Employee Discipline: Massachusetts
Federal law and guidance on this subject should be reviewed together with this section.
Authors: Lisa Stephanian Burton and Peter J. Mee, Morgan, Lewis & Bockius LLP
- The Massachusetts Fair Employment Practices Law prohibits discrimination based on multiple categories. See Massachusetts Fair Employment Practices Law.
- Massachusetts prohibits retaliation against employees who disclose or threaten to disclose certain violations of law. See Protection from Retaliation for Whistleblowers.
- Massachusetts prohibits an employer from disciplining an employee for exercising his or her rights under leave of absence laws. See Employee Leaves.
- Employers may not administer lie detector tests except to aid law enforcement agencies in criminal investigations. See Lie Detector Tests.
- Employers must be mindful of privacy laws when regulating off-duty conduct. See Off-Duty Conduct.
- Massachusetts law provides for certain recordkeeping requirements that may affect disciplinary matters. See Recordkeeping Requirements.
- Massachusetts recognizes the claim of false imprisonment. See False Imprisonment.
- Massachusetts requires employers to post a number of notices. See Required Postings.
- Private employers are not restricted in the same way as government employers when conducting workplace searches. See Employee Privacy, Searches and Surveillance.
- Massachusetts is a two-party consent state with regard to recording conversations. See Wiretapping and Recording Conversations.
- Massachusetts courts will enforce noncompetition agreements. See Protection of Intellectual Property - Noncompete Agreements.
- Massachusetts employers may not deduct from an employee's paycheck to compensate for damages or breakages in lieu of discipline. See Deductions from Wages.
Massachusetts Fair Employment Practices Law
Massachusetts employers must be aware of the Fair Employment Practices Law ("Fair Employment Law"). +ALM GL ch. 151B, § 1 (§§ 1 to 10).
The Fair Employment Law prohibits discrimination in employment based on the following protected categories:
- Religious creed;
- Physical or mental handicap;
- National origin;
- Gender identity;
- Sexual orientation;
- Genetic information;
- Veteran status;
- Ancestry; and
The Fair Employment Law prohibits discrimination in compensation or in terms, conditions or privileges of employment.
Employee discipline affects terms and conditions of employment.
The Fair Employment Law applies to most employers with over six employees. Religious organizations, social and fraternal clubs receive certain exclusions.
In addition, employers with fewer than six employees also can face common-law, or nonstatutory law, discrimination claims.
Damages available under the Fair Employment Law include the following:
- Lost wages and benefits;
- Emotional distress damages;
- Compensatory damages for lost earning capacity;
- Attorney fees; and
- Punitive damages.
Employers must be aware that they cannot treat employees in protected classes differently by disciplining them more often or more seriously than those in unprotected classes.
The Massachusetts Supreme Judicial Court has held that the Fair Employment Law covers claims for "associational" discrimination for family members receiving costly treatments of a disability. Flagg v. Alimed, Inc., +466 Mass. 23 (2013). Associational discrimination occurs when an employer discriminates against an employee not due to his or her own protected status, but that of a family member.
Such action violates the Fair Employment Law and subjects an employer to liability and potential damages.
Several Massachusetts municipalities also have enacted ordinances prohibiting discrimination in employment similar to the Fair Employment Law. See EEO - Discrimination: Massachusetts.
Act to Establish Pay Equity
Massachusetts has enacted the Act to Establish Pay Equity, amending and strengthening its equal pay law. EEO - Discrimination: Massachusetts. The law prohibits Massachusetts employers from discriminating between genders with respect to payment of wages and other compensation for work that is comparable (not the same) and addresses additional issues, including:
- Affirmative defenses (including a self-audit and evaluation);
- Pay secrecy and wage transparency;
- Damages; and
- Notice-posting requirements.
The law's notable features include:
- An expanded definition of the term "comparable work," used to benchmark gender-neutral salary levels;
- A prohibition on policies that disallow employees from discussing salary information;
- Elimination of employer's ability to ask job applicants for previous salaries; and
- A liquidated damages provision above lost wages for violations.
With respect to discipline, an employer may not require, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee's own wages, or about any other employee's wages. The law does not require an employer to disclose an employee's wages to another employee or a third party.
