Rosen Law Office

Can you fire a woman because she’s too attractive? We wouldn’t advise it, but a couple of employers have gotten away with it.

A dentist fired his assistant because he was irresistibly attracted to her. The assistant had worked at his office for ten years, and her work was fine. When she and the doctor began sending texts to each other—which were personal but not romantic—the doctor’s wife got jealous. He fired the assistant to save his marriage, and she sued him for gender discrimination.

The Iowa Supreme Court said it may not have been fair, but it wasn’t discrimination. They held that the decision was based on the dentist’s personal feelings about the assistant, rather than her gender alone. Besides, there weren’t any unwelcome advances, and there was no hostile work environment. As a result, there was no basis for finding that the firing was illegal.

Then there is the famous case of Debrahlee Lorenzana, a 33-year-old banker, who was fired because her figure and style of dress were too distracting to her coworkers. A colleague at Citibank told the Village Voice: “Men are kind of drawn to her. I’ve seen men turn into complete idiots around her. But it’s not her fault that they act this way, and it shouldn’t be her problem.”

Lorenzana pointed out that other coworkers wore heels and fitted business suits, some that were more revealing or “sexy,” but Citibank said their bodies were different. Her figure was just too distracting. Lorenzana’s case went to arbitration, and Citibank has stated that she did not receive any payment.

Now Lauren Elizabeth Odes has filed a gender and religious discrimination suit against her former employer, Native Intimates. After sending her home to change clothes, and directing her to wear a red bathrobe over her outfit, her employer advised her to tape down her breasts to make them appear smaller. She was fired when she went shopping for an outfit that would satisfy her boss.

It’s true that employers can set standards of dress. Allegedly, none of these employees was sexually harassed as the term is generally understood. It is also true that employees-at-will can be fired for any reason or no reason—including a subjective decision on the part of the boss. But it hasn’t escaped us that every one of these stories is about a woman. We have never found a case where a man is told he is too attractive to keep his job.

Women are placed in an impossible position. Can an employer set one dress code for plain women and another for pretty ones? Who decides where the line is between pretty and plain anyway?

These cases caused much debate in our office. Surprisingly, the women felt that the requirement to dress appropriately should not constitute gender discrimination. On the other hand, when one considers the details behind some of these claims, it seems inconceivable that the harassment and termination could be based on anything but gender. In the Lorenzana and particularly the Odes cases, you cannot create a set of facts that would expose a man to the same requirements.

We predict that very soon, one of these cases will end up with a judgment against the boss. The woman isn’t too sexy—the employer is just too biased.

When an employee signs a general release of claims, the hope and expectation is that you will not hear from the employee again. In fact, that is the primary purpose of the release, especially when the employee is compensated in exchange for signing it. However, a recent decision issued by the Massachusetts Supreme Judicial Court offers guidance to employers to ensure when a release of Wage Act claims will be found valid and enforceable in Massachusetts.
In Crocker v. Townsend Oil Company, Inc., Plaintiffs, two former oil delivery truck drivers, claimed that they were owed compensation, including overtime pay, under the Wage Act based on their classification as employees, rather than independent contractors. The employer responded, along with a statute of limitations defense, that a general release contained in a termination agreement signed by plaintiffs barred any Wage Act claims. Though the SJC struggled with its policy to broadly enforce general releases, it disagreed.
The SJC concluded that the general release contained in the contract carrier termination agreement did not explicitly include the release of Wage Act claims. The Court continued that a release of Wage Act claims will be enforceable, only when such an agreement is stated in “clear and unmistakable terms”. Offering further guidance, the SJC stated that the release must be plainly worded and understandable to the average person, and it must specifically refer to the rights and claims under the Wage Act that the employee is waiving. Absent express language that Wage Act claims are being released, a general release is ineffective to waive them.
It is important to note that the SJC also stated that this case only dealt with retrospective release of claims – in other words, claims that existed at the time of the Agreement. This means and the Court strongly suggested that waivers of prospective wage act claims would be void under the Wage Act. This likely is an effort by the SJC to give weight to the Wage Act language that expressly states that employers cannot exempt themselves from obligations under the Wage Act by “special contracts with employees.”
As most employers are aware, damages under the Massachusetts Wage Act, including overtime pay, are automatically trebled. Given the potential risk, it is even more important that employers obtain a valid and enforceable release of Wage Act claims. The decision is an important reminder to employers to make sure they expressly state in plain and understandable language the rights and claims that the employee is waiving under the Wage Act. What constitutes “plain and understandable” and “clear and unmistakable terms” will likely be subject to further interpretation by the courts. In the interim, however, employers should proceed carefully and consult employment counsel if they want assurance that their employee’s release of Wage Act claims will be valid and enforceable.

