Metro Equipment Corporation vs. Commonwealth & others
Case Details
- Citation
- 74 Mass. App. Ct. 63
- Procedural Posture — the stage the case had reached
- appeal
- State
- Massachusetts
- Circuit
- 1st Circuit
Related Laws
No specific laws identified for this ruling.
Outcome
The court affirmed the administrative decision upholding a civil citation against Metro Equipment Corporation for intentionally failing to comply with the Attorney General's statutory demands for payroll records under Massachusetts wage law. Metro's constitutional challenges to the demands failed.
Excerpt
Metro Equipment Corporation vs. Commonwealth & others. No. 08-P-234. Suffolk. January 14, 2009. April 14, 2009. Present: Kantrowitz, Kafker, & Meade, JJ. Division of Administrative Law Appeals. Employment, Records. Labor, Wages. Constitutional Law, Production of materials on demand, Self-incrimination, Search and seizure. Corporation, Constitutional protection. Intentional Conduct. The Attorney General’s notice, pursuant to G. L. c. 151, § 15, to inspect the plaintiff corporation’s employee payroll records did not implicate any rights against self-incrimination, where the corporation did not enjoy any privilege against self-incrimination under the Fifth Amendment to the United States Constitution or art. 12 of the Massachusetts Declaration of Rights, and where the custodian of the records could not invoke a personal right against self-incrimination on the ground that the production itself would be self-incriminating, in that the purpose of the inquiry was regulatory, the records were of a type that the corporation was required to keep, and the records had assumed public aspects such that they were analogous to public documents. [67-70] A request from the Attorney General, made pursuant to G. L. c. 151, § 15, to inspect the plaintiff corporation’s employee payroll records did not constitute a warrantless search in violation of the Fourth Amendment to the United States Constitution or art. 14 of the Massachusetts Declaration of Rights, where the Attorney General never entered upon the corporation’s premises to conduct an inspection or search, and never attempted to do so; and where the request to inspect records was not equivalent to a search warrant. [70-71] Discussion of the standard of review applicable to an appeal from a judgment affirming a decision of the division of administrative law appeals. [72] Substantial evidence supported findings by the division of administrative law appeals that a corporation was cited for a particular instance of noncompliance with the Attorney General’s demand to inspect employee payroll records [72] and that the corporation committed an intentional violation of law in so doing [72-74], Civil action commenced in the Superior Court Department on October 31, 2006. The case was heard by Robert C. Cosgrove, J., on a motion for judgment on the pleadings. Robert L. Sheketoff (John D. Fitzpatrick with him) for the plaintiff. Kevin Conroy, Assistant Attorney General, for the Attorney General. Division of Administrative Law Appeals and the Attorney General. Meade, J. Metro Equipment Corporation (Metro) appeals from the Superior Court’s judgment denying its motion for judgment on the pleadings and affirming the division of administrative law appeals’ (DALA) decision to uphold a civil citation issued by the Attorney General. On appeal, Metro claims that the Attorney General’s requests for payroll records violate its (and its unnamed record custodian’s) rights under the Fifth Amendment to the United States Constitution and art. 12 of the Massachusetts Declaration of Rights; the Attorney General’s requests constitute warrantless searches in violation of the Fourth Amendment to the United States Constitution and art. 14 of the Massachusetts Declaration of Rights; and DALA’s decision is unsupported by substantial evidence. We affirm. 1. Background. On August 23, 2004, the Attorney General issued a notice of inspection of employee payroll records, pursuant to G. L. c. 151, §§ 3 and 15, to Metro, seeking payroll records for the period from November 1, 2003, through April 30, 2004 (first demand). The first demand provided Metro with two options for complying with its request: (1) making the specified records available for inspection at Metro’s office beginning on September 17, 2004, at 10:00 a.m.; or (2) delivering true and accurate copies of the records to the Attorney General on or before September 17, 2004. On September 14, 2004, the Attorney General sent a letter to Metro’s attorney, John Fitzpatrick, requesting compliance with the first demand by September 30, 2004. Metro failed to respond by the deadline. On October 28, 2004, the Attorney General sent the September 14 letter by facsimile transmission to Fitzpatrick, apparently because he had informed the Attorney General that he did not receive the copy sent by mail more than a month earlier. On October 29, 2004, Fitzpatrick replied to the October 28 communication, promising to respond to the Attorney General “shortly” and indicating Metro’s intention to work “cooperatively to resolve any concerns.” On January 21, 2005, Fitzpatrick sent another letter to the Attorney General, stating that he was “in the process of trying to get up to date with this file after receiving [the Attorney General’s] recent call” and reiterating Metro’s intention to work “cooperatively” with the Attorney General to resolve “any concerns.” On July 8, 2005, the Attorney General sent a second demand letter, requesting that Metro furnish the Attorney General with payroll records for the period from November 1, 2003, to present by July 29, 2005 (second demand). Fitzpatrick responded by letter on July 20, 2005, indicating that he was “trying to get up to date with regard to the subject of [the Attorney General’s] request and would anticipate being able to do so later in August.” He further noted that he was “presently under a great deal of deadline and case pressure.” On August 15, 2005, pursuant to G. L. c. 151, § 19(3), the Attorney General issued a $1,000 civil citation against Metro and its president for the “[flailure to furnish records for