In addition, an employer may not discharge or in any other manner retaliate against any employee because the employee:
- Opposed any act or practice that is unlawful;
- Made or indicated an intent to make a complaint or has otherwise instituted any related proceeding;
- Testified or is about to testify, assist or participate in any manner in an investigation or proceeding; or
- Disclosed the employee's wages or has inquired about or discussed the wages of any other employee.
The law prohibits an employer from contracting with an employee to avoid complying with the Act's provisions. However, an employer may prohibit an HR employee, supervisor or any other employee whose job responsibilities require or allow access to other employees' compensation information, from disclosing such information without prior written consent from the employee whose information is sought or requested, unless the compensation information is a public record.
Most employers should already be operating with a spirit of gender pay equality, but this law mandates a higher level of scrutiny. Human Resource departments should steer supervisors and managers toward best practices that comply with the equal pay law. For example, managers must phase out questions about previous salaries. A proactive approach avoids the risk of lawsuits or regulatory enforcement.
Pregnant Workers Fairness Act
Massachusetts has passed its Pregnant Workers Fairness Act, which prohibits employers from denying pregnant employees reasonable accommodations for pregnancy- and childbirth-related conditions, absent due hardship. +2017 Bill Text MA H.B. 3816, creating ALM GL ch. 151B, § 4.1E; see Disabilities (ADA): Massachusetts. The Act contains retaliation protections.
Specifically, the Act prohibits an employer from a number of activities, including:
- Taking adverse action against an employee who requests or uses a reasonable accommodation, including by failing to reinstate the employee to her original or an equivalent position when the need for the reasonable accommodation ceases;
- Denying an employment opportunity based on a pregnancy-related condition;
- Requiring an employee to accept an accommodation that she chooses not to accept, if the accommodation is unnecessary; or
- Requiring an employee to take leave if another reasonable accommodation may be provided.
Reasonable accommodations may include:
- More frequent or longer paid or unpaid breaks;
- Time off to recover from childbirth with or without pay;
- Acquisition or modification of equipment or seating;
- Temporary transfer to a less strenuous or hazardous position;
- Job restructuring;
- Light duty;
- Break time and private non-bathroom space for expressing breast milk;
- Assistance with manual labor; or
- Modified work schedules.
Protection from Retaliation for Whistleblowers
Massachusetts provides statutory protection for whistleblowers in limited contexts.
Along with False Claims Acts, state laws protect whistleblowers in certain specific industries. See Future Developments.
False Claims Act
In Massachusetts, employers are prohibited from the following actions:
- Making, adopting or enforcing any rule, regulation or policy preventing an employee from disclosing information to a government or law enforcement agency; or
- Making, adopting or enforcing any rule, regulation or policy preventing an employee from acting to further a false claims action, including investigating, initiating, testifying or assisting in an action filed pursuant to the False Claims Act.
At any stage of the employment relationship, employers cannot require that employees agree to or sign an agreement limiting or denying their rights to bring an action or provide information to a government or law enforcement agency.
Any such agreement is void.
It is also unlawful for an employer to retaliate against an employee because the employee has lawfully disclosed information to a government or law enforcement agency, or has furthered a false claims action.
Retaliatory employment actions include:
- Harassment; or
- Denial of promotion.
Massachusetts law prohibits state employers from retaliating against employees for whistleblowing activity. +ALM GL ch. 149, § 185.
Whistleblowing activity includes the following:
- Disclosing or threatening to disclose to a supervisor or a public body information that the employee reasonably believes is a violation of a law, rule or regulation, or which poses a health, safety or environmental risk;
- Providing information to or testifying before a public body investigating violations; or
- Objecting or refusing to participate in activities that the employee reasonably believes to be a violation of a law, rule or regulation, or which pose a health, safety or environmental risk.
This statute includes a notice requirement for employees.
Before filing a complaint with a public body, an employee must first notify, in writing, his or her supervisor of a suspected violation, and allow the employer a reasonable opportunity to correct the activity.
However, an employee need not comply with the notice requirement if:
- The supervisor is aware of the activity and the situation constitutes an emergency;
- The employee reasonably fears physical harm for disclosing the violation internally; or
- The employee is providing information or testifying at the request of a public body investigating a violation.
Employers are required to post notices regarding the employee protections under this section. See Employee Management > Employee Communications: Massachusetts.