-Kavita Goyal

In Massachusetts, the validity and enforceability of non-compete agreements is a heavily litigated area of employment law. Non-compete agreements will generally be enforceable when they seek to protect legitimate business interests of the employer such as trade secrets, confidential information, or good will. A non-compete that seeks to prevent ordinary competition is not enforceable. In addition to protecting a legitimate business interest, the agreement generally must also be reasonable as to (a) the amount of time it seeks to be in effect, (b) the scope of what it covers, and (c) the geographic area it encompasses. Courts generally do not like to see that a non-compete agreement is over-reaching in any of these respects. It cannot, in effect, preventing an individual from earning a living.

There are also certain members of industries for whom non-compete agreements are illegal or will be found to be unenforceable. They are the following:
• Doctors
• Lawyers
• Psychiatrists
• Psychologists
• Nurses
• Social Workers
• Radio Broadcast on-air personalities
• Registered Brokers in a publicly traded company
The following are a few basic strategies for employers to help reduce the chances that an employee will challenge the validity of their noncompete agreement after they end their employment and increase the chances it will be upheld if it is challenged:

1. Be Specific

At the beginning of the employment relationship, discuss exactly what the employee’s obligations will be under the non-compete agreement should the relationship end and define any vague or ambiguous terms with the employee and/or his lawyer. When employees fully understand what is expected of them and they are in agreement at the beginning of the employment they are less likely to challenge the agreement’s validity at the end of the relationship. Additionally, should the employee challenge the legality of the non-compete, a specific agreement will more strongly support your position that the interests sought to be protected are legitimate and important as opposed to one that is vague and undefined.

2. Less May be More

Identify which legitimate business interests are truly the most important to your business and narrow the scope of your non-compete agreement to adequately protect just those key interests. Such an agreement will have a much better chance of surviving challenges to its enforceability because a court is less likely to view the agreement as overreaching and thus preventing the former employee from earning a living.

3. One size does not fit all.

Rather than having standard non-compete agreement for all employees, tailor your non-compete to the individual employee or to a class of employees. Execute them on a sliding scale with stricter and broader enforcement for high level executives with significant access to protectable company information to a very narrow, or even no, non-compete agreement for low-level employees with little or no access to confidential information.

-Peter Fisher

People have been asking us whether they are entitled to be paid after a hurricane or other disaster closes their workplace.

Hourly, or nonexempt, employees are paid only for the hours they actually work. If the business is closed during a natural disaster, they do not receive any payment. There are a couple of exceptions. An employee who is on the premises waiting to work—if the power fails, for instance—should be paid. Employees who are on call at or near the business premises may be entitled to payment.

Salaried employees get the same pay no matter how many hours they work in a given week. They are entitled to their full salary for any week in which they perform any work—even if the office is closed for part of the time. However, the employer may require them to use allowed leave—such as vacation or personal days—for this time. If the office is open, but the employee decides not to come to work, this may be considered unpaid leave, or the employee may have to use vacation time. If the exempt employee is only out for part of a day, there should not be any deduction in pay.