inspection on 7/29/05.” On August 22, 2005, Metro filed an appeal with DALA. While its appeal was pending, Metro attempted unsuccessfully to negotiate a settlement with the Attorney General, claiming that the second demand covered an “enormous period of time.” In addition, on October 21, 2005, Metro requested for the first time that the Attorney General clarify whether the nature of its investigation was civil or criminal. On October 28, 2005, Metro provided copies of employee payroll journals for the period covered by the first demand. On November 1, 2005, the Attorney General informed Metro that the records were not fully responsive to the requests, because the records produced did not contain certified payroll records, and did not include the period from May 1, 2004, through July 1, 2005, i.e., the period covered by the second demand. On January 25, 2006, Metro waived its right to a hearing before DALA and elected to rely on its written submissions, which alleged that there was no evidence that it intentionally committed a violation of law. Metro also alleged, for the first time, that (1) the first and second demands failed to comply with the constitutionally mandated requirements set forth in New York v. Burger, 482 U.S. 691, 702-703 (1987); and (2) given the Attorney General’s refusal to clarify whether its inquiry related to a civil or criminal investigation, the first and second demands implicated Metro’s (and its unnamed custodian’s) privileges against self-incrimination under the Fifth Amendment and art. 12. On October 2, 2006, the DALA magistrate affirmed the citation against Metro, but dismissed the citation with respect to its president. Metro sought judicial review in the Superior Court pursuant to G. L. c. 30A. On October 23, 2007, the judge denied Metro’s motion for judgment on the pleadings and affirmed DALA’s decision upholding the citation against Metro. 2. Fifth Amendment and art. 12 privileges. Metro claims that compliance with the Attorney General’s demands would violate its (and its unnamed custodian’s) Fifth Amendment and art. 12 rights against self-incrimination. Metro maintains that these rights are implicated because the Attorney General did not clarify whether the nature of his investigation was civil or criminal, and that Metro should not be punished for its noncompliance with the second demand. We disagree. As a preliminary matter, we note that the Attorney General is not burdened by the statute to reveal the nature of his investigation when making a records request. See G. L. c. 151, § 15. See also Wiedmann v. The Bradford Group, Inc., 444 Mass. 698, 704 (2005) (“The Attorney General has the authority to demand access to any documents that bear on a question of wages”). Nor does the Attorney General’s decision not to reveal the purpose for the request render Metro’s noncompliance with the second demand unintentional, particularly where Metro did not inquire as to the nature of the Attorney General’s investigation until after the citation issued on August 15, 2005. In general, the Fifth Amendment privilege against self-incrimination is a personal privilege that does not extend to a corporation or its records. Bellis v. United States, 417 U.S. 85, 89-91 (1974). Because the records themselves are not subject to a Fifth Amendment privilege, a record custodian may not resist a proper government demand on the ground that the contents of the documents would be personally incriminating. See Braswell v. United States, 487 U.S. 99, 110 (1988). Nor may a record custodian resist such a demand on the ground that the act of production itself would be self-incriminating. Id. at 111-112. As the United States Supreme Court held in Braswell, “[T]he custodian of corporate or entity records holds those documents in a representative rather than a personal capacity. Artificial entities such as corporations may act only through their agents, and a custodian’s assumption of his representative capacity leads to certain obligations, including the duty to produce corporate records on proper demand by the Government. Under those circumstances, the custodian’s act of production is not deemed a personal act, but rather an act of the corporation. Any claim of Fifth Amendment privilege asserted by the agent would be tantamount to a claim of privilege by the corporation — which of course possesses no such privilege.” Id. at 109-110 (citation omitted). Much like the Fifth Amendment privilege, the art. 12 privilege against self-incrimination extends only to natural persons, and not to a corporation or its records. In the Matter of a John Doe Grand Jury Investigation, 418 Mass. 549, 552-553 (1994). However, art. 12 does provide broader protection for record custodians than does the Fifth Amendment. In Commonwealth v. Doe, 405 Mass. 676, 679 (1989), the Supreme Judicial Court explicitly rejected the proposition that a custodian’s act of producing corporate records is deemed to be an act of the corporation only and not an act of the individual. While the custodian has no privilege in the documents themselves, “a custodian of corporate records may invoke his art. 12 right against self-incrimination in response to a subpoena for those corporate records when the act of production itself would be self-incriminating.” Commonwealth v. Burgess, 426 Mass. 206, 218 (1997). Here, however, the type of requested records that form the basis of Metro’s argument place it outside the scope of the ordinary production of corporate record circumstances discussed above. Where the discovery of incriminating evidence is the byproduct of obedience to a regulatory or statutory requirement, such as maintaining required records, such required conduct is not clothed with a testimonial privilege. See Shapiro v. United States, 335 U.S. 1, 17 (1948); United States v. Hubbell, 530 U.S. 27, 35 (2000). See also In re Harris, 221 U.S. 274, 279 (1911) (Holmes, J.) (regarding a court order that a bankrupt produce account books, “[t]he question is not of testimony but of surrender — not of compelling the bankrupt to be a witness against himself in a criminal case, past or future, but of compelling him to yield