An employee may not be penalized by an employer in any way as a result of the employee's filing of a complaint or providing notice to the Department of Labor Standards in regard to the occupational health and safety of the employee or other workers engaged in the use, handling, removal or disposal of asbestos or materials containing asbestos. +ALM GL ch. 149, § 6D; +ALM GL ch. 149, § 6F.
A health care facility may not refuse to hire, terminate a contractual agreement with, or take retaliatory action against a health care provider because the health care provider does any of the following:
- Discloses or threatens to disclose to a manager or to a public body an activity, policy or practice of the health care facility or of another health care facility with whom the health care facility has a business relationship, that the health care provider reasonably believes violates a law, rule, regulation or professional standard of practice which the health care provider reasonably believes poses a risk to public health;
- Provides information to or testifies before a public body conducting an investigation, hearing or inquiry into a violation of a law, rule, regulation or the activity, policy or professional standards of practice, which the health care provider reasonably believes poses a risk to public health;
- Objects to or refuses to participate in any activity, policy or practice of the health care facility, or of another health care facility with which the health care facility has a business relationship, which he or she believes violates a law, rule, regulation or professional standards of practice which the health care provider reasonably believes poses a risk to public health; or
- Participates in a committee or peer review process, or files a report, complaint or incident report discussing allegations of unsafe, dangerous or potentially dangerous care.
The protection against retaliatory action does not apply unless the reporting health care provider has brought his or her claims to the attention of a supervisor by written notice and has afforded the health care facility a reasonable opportunity to correct the activity, policy or practice.
Prior written notice is not required when the health care provider:
- Is reasonably certain that the activity, policy or practice is known to one or more managers of the health care facility and the situation is emergent in nature;
- Reasonably fears physical harm as a result of the disclosure; or
- Makes the disclosure to a public body for the purpose of providing evidence of what the health care provider reasonably believes to be a crime.
Elder Care Providers
A long-term care facility or other entity is prohibited from retaliating against an employee who in good faith files a complaint with, or provides information to the following entities:
- State long-term care ombudsman, or his or her designees;
- Any certified local ombudsman; or
- The Department of Elder Affairs.
Care Providers for Persons with Disabilities
Massachusetts prohibits employers from discharging, disciplining, threatening or discriminating against an employee for filing a report with the Disabled Persons Protection Commission or testifying in a commission proceeding, or for providing information to the following entities in the course of an investigation of alleged abuse of a person with disabilities:
- Disabled Persons Protection Commission;
- The general counsel or the secretary of health and human services;
- The department of mental health;
- The department of public health; or
- Any department within the executive office of health and human services.
Child Care Providers
An employer of an employee required to report or provide information about suspected child abuse or neglect is prohibited from discharging or in any manner discriminating or retaliating against the employee for making such a report or providing such information.
The employee must provide any information in good faith.
In addition, the employer may not discriminate or retaliate against an employee because he or she testifies or is about to testify in any proceeding involving child abuse or neglect.
Persons required by law to report suspected child abuse or neglect, including physical, emotional or sexual abuse, include, but are not limited to:
- Medical interns and other hospital personnel;
- Medical examiners;
- Educational administrators;
- Child care workers;
- Social workers;
- Police officers; and
Unfair Employment Practices
Employers may not retaliate against employees for complaining about discriminatory practices. +ALM GL ch. 151B, § 4.
To succeed on a retaliation claim, an employee must prove the following:
- That he or she reasonably and in good faith believed that his or her employer engaged in wrongful discrimination;
- That he or she acted reasonably in response to this belief; and
- That the employer's desire to retaliate against him or her was a determinative factor in the decision to take an adverse employment action.
Abramian v. President & Fellows of Harvard College, +432 Mass. 107, 121 (2000).
Workers' Compensation Retaliation
Employers are prohibited from discharging, refusing to hire or otherwise discriminating against an employee because he or she has filed a workers' compensation claim. +ALM GL ch. 152, § 75B.
Retaliation Based on Participation or Testimony in Unemployment Hearing
An employee providing evidence during unemployment claims proceedings or testimony during an unemployment hearing has strong protections from retaliation. +ALM GL ch. 151A, § 47; +2013 Bill Text MA S.B. 2195. Massachusetts courts assume (i.e., a rebuttable presumption exists) that an employer retaliated against an employee if:
- The employee had participated in an unemployment proceeding or testified at a hearing; and
- The employer either substantially altered the terms of employment or terminated the employee within six months after the employee's participation in the proceeding or hearing.