I was just thinking about two recent clients who were owed money by owners. One had a contract that was not in compliance with the Massachusetts Home Improvement Contractor Statute and had waited a long time to pursue his money. The other had a contract that fully protected him and contacted me once communication had broken down with the customer. In the first case, my client ended up writing the homeowner a check because he couldn’t face the risk of the multiple damages, attorney’s fees, interest and costs that are available to the homeowner under the Consumer Protection Statute (c. 93A). In the case of the second, I had no qualms about filing a mechanic’s lien and pursuing payment aggressively because my client was in full compliance with state law.

Just as no respectable contractor would work with poor quality tools, contractors and construction companies should make sure that they are working with high-quality legal “tools” that will protect them in the event of a dispute or investigation by regulating authorities.

So, here is a list of the legal tools that should be in your toolbox:

Make sure you have all required registrations for your field. That includes staying up-to-date on developments in the construction arena. Are you familiar with the special licensing required for roofers, windows and siding, demolition, etc. Do you know about the lead law for residential renovation work? Are you aware of the new continuing education requirement for contractors?
Invest in a good contract. The Massachusetts Home Improvement Contractor Statute (142A) has numerous requirements for contracts for home renovation work. However, that contract does not necessarily have clauses that protect you. For example, if you don’t have a provision that allows you to recover your attorney’s fees if you have to pursue payment from a client, you can’t collect. Contracts for new construction are different and should not be the same as your renovation contract. All contractors should have contracts with their subcontractors. I have written on this extensively in other posts.
Use mechanic’s liens. Mechanic’s liens are a great tool for getting paid. However, the deadlines and procedures for filing them are very strict, and if you don’t do it correctly and you miss the deadline, it is usually impossible to fix.
Demand letters. When clients call, they often ask about filing suit when a dispute occurs. However, filing suit should really be the last resort when there is a dispute. A well-written demand letter can frequently resolve a dispute, and is much less expensive and stressful then a full-blown lawsuit.
Your lawyer. Clients should call me before an issue arises. I draft contracts on a flat-fee basis and tell clients to call me (for no additional charge) when they want to delete clauses or add language for a particular job. I want to become familiar with their businesses and act as a trusted advisor. Preventing problems before they occur is much less expensive and stressful and enables you to focus on your business. If a dispute does happen, we will discuss the best way to resolve it. We will consider mediation and arbitration as well as the possibility of filing a lawsuit with your goals in mind.
A true craftsman does not work at a job without the best possible tools. Make sure that you protect your business with the proper legal tools as well.

-Andrea Goldman

Although I have written about mechanic’s liens in the past, the power of a lien cannot be underestimated and bears repeating.  The right to file a lien is a huge advantage for contractors and construction companies, and is a unique tool that helps contractors get paid.  As long as the construction company has a written contract with the owner, it can file a lien on a property within ninety days of the date the it last worked at the project.  If the contractor is a subcontractor, the time for filing is extended to within ninety days of the last date that someone working by and through the general contractor worked at the project.  These deadlines are strict, and if they are missed, then the company can no longer file a valid mechanic’s lien.

A lien consists of two documents; a Notice of Contract and a Statement of Account.  The Notice of Contract may be filed at the Registry of Deeds at the start of a project to put the public on notice that the company is working at the property. The Statement of Account provides the details of the contract price, the amount paid, and the amount still owed.  The lien is a public record that states money is still owed for work on the property.  These two documents constitute the mechanic’s lien.

What does a lien do?  A lien causes a blemish on the title.  What this means is if the owner has a construction loan, or is trying to refinance or sell the property, the bank will not disburse funds until the lien is removed.  Even if a property owner is not trying to currently sell or refinance, most owners hate having a lien on their property.  They are usually extremely motivated to have the lien removed.