possession of property that he no longer is entitled to keep”). This exception, which is applicable to both the Fifth Amendment and art. 12 privilege claims, is known as the “required records” doctrine. Matter of Kenney, 399 Mass. 431, 438 (1987). The exception applies when three requirements are met: (1) “the purpose of [the State’s] inquiry must be essentially regulatory”; (2) the records must be of a type customarily kept by the party of whom the request is made; and (3) the records “must have assumed ‘public aspects’ ” such that they are analogous to public documents. Stornanti v. Commonwealth, 389 Mass. 518,521-522 (1983), quoting from Grosso v. United. States, 390 U.S. 62, 67-68 (1968). All three requirements are met here. First, the Minimum Fair Wage Law, which resides in G. L. c. 151, regulates employee compensation rates in various circumstances with a goal of preventing oppressive compensation. See G. L. c. 151, §§ 1 et seq. Compare Stornanti v. Commonwealth, supra at 522 (Attorney General’s Medicaid fraud unit investigation was regulatory where the unit was charged with regulating the State’s Medicaid program). The regulatory purpose of G. L. c. 151, § 15, may further be gleaned from the fact that the maintenance and production requirements are not directed to a particular group or entity “inherently suspect of criminal activities.” Marchetti v. United States, 390 U.S. 39, 57 (1968). Second, by statute and regulation, Metro is required to maintain the records of the type depicted in the Attorney General’s demands, and these records must be furnished upon request. G. L. c. 151, § 15. 455 Code Mass. Regs. § 2.06(2) (2003). See Stornanti v. Commonwealth, supra at 522-523. Third, the records at issue “have assumed ‘public aspects’ which render them at least analogous to public documents.” Grosso v. United States, supra at 68. In other words, although the records themselves are not “public documents,” their maintenance is necessary for Metro to meet its statutory obligation under G. L. c. 151, which is interwoven with the public interest in ensuring proper compensation of employees. See Matter of Kenney, 399 Mass. at 440. The Attorney General’s demands implicate neither the privilege protected by the Fifth Amendment nor that found in art. 12. See Stornanti v. Commonwealth, supra at 519, 522-523 (pharmacy records maintained under State and Federal Medicaid laws met the “required records” exception); Matter of Kenney, supra (records that an attorney was required to maintain under a disciplinary rule met the “required records” exception). See also Herman v. Galvin, 40 F. Supp. 2d 27, 30 (D. Mass. 1999) (“required records” exception applicable to demands made pursuant to G. L. c. 151, § 15). 3. Fourth Amendment and art. 14 claims. Metro also claims that the Attorney General’s requests for payroll records constituted warrantless searches in violation of the Fourth Amendment and art. 14. While Metro recognizes that the law provides an exception to the warrant requirement for certain statutorily authorized inspections of commercial property that would otherwise implicate constitutional protections, it claims that the Attorney General’s records demands fail to comport with the constitutional requirements for an administrative search under New York v. Burger, 482 U.S. at 702-703. Because we conclude that no search in the constitutional sense occurred when the Attorney General mailed the records demands to Metro, we need not determine whether the requirements of New York v. Burger were met. The Attorney General never entered upon Metro’s premises to conduct an inspection or search, nor did he attempt to do so. Contrast id. at 694-695 (officers entered respondent’s junkyard and announced their intention to conduct an inspection pursuant to statutory authority); Commonwealth v. Eagleton, 402 Mass. 199, 201 (1988) (police officers entered the defendant’s automobile body shop and attempted to conduct an inspection); Commonwealth v. Bizarria, 31 Mass. App. Ct. 370, 371-373 (1991) (police officers entered the defendant’s garage and searched the building and the adjacent parking lot); Commonwealth v. Tremblay, 48 Mass. App. Ct. 454, 455-456 (2000) (State trooper entered the office of an automobile salvage company and conducted an inspection of the defendant’s lot). In fact, the Attorney General made no physical intrusion into any area in which Metro could claim it had a reasonable expectation of privacy. We are similarly unpersuaded by Metro’s contention that the records demands are indistinguishable from search warrants, which must meet Fourth Amendment and art. 14 requirements. Rather, the demands are statutorily authorized discovery requests, for a particular class of documents, akin to subpoenas that require an individual or entity to find and produce requested items. In the context of a subpoena, the Supreme Judicial Court has said as follows: “As with any other discovery request, the subpoena provides the defining characteristics of the items it seeks and leaves it up to the witness to locate and produce them. Wherever responsive items are kept, and whether or not those locations would ordinarily be viewed as private such that the government would need a warrant to search them, there is no constitutional dimension to the requirement that the witness himself find and produce designated items. Subpoenas and discovery requests commonly require witnesses to retrieve documents and objects from locations in which they would have a reasonable expectation of privacy within the meaning of the Fourth Amendment or art. 14. That does not transform a subpoena into an unlawful ‘search’ that would raise constitutional concerns.” In the Matter of the Enforcement of a Subpoena, 436 Mass. 784, 793-794 (2002). Neither the Fourth Amendment nor art. 14 was implicated by the records demands. 