Costco would suffer undue hardship if it allowed the employee to display her face jewelry. “Courts have long recognized the importance of personal appearance regulations, even in the face of Title VII challenges.” By allowing an exemption from the dress code, “Costco forfeits its ability to mandate compliance and thus loses control over its public image.”

This was a closer case than one might think. Initially, the Equal Employment Opportunity Commission determined that Costco had violated the employee’s civil rights. And this case may have turned on the fact that Costco was more reasonable in offering accommodations than the plaintiff was in refusing them.

It was a different matter when a high school freshman insisted that her membership in the CBM trumped the school’s dress code. She insisted on keeping her nose stud and got suspended. The federal district court for North Carolina granted an injunction against the enforcement of the dress code. If the student were not permitted to practice her religious beliefs, she would suffer greater harm than the school would, if it relaxed its dress code. The school ultimately abandoned its appeal and paid the plaintiff’s legal fees.

Neither courts nor employers are in a good position to determine whether a religious belief is sincere or not. When an employee complains that a neutral rule is infringing on her religious beliefs, wise employers will make a serious effort to reconcile those beliefs with the legitimate requirements of the business.

Are retirement deductions “wages”?

In Massachusetts, an employer who fails to pay wages within six days after the end of the pay period is liable for treble damages and attorneys’ fees. But what about payroll deductions that are supposed to go into a retirement account?  Does an employer get penalized for failing to invest them as directed?

In our case, yes.

A large Boston real estate company deducted wages from our client’s pay, stating that they were being invested in the employee’s retirement account.  The employee became curious when he wasn’t getting any account statements.  He repeatedly asked the employer about it but never got an answer.  Two years later, when he quit, the employer admitted it had never deposited the money.  Our client sued under the state’s Wage Act.

The employer took the position that payroll deductions weren’t wages, citing a case in which the City of Boston took longer than six days to invest patrolmen’s wages in their accounts.  But this was a special kind of retirement account in which municipalities own the funds until the employee is entitled to them.  In the usual case, the funds belong to the employee.

Besides, the Court said, the retirement account was never created.  “It defies logic to rely upon what was supposed to occur, but did not, as a basis for exoneration from the strict requirements of the Wage Act.”  Pacheco v. H.N. Gorin, et al., MICV2009-01946.

Photo: Orin Zebest

OK, it’s only a trivia competition.  But our team, Addicted to Law, took top honors at the charity tournament for the Haverhill Foundation for Excellence in Education on May 7, 2011.  The foundation provides funding for equipment and programs in the Haverhill public schools. 

Bottom row: Esther Rosen, Rachel Moynihan, Rick Moynihan, Andy Hart, Alexa Hart. Top Row: Jerry O'Connor, Joel Rosen.

Frivolous cases are just part of the cost of doing business for most employers, but occasionally a judge will punish a lawyer who has gone too far.  A Verizon tech got high and smashed a company truck into a Jersey barrier.  When he was fired, he filed a workers’ compensation claim, both for his injuries and for the emotional distress the poor fellow had suffered.

The claim was denied.  He appealed—lost.   A further appeal—lost.  A new worker’s compensation case—dismissed.  Then a civil case—which was completely groundless.  Worker’s compensation is an absolute bar to personal injury lawsuits like this one, the Court observed.

In dismissing the civil case, a federal judge ordered the lawyer to pay Verizon $35,000 in attorneys’ fees, because he had “blindly forged ahead for a third pass.”  While the lawyer said he was just being a zealous advocate, the court disagreed. “[T]here is a point beyond which zeal becomes vexation, the ‘novel’ approach to a legal issue converts to frivolity and steadfast adherence to a position transforms to obdurateness. Here,  [the plaintiff’s attorney’s] judgment was clouded by [his] excessive zeal to the point that [his] performance became unlawyerly.”  McCarthy v. Verizon New England, Inc., Mass. (Stearns, J.) (USDC) (Civil Action No. 09-10991-RGS) (March 25, 2011)., quoting, Cruz v. Savage, 896 F.2d 626, 634 (1st Cir. 1990).

Massachusetts appears ready to pass a bill that will prevent discrimination on the basis of gender identity.  Basically, wherever a statute bars discrimination against people on the basis of sex or sexual orientation, the new bill adds the words, “gender identity or expression.”   That term means “a gender-related identity, appearance, expression, or behavior of an individual, regardless of the individual’s physiology or assigned sex at birth.”

According to the Mass. Transgender Political Coalition, the bill is necessary because transgender people in Massachusetts frequently encounter unequal treatment in employment, schools, housing, public accommodations, and access to healthcare.  They also report high incidences of violence and harassment.  The coalition cites a survey in which transgender respondents say they: experience unemployment at twice the rate of the population as a whole; are almost universally harassed on the job; are likely to be fired; and have disproportionately high rates of poverty.

The bill is at the Joint Committee on the Judiciary.   About a hundred legislators have signed on, and the governor has already signed an executive order preventing state government and contractors from discriminating.   If Massachusetts outlaws transgender discrimination, it will be the fourteenth state to do so.

In answer to the inevitable question about bathrooms, the bill entitles people to “the full enjoyment of such facilities … consistent with their gender identity or expression.”  That is, men who appear to be women will use the ladies’ room.