There are only three ways to have a lien dissolved.  One is to settle with the general or subcontractor and have them file a Notice of Dissolution of Lien.  The second is to go to court to have the lien removed because the construction company did not follow the proper procedure for “perfecting” or finalizing the lien.  If the lien is filed too late, the company fails to file suit within ninety days of recording the lien, or if the lien fails in some other way, the owner can file suit to have the lien dissolved.  Finally, the owner can purchase a bond to “bond off” the lien, but this is usually a costly remedy.

If a construction company misses the window for filing a lien, it can still move for a real estate attachment, but this requires filing an action with the court, and it must show a “likelihood of success on the merits.”  A mechanic’s lien can be filed by a contractor as of right; a party can only file a real estate attachment if a court grants them the right to do so.  That is why a mechanic’s lien is a tool that cannot be ignored.

Liens can be an incredibly powerful tool when a contractor or construction company is owed money.  However, unlike most legal actions, the contractor may lose his opportunity to record a valid lien if he does not follow the proper procedures.

-Andrea Goldman

Not everyone who works on a public construction project in Massachusetts has to be in a union.  However, to prevent ordinary workers from undercutting the unions, non-union shops have to pay their employees approximately what union workers make.   Prior to the start of any public works project, a list of the jobs which are to be employed on the project is submitted to the Director of the Department of Labor Standards.  The Director then determines a rate of wages for certain classifications of jobs.  The awarding authority is then furnished with a schedule of such wages and updates these wages on a yearly basis until the project is complete.  This higher hourly rate is called the prevailing wage and is mandated by the Massachusetts Prevailing Wage Laws, G.L. c. 149 §27.   

If you are in the construction business, you want to pay your workers what the law requires.  A basic understanding how workers should be classified under a Director’s schedule of wages is therefore extremely important.   Failure to correctly classify workers can expose employers to significant fines and expensive lawsuits.  A worker who is not paid the appropriate prevailing wage has the statutory right to bring a lawsuit in his or her own name after initially filing a complaint with the Attorney General.  If successful, the employee is entitled to mandatory treble damages for any lost wages, even if it is the employer’s first offense and/or even if the employer’s violation was unintentional. 

For the most part workers will fall neatly under one of the enumerated categories of jobs on the director’s schedule of wages; however, some workers, despite their job title, perform duties which make it difficult to determine whether or not they should be paid the higher prevailing wage.  For example, workers who deliver materials which are not used in road construction do not generally fall under one of the Director’s classifications.  However, when those same workers are in some way “engaged in construction activity” in connection with a public works project, then regardless of their job title, they may be entitled to the prevailing wage.

While there is no bright line rule for an employer to know whether an employee is “engaged in construction activity,” courts have interpreted this phrase as requiring that there be a “significant nexus between the employee’s work and the site of the construction project.”   In other words, regardless of what your employee’s job title may be, an employer should always ask: What exactly is my worker required do at the public works site?   If your employee is required to perform any type of labor on site or in connection with the construction project, that employee should most likely be paid the prevailing wage.   The Department of Labor Standards publishes annual topical outlines which are useful to employers seeking guidance on specific worker classifications. The most recent can be found at http://www.mass.gov/lwd/docs/dos/prevaling-wage/interim-topical-outline.pdf 

-Peter Fisher

Most businesses that handle “personal information” of Massachusetts’ residents (i.e., a resident’s name and financial information, such as driver’s license, credit card number or social security number) must satisfy additional requirements of the Massachusetts data security regulations (201 CMR 17:00, et seq.) by March 1, 2012.  The regulations, which took effect March 1, 2010, require businesses to have adequate protections in place to ensure that such personal information is not disclosed or used in an unauthorized manner.

Businesses must take further steps to comply with the regulations by ensuring that their service providers are also in compliance by March 1, 2012.  Specifically, such businesses must have investigated the adequacy and appropriateness of service providers’ data security policies and practices.  In addition, they must have contracts in place which demonstrate that they are in compliance with the regulations. Service providers may include office cleaning services, payroll companies, internet servers or host providers, or billing companies, as well as others.