An employer may defeat the presumption of retaliation by showing, by clear and convincing evidence, that the action was not a reprisal and would have been taken based on other justifications.
Under the law, a court could impose the following remedies on an employer found to have engaged in retaliation:
- Rescission of any alterations in the terms of employment;
- Reinstatement of the employee;
- Damages; and
- Costs and attorney fees.
Massachusetts law protects employees from discrimination, discipline or discharge for exercising rights under leave of absence laws. In addition, most leave laws prohibit an employer from coercing, interfering with, restraining or denying the exercise of any employee rights. See Future Developments; Other Leaves: Massachusetts; FMLA: Massachusetts; Jury Duty: Massachusetts.
Retaliation Based on Exercising Paid Sick Leave Rights
As of July 1, 2015, the Massachusetts paid sick leave law prohibits a covered employer from retaliating against an employee for exercising protected rights under the law. See Other Leaves: Massachusetts. Employers with 11 or more employees, both private and public, are covered by the measure.
The law prohibits an employer from:
- Interfering with an employee's exercise of earned sick time rights, for example using the taking of earned sick time as a negative factor in any employment action such as evaluation, promotion, disciplinary action or termination, or otherwise subjecting an employee to discipline for the use of earned sick time;
- Retaliating against an employee for opposing practices that the employee reasonably believes are unlawful under the earned sick time law;
- Retaliating against an employee for exercising rights within the measure. Exercising rights under the law includes:
- Filing an action, or instituting any proceedings under the law;
- Providing or intending to provide any information in connection with any inquiry or proceeding under the law; or
- Testifying or intending to testify in any inquiry or proceeding under the law; and
- Retaliating against an employee for his or her support of another employee's exercise of earned sick time rights.
Examples of adverse actions include:
- Denying use or delaying payment of earned sick time;
- Terminating an employee;
- Taking away work hours;
- Negatively altering the terms or conditions of employment;
- Disciplining an employee under the employer's attendance policy;
- Giving an employee undesirable assignments or schedule changes;
- Giving false negative references for future employment;
- Making false criminal reports to authorities about the employee;
- Reporting an employee to immigration authorities; or
- Threatening an employee with an adverse employment action.
An employer may continue to implement attendance policies that reward employees for good attendance and institute holiday pay incentives that provide extra compensation for coming to work on the days immediately before and after a holiday so long as employees are not subject to any adverse actions for exercising their rights under the earned sick time law. An employee's inability to earn a reward based on his or her absence does not constitute an adverse action for purposes of the earned sick time law.
Lie Detector Tests
An employer may not subject an employee or applicant for employment to, or request him or her to take, a lie detector test. +ALM GL ch. 149, § 19B.
In addition, an employer may not discharge, refuse to hire, demote or otherwise discriminate against a person for asserting his or her rights under this law.
However, this law does not apply to lie detector tests permitted in criminal investigations that are administered by law enforcement agencies. +ALM GL ch. 149, § 19B.
Employers should be mindful that regulation of conduct outside the workplace may violate privacy and antidiscrimination laws.
Employers should discuss any potential policy with counsel.
Massachusetts law addresses an employers' ability to discipline employees for off-duty conduct.
Specifically, a Massachusetts employer may not threaten or attempt to influence an employee:
- To vote or to withhold a vote; or
- To give or withhold a political contribution.
According to a Massachusetts federal court, an employer may prohibit its employees from smoking (even while off-duty), provided that the employer does not violate the Massachusetts Invasion of Privacy statute. See Rodrigues v. EG Sys., +639 F.Supp.2d 131 (D. Mass. 2009).
Federal law continues to prohibit use of marijuana. Marijuana, or cannabis, is scheduled as a Schedule I controlled substance, which means that it has no acceptable medical use. Therefore, an employer:
- Does not have to accommodate marijuana use, including ingestion, possession or intoxication, in the workplace; and
- May take adverse action, including discipline up to and including termination, against an employee who is under the influence of marijuana at work.
Massachusetts law permits the use of marijuana for medical and recreational purposes. However, an employer need not permit or accommodate marijuana use or ingestion in the workplace, or an employee working while under the influence of marijuana.