4. Substantiality of the evidence, a. Standard of review. On appellate review, we defer to the agency’s findings of fact and “give due weight to the experience, technical competence, and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it.” G. L. c. 30A, § 14. In this instance, we will uphold DALA’s decision unless it is based upon an error of law, is unsupported by substantial evidence, or is arbitrary and capricious. Ibid. “Judicial inquiry under the substantial evidence test is limited to determination of whether, within the record developed before the administrative agency, there is such evidence as a reasonable mind might accept as adequate to support the agency’s conclusion.” Seagram Distillers Co. v. Alcoholic Beverages Control Commn., 401 Mass. 713, 721 (1988). b. Subject of the citation. Metro claims that the citation does not specify whether Metro was cited for noncompliance with the first or the second demand, and that the judge “assumed Metro was cited for the second demand.” DALA found that Metro was cited for an “intentional failure to furnish records for inspection on July 29, 2005,” the deadline articulated in the second demand. DALA later made clear its conclusion that the second demand was the subject of the citation, explaining that Metro violated its statutory duty to furnish records by the July 29, 2005, deadline set out in the Attorney General’s second demand. Given the clear reference to the deadline articulated in the second demand on the face of the citation, DALA’s finding that Metro was cited for failure to comply with the second demand is supported by substantial evidence. c. Intentional violation of law. Finally, Metro contends that the record contains insufficient evidence to support DALA’s finding that Metro committed an intentional violation of law. We disagree. The Attorney General mailed the second demand to Metro at Fitzpatrick’s office on July 8, 2005. As Metro does not claim that it was unaware of the contents of the second demand, we assume that, upon receiving the letter from the Attorney General, Fitzpatrick complied with his obligation to inform Metro of the records request and the deadline set for compliance. See Mass.R.Prof.C. 1.4, 426 Mass. 1314 (1998). Absent an extension from the Attorney General, Metro was required
Similar Rulings
Stephen Trychon vs. Massachusetts Bay Transportation Authority. No. 15-P-1316. Suffolk. May 16, 2016. September 15, 2016. Present: Agnes, Massing, & Kinder, JJ. Massachusetts Bay Transportation Authority. Practice. Civil. Motion to dismiss. Employment. Termination, Retaliation. A Superior Court judge erred in dismissing the plaintiff’s complaint charging the Massachusetts Bay Transportation Authority (MBTA) with violations of G. L. c. 149, § 185, the Massachusetts public employee whistleblower statute, where the plaintiff, a former managerial employee of the MBTA, alleged sufficient facts to plausibly show that he had engaged in protected activities (i.e., reporting contract fraud, unsafe track conditions, and the high incidence of eye injuries among employees), and that those activities played a substantial or motivating part in the MBTA’s decision to terminate his employment. [254-260] Civil action commenced in the Superior Court Department on February 11, 2014. A motion to dismiss was heard by Heidi E. Brieger, J. Kevin G. Powers for the plaintiff. Jeffrey A. Dretler for the defendant. Agnes, J. In this appeal, we must determine the legal sufficiency of Stephen Trychon’s complaint charging the Massachusetts Bay Transportation Authority (MBTA) with violations of G. L. c. 149, § 185, the Massachusetts public employee whistle-blower statute (whistleblower statute). A Superior Court judge allowed the MBTA’s motion, pursuant to Mass.R.Civ.P. 12(b)(6), 365 Mass. 755 (1974), to dismiss the complaint. We conclude that Trychon has stated a plausible claim for relief. See Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008). Accordingly, we reverse the judgment. 1. Standard of review. We review the order dismissing the complaint de novo, accepting the truth of all factual allegations and drawing all reasonable inferences in Trychon’s favor. See Glovsky v. Roche Bros. Supermarkets, Inc., 469 Mass. 752, 754 (2014). A complaint is sufficient to withstand a motion to dismiss if the factual allegations “plausibly suggest” an entitlement to relief, raising the right to relief “above the speculative level.” Harrington v. Costello, 467 Mass. 720, 724 (2014), quoting from Iannacchino, supra. See Mass.R.Civ.P. 8(a)(1), 365 Mass. 749 (1974). The factual content is sufficient if it “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” Garayalde-Rijos v. Municipality of Carolina, 747 F.3d 15, 23 (1st Cir. 2014), quoting from Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and “it. . . raise[s] a reasonable expectation that discovery will reveal evidence [of the alleged misconduct].” Lopez v. Commonwealth, 463 Mass. 696, 712 (2012), quoting from Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). In conducting the “context-specific” inquiry required by the plausibility standard, we must “draw on [our] judicial experience and common sense.” Lopez, supra, quoting from Ashcroft, supra at 679. “The critical question is whether the claim, viewed holistically, is made plausible by ‘the cumulative effect of the factual allegations’ contained in the complaint.” A.G. v. Elsevier, Inc., 732 F.3d 77, 82 (1st Cir. 2013), quoting from Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 14 (1st Cir. 2011). 