Companies affected by this law should check their contracts with their service providers to determine whether the contracts comply with the regulations.  If not, such contracts should be amended as soon as possible.  Simply receiving a letter from your services providers stating that they are in compliance is not sufficient.  It is advisable that the contracts with service providers include additional language to protect your business, such as the following:

• Include language allowing you the right to audit the service provider’s compliance with the regulations.
• Require the service provider to inform you of any breach of the regulations
• Include a clause that requires your provider to indemnify (pay you back) if a claim is made against you as a result of their actions.
• State that they must return or destroy personal information upon contract termination.

Employers must be sensitive to the emotional reactions of employees when they have been fired.  An employee who realizes he may have played a part in his separation will respond differently from an employee who comes to the conclusion that he was discriminated against or fired illegally. There are steps an employer can take to prevent claims for unlawful termination.

When an employee is terminated for unsatisfactory performance, it should come as no surprise.  Unless the performance is egregious, the employee should be notified that his performance must be improved, with guidance as to how to reach specific goals.  This is not a legal requirement, but in most cases, it is more efficient to help an employee correct mistakes rather than replace him.  A better atmosphere in the workplace is created generally, and the employee has been warned if there needs to be a termination later on.

One rule is to always document discussions regarding opportunities for improvement. These interactions should be noted in the personnel file shortly thereafter to have a record of what was said.  It’s a good idea to have the employee sign the written document to show he has received it, and he should definitely receive a copy.

Be consistent. Think about chances you have given other employees to improve and why.  Make sure you provide those same opportunities to employees in similar situations and carry through.  Do not tell an employee that he has ninety days to improve, and then terminate him less than one month later.  Be careful not to create the impression that the employee cannot be fired during the probationary period.  Nothing in these conversations should be construed to change the at-will relationship.  Train your managers so that they are aware of how to deal with performance issues with their staff. Your managers represent the company and are the direct communicators with the employee.   For that reason, they should be given guidelines as to how to deal with problematic employees.

If it feels wrong, it probably is.  Place yourself in the employee’s shoes.  How would you react if you were told you were being terminated?  If you would be surprised, then more steps should be taken before you fire the employee.  Finally, seek legal advice before taking action.  If you are uncertain about the legality of the termination, it makes sense to talk to someone who deals with these situations every day.

–Kavita Goyal

Internet use by employees is a hot topic for most employers.  In addition to the issue of access during work hours, companies face the use of their name in employee blog posts, tweets, Facebook and LinkedIn.  They need to be able to control the content and timing of messages so that proprietary information is not revealed and their image is not damaged.  At the same time, they do not want to interfere with an employee’s first amendment rights.  Even well-meant postings can be damaging.

The purpose of a social media policy is to put the employee on notice as to the employer’s expectations with regard to Internet use.  The employee should know that the policy will be modified as technology develops and changes.  Clear cut guidelines help to prevent misunderstandings and serve to protect the employer. They provide a basis for termination if it is ultimately necessary.

Companies vary widely in their policies regarding employee involvement in the Internet, but one thing is certain:  it is better to put your employees on notice regarding your social media policy rather than facing an unforeseen problem and dealing with it after it occurs.

Employees must first understand that they do not have any right to privacy on their computers at work.  Whatever they write can and may be reviewed by the company.  They are never allowed to reveal confidential or proprietary information.  In addition, they should know the company standards with regard to use of its name.  Some may require prior approval before an employee posts any information regarding the company.  In others, the employer may simply require that the employee state that any posting represents his own views and not that of the employer.  Employees should only write about areas within their control or areas of expertise and should make clear what their position is at their company.  They should keep abreast of company guidelines for using blogs, Twitter, Facebook or LinkedIn.

Workers may never use the internet to make discriminatory or offensive statements about someone.  They should not post political opinions or religious beliefs in the name of their employer.  Pretending to post in the name of another employee should serve as an immediate ground for termination.  Online behavior must reflect the company’s standards and values.

–Andrea Goldman