A Massachusetts employee may have a claim for discrimination based on disability if he or she is unfairly terminated for off-site use of medical marijuana to treat a debilitating medical condition. Barbuto v. Advantage Sales and Marketing, LLC, +477 Mass. 456 (Mass. July 17, 2017). The Barbuto court held that the "fact that the employee's possession of medical marijuana is in violation of Federal law does not make it per se unreasonable as an accommodation." Under Barbuto, an employer should participate in the interactive process to explore whether there was an alternative, equally effective medication that the employee could use.
An employer should continue to follow applicable drug testing and drug-free policies and document any facts that would show impairment while at work, such as those relating to dexterity or appearance.
Massachusetts law provides for certain recordkeeping requirements that may affect disciplinary matters.
To the extent that personnel files are maintained, an employer must include all of the following written information or documents in each employee's personnel file:
- Name, address and birth date;
- Job title and description;
- Rate of pay and any other compensation paid to the employee;
- Starting date of employment;
- Job application, resume or other forms of employment inquiry submitted to the employer by the employee in response to the employer's job advertisement;
- Performance evaluations, including employee evaluation documents;
- Written warnings of substandard performance, and any other documents relating to employee discipline;
- Lists of probationary periods;
- Employee-signed waivers; and
- Copies of dated termination notices.
These requirements apply only to employers with 20 or more employees.
Employers must notify an employee within 10 days of the employer placing in the employee's personnel record any information that has been used or may be used to negatively affect the employee's qualification for the following:
- Transfer; or
- Additional compensation.
Employers must also notify an employee within 10 days of the employer placing in the employee's personnel file any information that may lead to disciplinary action. +ALM GL ch. 149, § 52C.
Massachusetts employers must keep a true and accurate record of each employee's:
- Name and address;
- Amount paid each pay period;
- Hours worked each day and each week; and
- Other information as the commissioner of labor or state attorney general requires.
Records must be kept for at least two years after the date of entry, and must be open and available for inspection and copying by the commissioner or state attorney general, or their representatives.
Massachusetts recognizes the claim of false imprisonment.
It consists of the:
- Intentional; and
- Confinement of a person;
- Directly or indirectly;
- Of which the person confined is conscious or is harmed by such confinement.
In the case of a disciplinary meeting or action with an employee, an employer may be held liable for false imprisonment if the employer or his agent knowingly restrains an employee so as to interfere substantially with the employee's ability to leave the room.
Massachusetts requires employers to post a number of notices, including information regarding wage and hour law, workers' compensation information, unemployment insurance and fair employment practices. See Employee Communications: Massachusetts.
Employee Privacy, Searches and Surveillance
Public employer searches are subject to a balancing test that evaluates both the employer's legitimate business interest and the level of intrusion into the employee's privacy.
Generally, the search of a public employee's office will be justified if there are reasonable grounds for suspecting that the search will reveal evidence that the employee engaged in work-related misconduct, or unlawful conduct while at work, or if the search is necessary for a noninvestigatory work-related purpose.
There are no statutes and little case law dealing expressly with physical searches in the private employment context.
The lawfulness of searches of the offices of private employees would be evaluated under the Massachusetts Privacy Statute and the applicable balancing test.
Courts will test the legality of a search by balancing the employer's interest in conducting the search against the employee's reasonable expectation of privacy in the searched area.
Wiretapping and Recording Conversations
Massachusetts is a two-party consent state for recording conversations.
Therefore, it is generally illegal to record a live conversation between two parties unless both parties consent to the recording.
Massachusetts provides for an exception to this rule for employers monitoring phone calls for legitimate business purposes.
The general rule is that monitoring business calls is widely permissible, while monitoring personal calls made from business phones requires a legitimate business interest.
The Supreme Judicial Court has suggested that employers may record private conversations of employees when they suspect unauthorized telephone use. See O'Sullivan v. NYNEX Corp., +426 Mass. 261, 266 (1997).
Protection of Intellectual Property - Noncompete Agreements
Massachusetts courts will enforce noncompetition agreements provided they are:
- Necessary to protect a legitimate employer interest;
- Reasonably limited in time, subject and space/location; and
- Consistent with public policy.
See Analogic Corp. v. Data Translation, Inc., +371 Mass. 643, 647 (1976); Novelty Bias Binding Co. v. Shevrin, +342 Mass. 714, 716 (1961). Legitimate business interests include trade secrets, confidential business information and good-will.