2. Background. We recite the allegations of Trychon’s complaint, along with reasonable inferences that may be drawn from those allegations. Although merely allegations, we must accept them as true for the purposes of reviewing the dismissal of a complaint. See Harrington, supra. Trychon’s employment. The holder of a master’s degree in business administration, Trychon worked in various management positions for the MBTA from his date of hire on March 30, 2009, until April 10, 2013. During that time period, he was promoted twice and received excellent performance reviews. His job duties and responsibilities grew over time. Trychon alleges that he made it his mission to eliminate the causes of the MBTA’s $180 million debt. For example, Trychon brought in consultants to review the MBTA’s station cleaning program, working with them on creating new, more cost-effective contract specifications. As a result of his efforts, Trychon asserts that he saved taxpayers $18 million over a five-year period. According to Trychon, with the exception of his direct superior, Michael Turcotte, MBTA management was not interested in changing the “culture of waste and inefficiency.” Contract fraud investigation. Assigned by Turcotte on or about February 10, 2011, to investigate possible contract fraud, Trychon alleges he uncovered two improprieties at the MBTA: the illegal extensions of expired contracts and the practice of dividing large contracts and purchases into smaller ones to avoid the necessity of management approval. Trychon reported his findings to Turcotte and to Jonathan Davis, the then acting general manager of the MBTA (GM) and former head of the procurement department. An official fraud investigation revealed that the root cause of the fraud was the procurement department. As a result of the investigation, at least one employee was fired. Informed by the investigating accountant that the evidence of fraud in the procurement department “ran very deep” and that many more employees would be implicated if the investigation continued, Davis stopped the investigation. Eyewear policy. In or about May, 2011, Trychon noticed a significant number of eye injuries sustained by MBTA employees. As a result of an investigation, Trychon drafted and implemented a new eyewear policy that required all E & M employees performing potentially hazardous duties to wear protective equipment. After Trychon and Turcotte discovered general disregard of that policy by E & M employees during a department-wide safety audit, a directive was issued requiring all E & M managers to conduct daily safety inspections and to file daily reports. On or about January 25, 2012, an employee who reported to Patrick Kineavy, the director of MOW, was disciplined for refusing to put on the required eyewear as instructed by Trychon. When Trychon observed continuing noncompliance with the policy among Kineavy’s group, Kineavy received a written warning, was placed on a thirty-day corrective action plan, and was required to document and report his safety-compliance inspections. When asked to produce proof of his safety-compliance inspections, Kineavy was unable to do so, and later provided Trychon with twelve allegedly fabricated safety observations. In or about April, 2012, Trychon wrote a memorandum to Turcotte recommending that Kineavy be removed from his director duties. Acting GM Davis and MBTA human resources director William Perez rejected that recommendation independently submitted to them by Turcotte. Kineavy’s safety-compliance reporting duties were switched from Trychon to Turcotte. In August, 2012, Turcotte sought in writing Kineavy’s termination based upon Kineavy’s verbal threat, failure to enforce the eyewear policy, fraudulent reporting, and continued poor performance reviews. State Secretary of Transportation Richard Davey and acting GM Davis stepped in and created a new job for Kineavy with minimal responsibilities and better pay. They also switched Kineavy’s reporting duties to Sean McCarthy, “an old South Boston buddy of [Kineavy].” Suspected time fraud. The complaint further alleges that “[i]t was reported” to Trychon and Turcotte that “very close friends” of Kineavy and Matthew McGuire, the deputy director of MOW, did not punch in for work by hand scanner as required by MBTA policy, but were still being paid. Trychon determined that a supervisor in SMI “was taping or was allowing his name to be taped” on time sheets without properly verifying that the employees had actually reported for work. Trychon decided to conduct a full investigation of E & M to determine the extent of the practice. News of the investigation leaked, and the original records of Kineavy and McGuire were stolen. Unsafe track conditions. Trychon claims that, pursuant to State regulation, the MBTA is required to “update and create new track standards every two (2) years.” In or about August, 2012, Try-chon discovered that the last updates were made in 2008. Trychon directed Kineavy and McGuire to bring the MBTA into regulatory compliance as soon as possible. To that end, Trychon approved the hiring of a highly-regarded, independent track inspector, HNTB. The report issued by HNTB warned the MBTA of alarming safety conditions needing correction that dated back to HNTB’s previous inspection in 2006. Neither Kineavy nor McGuire had addressed the unsafe track conditions since 2006. McGuire steered the report to himself and did not disclose it to Trychon. A concerned member of McGuire’s staff provided copies of the HNTB report to Trychon, who in turn passed copies on to Tur-cotte and to his subordinates, directors Joseph McNall and Andrew Baker. Asked by Turcotte why he had hidden the results of the report, McGuire allegedly became enraged and accused Turcotte and Trychon of “having an agenda” against him and Kineavy. When Turcotte requested that Perez “relieve [McGuire] of his duties,” Perez stated that he would transfer McGuire to the MBTA’s safety department. McGuire informed his boss, Baker, that “[b]ig changes are coming, and he (McGuire) is not going anywhere.” Baker reported the comment to Trychon and to Turcotte. Adverse employment actions. The complaint also alleges that following Turcotte’s “functional[ ] demotion],” on March 1, 2013, by the new GM, Beverly Scott, Turcotte resigned. On April 9, 2013, Trychon received an unsigned card that stated, “ ‘Good luck.’ ‘Enjoy your layoff!’ and ‘Fuck off.’ ” On the following day, Perez informed Trychon that he was laid off. At the time, Trychon had not yet completed his investigation of the suspected time fraud. 