Our client renovated his apartment buildings to provide housing for homeless families.  Rather than living from day to day in a welfare motel, each family got its own apartment—a stable address where they could cook their own meals and get training in the skills they needed to find work and eventually move on to market-rate housing.

The concept is new.  There’s no ready-made funding source.  The money came from the state’s program for homeless shelters.  And that’s where the trouble began.

A landlord, who owned other apartments on the street, demanded that the city shut the buildings down.  The zoning in that area permits apartments like his, he argued.  But shelters need a special permit.  Since this new program was being funded with shelter money, it must be a shelter.

The zoning board of appeals didn’t see it that way, and the landlord took his case to court.    We argued that the case should be dismissed, because the landlord lacked standing.

Not everyone has standing to challenge a zoning decision.  It has to be a person who suffers unique harm that the zoning scheme was designed to prevent.   The landlord said he could not rent his apartments because no one wanted to live next to a homeless shelter.

The Superior Court judge asked, “He doesn’t object to the way the building is used, correct?  He objects to the people using it.”

The decision in our favor rested on standing.  Yes, the landlord’s apartments had been vacant for some time.  But it was also true that he didn’t advertise them or put out signs.  The landlord could not provide the name of a single tenant who moved out or declined to rent an apartment because of the program next door.  He had not demonstrated that our client’s building had caused the loss of rent.

The case was dismissed, and the landlord appealed. Here’s what the Appeals Court said:

“The record does not demonstrate that the locus caused the plaintiff to lose tenants or rental income. The plaintiff’s unsubstantiated personal opinions, vague sentiments attributed to unidentified tenants and would-be tenants, and statements of lost income with no record-supported causal link to the operation of the locus are not enough to establish injury of the sort required to support standing.”

Foster v. Zoning Bd. of Appeals, 2011 Mass. App. Unpub. LEXIS 217 (Mass. App. Ct. Feb. 18, 2011)

Photo: Steve Snodgrass

A new case restricts an employer’s ability to make deductions from an employee’s wages, even when the employee agrees. 

When employees of the ABC Disposal Service (yes, that’s the real name) were at fault in an accident, the company gave them a choice.  They could be disciplined, or they could pay for the damage.  A safety officer conducted a thorough review of the accident record and presented findings to the safety manager.  If the safety manager decided that the damage resulted from a preventable accident, he would present the two options to the employee.  If the employee chose to pay, instead of being disciplined, ABC would set up a repayment schedule with modest weekly deductions.  ABC never reduced the employee’s wages below the minimum wage.

Under Massachusetts law, employers are permitted to deduct for “a clear and established debt.”  They can’t enter into a special contract to withhold wages.  That’s exactly what ABC was doing here.  Besides, the process was one-sided.  ABC had the discretion to decide whether the employee was liable. 

As the Court said, “An arrangement whereby ABC serves as the sole arbiter, making a unilateral assessment of liability as well as amount of damages with no role for an independent decision maker, much less a court, and, apparently, not even an opportunity for an employee to challenge the result within the company, does not amount to ‘a clear and established debt owed to the employer by the employee.’”

The employer can dock wages only in a few situations.  These include: (1) an undisputed loan or wage advance (or a mistaken overpayment ); (2) employee theft or misappropriation established through an independent proceeding with due process protections; and (3) an employer’s judgment against the employee for the value of the employer’s property.  

While there may be other exceptions–for example, a deduction permitted under a union contract–the employer withholds wages at his peril.

If you choose to do business with a company, you usually can’t sue the owner personally.  You’re allowed to go behind the corporation, or “pierce the corporate veil,” only under rare, particular circumstances, for example, when you have been misled.

Our client (“the Owner”) set up a subsidiary (“Parking”) to lease several hundred spaces in a parking garage owned by a regional transit authority.  When the parties couldn’t agree about Parking’s share of the expenses of the garage, the Authority sued.

Because Parking had no assets other than the lease, the Authority sued the Owner as well.  We won the case on summary judgment and prevailed on appeal.  The Court said:

“There was no basis for the judge to disregard Parking’s corporate veil. The Authority essentially argues that Parking is merely a paper company, controlled in all aspects by [the Owner].  Although this is apparently true, ‘control, even pervasive control, without more, is not a sufficient basis for a court to ignore corporate formalities.’… As noted by the judge in his findings, both parties were represented by sophisticated counsel during the negotiations of the purchase and sale agreement.  During this time, the Authority was made well-aware of Parking’s recent formation and its status as a limited liability corporation.  The Authority made no request to have [the Owner] guaranty Parking’s lease obligations. Most importantly, neither [the Owner] nor Parking made any type of misrepresentation during the course of the negotiations. Simply put, the Authority failed to present sufficient proof as to any fraud or “dubious manipulation or contrivance” on the part of the defendants. Consequently, we conclude that this case does not present a “rare situation” warranting the piercing of a corporate veil. Merrimack Valley Reg’l Transit Auth. v. Wood Mill Parking, Inc., 2011 Mass. App. Unpub. LEXIS 179, 4-5 (Mass. App. Ct. Feb. 11, 2011)