Massachusetts currently places restrictions on noncompetes for the following professions:
- Broadcasters, +ALM GL ch. 149, § 186;
- Nurses, +ALM GL ch. 112, § 74D;
- Physicians, +ALM GL ch. 112, §12X;
- Social Workers, +ALM GL ch. 112, § 135C; and
- Lawyers, ALM Sup. Jud. Ct. Rule 3:07; ALM Sup. Jud. Ct. Rule 5:6; see Eisenstein v. David G. Conlin, P.C., +444 Mass. 258 (2005); Meehan v. Shaughnessy, +404 Mass. 419, 431-32 (1989).
Massachusetts statutory law regulates the use and enforcement of noncompetition (or noncompete) agreements for employees and independent contractors. See Terms of Employment: Massachusetts; +2017 Mass. HB 4732, adding ALM GL ch. 149, § 24L.
The law applies to any agreements entered into on or after October 1, 2018.
The law defines noncompetition agreement as an agreement between an employer and an employee, or otherwise arising out of an existing or anticipated employment relationship, in which the current or prospective employee agrees that he or she will not engage in certain specified activities that are competitive with his or her employer after the employment relationship has ended. The law covers any forfeiture for competition clauses or agreements.
Noncompetition agreements do not include the following:
- Covenants not to solicit or hire employees of the employer;
- Covenants not to solicit or transact business with customers, clients, or vendors of the employer;
- Agreements in connection with sale of a business;
- Noncompetition agreements outside of an employment relationship;
- Forfeiture agreements;
- Nondisclosure or confidentiality agreements;
- Invention assignment agreements;
- Garden leave clauses;
- Noncompetition agreements made in connection with the cessation of or separation from employment (if the employee is expressly given seven business days to rescind acceptance); or
- Agreements by which an employee agrees to not reapply for employment to the same employer after termination of the employee.
Any covenants excluded under the law will continue to be evaluated under Massachusetts common law.
If an agreement is entered into after commencement of employment, but not in connection with separation from employment, the agreement must:
- Be supported by fair and reasonable consideration independent from the continuation of employment;
- Be in writing;
- Be signed by both the employer and the employee; and
- Expressly state that the employee has the right to consult with counsel prior to signing.
In addition, an employer must provide notice of the agreement at least 10 business days before the agreement is to take effect.
The restricted period (i.e. the period in which an employee may not engage in certain specified activities that are competitive with his or her employer) cannot exceed 12 months from the date of cessation of employment.
The restricted period may not exceed two years from the date of cessation of employment if the employee has:
- Breached his or her fiduciary duty to the employer; or
- Unlawfully taken, physically or electronically, property belonging to the employer.
An agreement must be reasonable in geographic reach in relation to the interests protected. A geographic reach clause is presumptively reasonable if it is limited to only the geographic areas in which the employee, during any time within the preceding two years of employment:
- Provided services; or
- Had a material presence or influence.
An agreement must be no broader than necessary to protect one or more of the following legitimate business interests of the employer:
- The employer's trade secrets;
- The employer's confidential information that otherwise would not qualify as a trade secret; or
- The employer's goodwill.
A noncompetition agreement may be presumed necessary if the legitimate business interest cannot be adequately protected through an alternative restrictive covenant, such as a:
- Nonsolicitation agreement;
- Nondisclosure agreement; or
- Confidentiality agreement.
An agreement must be reasonable in the scope of proscribed activities in relation to the interests protected. A restriction on activities is presumptively reasonable if it:
- Protects a legitimate business interest; and
- Is limited to only the specific types of services provided by the employee at any time during the last two years of employment.
A noncompetition agreement must be supported by a garden leave clause or other mutually agreed upon consideration between the employer and the employee, provided that such consideration is specified in the noncompetition agreement. In order to constitute a garden leave clause within the meaning of this law, the agreement must:
- Provide for the payment of at least 50 percent of the employee's highest annualized base salary paid by the employer within the two years preceding the employee's termination. The payment must be:
- Consistent with the payment-of-wages requirements under +ALM GL ch. 149, § 148; and
- On a pro-rata basis during the entirety of the restricted period; and
- Not permit an employer to unilaterally discontinue, fail, or refuse to make the payments, except in the event of a breach by the employee. However, if the restricted period has been increased beyond 12 months because of the employee's breach of a fiduciary duty to the employer or the employee has unlawfully taken, physically or electronically, property belonging to the employer, the employer is not required to provide payments to the employee during the extension of the restricted period.