3. Discussion. In general, G. L. c. 149, § 185, protects public employees from retaliation by their employers for disclosing to a supervisor or public body workplace activities, policies, or practices that the employee reasonably believes violate the law, or pose a risk to public health, safety, or the environment. There is little decisional law by our appellate courts construing § 185’s provisions. In contrast, the Federal courts have had the opportunity to construe and apply § 185 on a number of occasions. While we are required to make our own judgment about the intent of the Legislature in adopting the statute, and are not bound by interpretations reached by Federal courts, we regard those decisions as persuasive authority and, in this case, find them to be instructive. See Fidler v. E. M. Parker Co., 394 Mass. 534, 545 (1985). There are three elements to a whistleblower claim brought under G. L. c. 149, § 185. The plaintiff-employee must prove that (1) the employee engaged in a protected activity; (2) participation in that activity played a substantial or motivating part in the retaliatory action; and (3) damages resulted. See Welch v. Ciampa, 542 F.3d 927, 943 (1st Cir. 2008); Taylor v. Freetown, 479 F. Supp. 2d 227, 241 (D. Mass. 2007). The plausibility standard, as clarified by the United States Court of Appeals for the First Circuit, does not require the pleading of specific facts to establish each element of the prima facie case. See Rodriguez-Reyes v. Molina-Rodriguez, 711 F.3d 49, 54 (1st Cir. 2013) (noting that “prima facie [case] is an evidentiary standard, not a pleading standard”). The prima facie elements, however, are relevant “background against which a plausibility determination should be made.” Ibid. a. Protected activity. Only certain acts are protected by § 185, including, as relevant in this case, disclosures (or threatened disclosures) to a supervisor of and objections to an employer’s activity, policy, or practice that the employee reasonably believes violates the law or poses a risk for public health or safety. See G. L. c. 149, § 185, (3). We construe the allegations of the complaint as resting on both statutory subsections. Trychon has alleged sufficient facts to plausibly show that he engaged in one or more activities protected by § 185. First, following his investigation into alleged contract fraud, he reported two practices (the extension of expired contracts and the splitting of contracts) that he reasonably could have believed violated the public bidding law. See G. L. c. 149, § 44J(1), (3). Compare Romero v. UHS of Westwood Pembroke, Inc., 72 Mass. App. Ct. 539, 541 & n.3 (2008). Second, even if he was mistaken about the track inspection and maintenance laws, Trychon reasonably could have believed, based on HNTB’s 2012 report and on common sense, that the MBTA’s failure to correct the alarming track conditions for six years posed a risk to the public safety within the meaning of § 185. His disclosures to Turcotte of the updated HNTB report, the nonfea-sance by Kineavy and McGuire, and the alleged cover-up by McGuire qualified as protected activity for purposes of pleading his § 185 claim. We agree with the MBTA that the phrase “a risk to public health, safety or the environment,” as it appears in § 185, means a risk to public health, public safety, or the environment. However, drawing on our judicial experience and common sense, we are not persuaded by the MBTA’s further argument that Try-chon’s disclosures to his supervisors about the high incidence of eye injuries among employees, and the failure of certain managers to enforce the MBTA’s policy designed to reduce the number of such injuries is not, as a matter of law, a disclosure relating to the public health or public safety. Disclosures relating to workplace activities, policies, or practices that have a significant impact upon the cost of public employment, including healthcare costs, may diminish the availability of limited public funds for other pressing public needs, including public needs relating to health and safety, and therefore may be protected under the whistleblower statute. The MBTA is dependent upon public funding from the Commonwealth and its cities and towns to sustain its operations. See, e.g., St. 2015, c. 46, § 2E (line items 1595-6368 and 1595-6369 of the general appropriations law for fiscal year 2016, transferring public funds to accounts earmarked to support the operation of the MBTA). One operational cost of the MBTA is the payment of benefits to employees injured on the job because the MBTA is a self-insurer. See McCarthy’s Case, 66 Mass. App. Ct. 541, 541, 545-546 (2006). To the extent that the MBTA uses taxpayer dollars to compensate its injured employees, it diminishes the availability of those funds to be used for other purposes relating to public health and public safety. At this early stage of the proceedings, we cannot say, as a matter of law, that Trychon has not stated a plausible claim for relief with regard to the MBTA’s eye injury policy. On the other hand, the allegations relating to the suspected time fraud were too vague to support an inference that Trychon qualified for protected whistleblower status. An unnamed third party reported the violation of the hand scanner policy to Trychon and to Turcotte. Trychon, it was alleged, took two actions: he determined that a particular supervisor in SMI was not verifying employee time and he commenced an “E&M-wide” investigation. While a reasonable inference of fraudulent time reporting involving Kineavy and McGuire could be drawn, these sparse facts do not support an inference that before his layoff, Trychon engaged in any protected activity as to the suspected time fraud. No disclosure of, or threat to disclose, suspected time fraud to a supervisor may reasonably be inferred from these facts. See Estock v. Westfield, 806 F. Supp. 2d 294, 309 (D. Mass. 2011) (“The [whistleblower] statute prohibits retaliatory conduct on the part of an employer, not preventative conduct”). Although Trychon’s allegations concerning his conduct with respect to the suspected time fraud do not amount to protected activity, his other allegations of whistleblowing at this stage of the litigation are sufficient to withstand dismissal for failure to state a claim. b. Causation. We conclude that Trychon’s complaint, viewed as a whole, sufficiently alleged a causal connection between the protected activities and a retaliatory layoff to satisfy the plausibility standard. At the time of his discharge, Trychon’s trajectory was on the rise. He had evidently proven himself to be an effective and dedicated public employee, saving taxpayers millions of dollars, identifying fraudulent contracts, and exposing alarming track conditions that posed a risk to public safety. He had been promoted twice, and the scope of his job responsibilities was expanding. Generally, unless adverse conditions require a different course of action, employers who follow sound business practice do not select employees with excellent performance records for termination. Likewise, employers who follow sound business practice do not ordinarily transfer, shield, or reward employees whose poor performance or wrongful acts warrant termination, as the MBTA allegedly did according to the complaint. Trychon alleged adequate facts plausibly suggesting retaliatory animus harbored by MBTA management. The narrative of the complaint suggests a continuing pattern of opposition and hostility to Trychon, and to his mainstay Turcotte, over an extended period of time. Trychon claims that Kineavy and McGuire disregarded his directives, left fraudulent reports in his mailbox, hid HNTB’s alarming inspection report, and stole original records to thwart his time fraud investigation. Kineavy allegedly threatened to “fix” Turcotte “for good,” while McGuire accused Trychon and Turcotte of having a personal agenda against him and Kineavy. The retaliatory animus supposedly extended to the upper echelons of management. One could reasonably infer that acting GM Davis did not appreciate Trychon’s embarrassing disclosure of wrongdoing in a department that he personally had overseen, and that he wanted Trychon and his spotlight gone. After having shelved the investigation to avoid the implication of more employees in the contract fraud, Davis evidently supported the insubordinate and hostile Kineavy over Trychon and Turcotte. Indeed, it could be inferred that Davis, supported by Secretary Davey, rewarded Kineavy with an objectively better job for his opposition. The complaint alleges that the consequence of McGuire’s six years of nonfeasance as to track safety and his nondisclosure of the disturbing HNTB report was a planned transfer to the safety department. The treatment afforded to Kineavy and to McGuire plausibly suggested that they had influence far higher than their subordinate positions in the organizational chart. In short, for pleading purposes, the hostile acts and statements by Kineavy and McGuire, the unnatural protection afforded those individuals, and acting GM Davis’s suppression of the official contract fraud investigation initiated because of Trychon permit a plausible inference that Trychon’s protected activities played a substantial or motivating part in the decision to terminate him. Given the continuing pattern of opposition faced by Trychon, the temporal gap between Trychon’s protected conduct and his termination was not so attenuated as to fail to meet the plausibility standard. Trychon did not identify the individual who made the final decision to discharge him. Where, as here, it could reasonably be inferred that Davis and managers under his protection influenced that decision, the omission did not warrant the dismissal of the complaint. See Mole v. University of Mass., 442 Mass. 582, 598-600 (2004). In the alternative, the MBTA urges us to affirm the judgment based on the “normal job duties” exclusion. That doctrine limits employer liability where the employee’s disclosure to a supervisor occurred as part of
Plymouth Public Schools vs. Education Association of Plymouth & Carver & another. No. 15-P-906. Plymouth. April 11, 2016. June 30, 2016. Present: Cypher, Katzmann, & Massing, JJ. School and School Committee. Professional teacher status. Maternity leave. Arbitration, Termination of employment. Arbitration. Arbitrable question. School committee. Public Employment. Paid leave. Termination. Family & Medical Leave Act. In a civil action brought by a school district seeking, inter alia, a stay of arbitration following its tender of a notice of nonrenewal to a teacher who had taught in the district’s schools over the course of five consecutive years, but who had twice taken maternity leave permitted under the Family and Medical Leave Act, 29 U.S.C. §§ 2601 et seq., a Superior Court judge erred in denying the defendants’ motion to dismiss the complaint, where, given the strong public policy favoring arbitration, the preference for arbitration expressed in the Education Reform Act of 1993, and this court’s prior decisions, the question of the teacher’s status as a professional teacher must be decided by an arbitrator. [646-649] This court did not reach public policy arguments in a case involving the question of professional teacher status, where the issues were not ripe for review. [649-650] Civil action commenced in the Superior Court Department on February 18, 2014. A motion to dismiss was heard by Robert J. Kane, J., and the case was heard by Frank M. Gaziano, J., on motions for summary judgment. Matthew D. Jones (Ashley F. Call also present) for the defendants. Michael J. Long for the plaintiff. Kristen Bilbo. Massing, J. Defendant Kristen Bilbo taught in the plaintiff Plymouth Public Schools (district) over the course of five consecutive school years. She took maternity leave during two of them. The district tendered a notice of nonrenewal at the end of the fifth year. Bilbo asserts that her service, interrupted only by her leave permitted under the Family and Medical Leave Act, 29 U.S.C. §§ 2601 et seq. (FMLA), entitles her to professional teacher status, giving her rights including arbitration of her dismissal. The district contends that Bilbo is not entitled professional teacher status or arbitration because she did not serve three consecutive full years. We conclude that whether Bilbo has attained professional teacher status is for the arbitrator to decide. Background, Bilbo worked full-time as a special education teacher at Plymouth North High School starting on March 10, 2008, through the end of the school year in June, 2013. She took maternity leave during her first and fourth full years as a teacher, for sixty days in 2009 and for fifty-six days in 2012. Bilbo’s leave was authorized under the FMLA. She was