Noncompetition agreements will not be enforceable against the following types of workers:
- An employee who is classified as nonexempt under the FLSA;
- Undergraduate and graduate students that partake in an internship or short-term employment relationship with an employer, whether paid or unpaid, while enrolled in a full-time or part-time undergraduate or graduate educational institution;
- Employees who have been terminated without cause or laid off; or
- Employees who are 18 years old or younger.
Massachusetts law does not render void or unenforceable the remainder of the contract or agreement containing the unenforceable noncompetition agreement. In addition, the law does not preclude the imposition of a noncompetition restriction by a court, whether through preliminary or permanent injunctive relief or otherwise, as a remedy for a breach of another agreement or a statutory or common law duty.
A court may, in its discretion, reform or revise ("blue pencil") a noncompetition agreement in order to render it valid and enforceable to the extent necessary to protect the applicable legitimate business interests.
If a court declines to reform or revise an agreement, then the offending provision will be severed and the remainder of the contract or agreement will remain in effect.
Choice of Law
No choice-of-law provision that would have the effect of avoiding the requirements of this section will be enforceable if the employee is, and has been for at least 30 days immediately preceding his or her cessation of employment, a resident of or employed in Massachusetts at the time of his or her termination of employment.
All civil actions relating to employee noncompetition agreements subject to this law must be brought in:
- The county where the employee resides; or
- Suffolk County, if mutually agreed upon by the employer and employee. If brought in Suffolk County, then the actions must be brought in superior court or the business litigation session of the superior court.
Massachusetts courts will enforce noncompetition agreements where the consideration provided by the employee is at-will employment, provided the agreement is signed before or at the beginning of employment.
Massachusetts courts will enforce customer raiding or nonsolicitation agreements.
Interpreting Massachusetts law, the First Circuit Court of Appeals has clarified that a former employee violated the provisions of a customer nonsolicitation agreement even if the customers made initial contact. Corporate Tech., Inc. v. Harnett, +731 F.3d 6 (1st Cir. 2013). The Court highlighted the fact that the individual's new company had sent an email blast to his former customers, which incited the contact. The Court explained that the "identity of the party making initial contact is just one factor among many that the trial court should consider in drawing the line between solicitation and acceptance in a given case." Corporate Tech., Inc. v. Harnett, +731 F.3d 6, 12 (1st Cir. 2013). Employers should therefore be aware that nonsolicitation covenants may remain enforceable when customers initiate contact with a former employee bound by such an agreement depending upon the specific case facts.
In addition to the protections afforded trade secrets in connection with restrictive covenants, effective October 1, 2018, Massachusetts adopts the Uniform Trade Secrets Act (UTSA) with some modifications. See 2018 Mass. ALS 228, striking and replacing ALM GL ch. 93, §§ 42, 42A-42G. Under the UTSA, trade secrets are protectable if they have actual or potential economic value.
The law defines trade secret as specified or specifiable information that:
- Provides actual or potential economic advantage from not being generally known to and not being readily ascertainable by proper means by others; and
- Is the subject of reasonable efforts to maintain its secrecy.
- Business strategy;
- Customer list;
- Invention; or
- Scientific, technical, financial or customer data.
The law defines misappropriation as:
- An act of acquiring another's trade secret by a person who knows or who has reason to know that it was acquired by improper means; or
- An act of disclosure or of use of another's trade secret without the express or implied consent by a person who:
- Used improper means to acquire knowledge of the trade secret; or
- At the time of the actor's disclosure or use, knew or had reason to know that the actor's knowledge of the trade secret was:
- Derived from or through a person who had utilized improper means to acquire it;
- Acquired under circumstances giving rise to a duty to maintain its secrecy; or
- Derived from or through a person who owed a duty to maintain its secrecy or limit its use; or
- Before a material change of the actor's position, knew or had reason to know that it was a trade secret and that the actor's knowledge of it had been acquired by accident, mistake, or through another person's act of misappropriation.
Improper means includes:
- Unreasonable intrusion into private physical or electronic space; or
- Breach or inducement of a breach of a confidential relationship or other duty to limit acquisition, disclosure or use of information.
Reverse engineering from properly accessed materials or information is not improper means.
Remedies for violation of the UTSA include:
- Entry of injunctive relief to protect the trade secret;
- Damages in the amount of the actual loss and unjust enrichment caused by the misappropriation;
- Potential exemplary damages; and
- Potential attorney fees to the prevailing party.
Other relief may be available, including:
- Civil remedies to the extent that they are not based upon misappropriation of a trade secret; or
- Criminal remedies, whether or not based upon misappropriation of a trade secret.
Specifically, a court may issue an injunction upon a showing that information qualifying as a trade secret has been or is threatened to be misappropriated. Upon application to the court, an injunction may be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate any economic advantage that otherwise would be derived from misappropriation.
A court must preserve the secrecy of an alleged trade secret by reasonable means, which may include:
- Granting protective orders in connection with discovery proceedings;
- Holding in-camera hearings;
- Sealing the records of the action; and
- Ordering any person involved in the litigation not to disclose an alleged trade secret without prior court approval.
A party seeking relief must state with reasonable particularity the circumstances of trade secrets misappropriation, including the nature of the trade secrets and the basis for their protection.
Before commencing discovery relating to an alleged trade secret, the party alleging misappropriation must identify the trade secret with sufficient particularity under the circumstances of the case to allow the court to:
- Determine the appropriate parameters of discovery; and
- Reasonably enable other parties to prepare their defense.
Claims for misappropriation must be filed within three years:
- After discovery of the misappropriation is discovered; or
- By the exercise of reasonable diligence should have been discovered.
Under the law, a continuing disclosure or use constitutes a single claim.
The court may award reasonable attorney fees and costs to the prevailing party if:
- A claim of misappropriation is made or defended in bad faith;
- A motion to enter or to terminate an injunction is made or resisted in bad faith; or
- Willful and malicious misappropriation exists.
The court may take into account the claimant's specification of trade secrets and the proof that the alleged trade secrets were misappropriated.
Deductions from Wages
The Massachusetts Wage Act prohibits employers from entering into "special contracts" with employees that would permit the employer to withhold any earned wages. +ALM GL ch. 149 § 148. See Camara v. Att'y Gen'l, +458 Mass. 756 (2011). Massachusetts employers may not deduct from an employee's paycheck to compensate for damages or breakages or in lieu of discipline, even if agreed to by the employee. See Camara v. Att'y Gen'l, +458 Mass. 756 (2011).
Whether business expenses and deductions borne by employees are permissible deductions is an unsettled question.
Given the uncertainty surrounding permissible wage deductions in Massachusetts, employers should avoid implementing wage deduction programs beyond those that are legally required (e.g., taxes or health insurance contributions).
Paid Family and Medical Leave
An employer is prohibited from retaliating against an employee for exercising any right under the law or for the purpose of interfering with the exercise of any right under the law. In addition, the law prohibits retaliation against an employee who has:
- Filed a complaint;
- Instituted or caused to be instituted a proceeding under or related to the law;
- Has testified or is about to testify in an inquiry or proceeding; or
- Has given or is about to give information connected to any inquiry or proceeding related to the law.
The law defines retaliating as taking the following actions based on an employee's exercise of rights protected under the law:
- Disciplining through the application of attendance policies or otherwise; or
- Otherwise threatening or discriminating against the employee.
An employer will be presumed to have retaliated if there is a negative change in an employee's seniority, status, employment benefits, pay or other terms or conditions of employment of an employee:
- At any time during family or medical leave taken by the employee;
- During the six-month period following the employee's leave or reinstatement; or
- Within six months of the termination of proceedings in which the employee participated.
An employer may overcome this presumption with clear and convincing evidence (i.e. proof that results in reasonable certainty of the truth) that:
- Its action was not retaliation; and
- It had sufficient independent justification for taking the action and would have taken the action in the same manner and at the same time, regardless of the employee's use of leave, reinstatement or participation in proceedings or inquiries.
An employer found to have retaliated against an employee may:
- Be compelled to rescind any adverse change in the terms of employment;
- Be compelled to offer reinstatement to any termination; and
- Be found liable for administrative or civil penalties and other remedies.
ALM GL ch. 175M, § 9.
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