paid during both absences using accumulated sick time and a sick-leave bank available under the governing collective bargaining agreement. Toward the end of her fifth year of teaching, by letter dated May 31, 2013, the district provided Bilbo with notice that she would not be reappointed to a teaching position for the next school year. The letter explained, “You are not being appointed to a teaching position based upon the recommendations of your supervising principal and program manager and the concerns about continuity of instruction and the education of our students.” Asserting that she possessed professional teacher status by virtue of her five consecutive school years of service, Bilbo, through the defendant Education Association of Plymouth and Carver (union), timely petitioned the Commissioner of Elementary and Secondary Education (commissioner) for arbitration of her status. The district opposed her request, arguing that she lacked professional teacher status and was therefore ineligible for arbitration. The commissioner on January 9, 2014, forwarded Bilbo’s petition to the American Arbitration Association, noting that “before addressing the merits of the dispute, the arbitrator should first address the question of arbitrability raised by the [district].” On February 18, 2014, the district filed the instant complaint in the Superior Court against Bilbo and the union, together with a motion for a preliminary injunction seeking to stay the arbitration. After a hearing, a judge denied the preliminary injunction motion on March 4, 2014, reasoning that G. L. c. 71, § 42, and our decision in Turner v. School Comm. of Dedham, 41 Mass. App. Ct. 354 (1996), mandated “that arbitration be the sole method used to resolve disputes concerning teacher termination in this Commonwealth, including disputes in which a teacher’s status as a professional teacher is questioned.” Bilbo and the union next moved to dismiss the complaint. While the motion to dismiss was pending, the parties proceeded to arbitration, submitting the matter to the arbitrator in the form of a joint statement of facts and legal memoranda in lieu of a formal hearing. Before the arbitrator issued a decision, however, a second judge denied the defendants’ motion to dismiss, reasoning that the question of Bilbo’s professional teacher status was for the court and not the arbitrator to decide. The arbitrator agreed not to issue his decision pending final resolution of the litigation. On December 17, 2014, the parties simultaneously filed cross motions for summary judgment. After a hearing, a third judge allowed the district’s motion and denied Bilbo’s and the union’s motion. Judgment entered for the district, declaring that Bilbo did not have professional teacher status at the time the district notified her of nonrenewal and that the nonrenewal did not violate the FMLA or the Massachusetts parental leave statute, G. L. c. 149, § 105D. The judgment also ordered a permanent stay of the arbitration. Bilbo and the union timely appealed from the judgment. Arbitration of professional teacher status. The first issue before us — and the only issue we reach — is whether the question of Bilbo’s professional teacher status is for an arbitrator or a judge to decide. As the judge who denied the district’s motion to preliminarily enjoin arbitration aptly noted, there is a “chicken and the egg nature” to this question. A teacher who teaches for three consecutive school years in a public school district of the Commonwealth and is not tendered written notice of nonrenewal by June 15 of the third year is entitled to “professional teacher status” under G. L. c. 71, § 41. Professional teacher status confers certain rights, including a degree of protection from dismissal, the right to seek review of a dismissal decision through arbitration, and, in the case of layoffs, the right to “bump” teachers without such status. See G. L. c. 71, §42. If Bilbo’s five school years of service, interrupted only by maternity leave in year one and year four, entitled her to professional teacher status, then the district’s action amounted to a “dismissal” under § 42, triggering the procedural and substantive rights that accompany professional teacher status — including arbitration. If not, then the district’s action was simply a “nonrenewal” under § 41. See note 5, supra. “A dismissal is not the same as a nonrenewal of a contract.” Laurano v. Superintendent of Schs. of Saugus, 459 Mass. 1008, 1009 (2011), quoting from Downing v. Lowell, 50 Mass. App. Ct. 779, 782 (2001). If Bilbo “was not dismissed from her position,” then “she was not entitled to the safeguards provided in G. L. c. 71, § 42,” Laurano, supra — including arbitration. Thus, the threshold question whether Bilbo has professional teacher status is determinative of whether she is entitled to arbitration of any dismissal. We have previously held that this question is within the scope of the arbitrator’s authority. The appeal in Turner v. School Comm. of Dedham, 41 Mass. App. Ct. 354 (1996), presented nearly the mirror image of the case now before us. After receiving notice that she was being laid off by the Dedham school where she taught, Pauline Turner filed a complaint in Superior Court seeking a declaration that she had professional teacher status and requesting an order that the school reinstate her and “bump” another teacher. Id. at 355. The school defendants filed a motion to dismiss, arguing that Turner’s sole remedy to challenge her dismissal was through arbitration under G. L. c. 71, § 42. Turner, supra. This court agreed, stating that the Education Reform Act of 1993, see St. 1993, c. 71, “t[ook] away the right of teachers to challenge their dismissal by filing an action in the Superior Court,” and instead “establish[ed] arbitration as the sole remedy for all dismissals.” Turner, supra at 357-358. Much like the district argues now, Turner argued then that the Legislature’s requirement of arbitration of dismissals did not prevent, as a threshold matter, “filing a complaint in the Superior Court seeking a declaration that he or she has attained professional teacher status.” Id. at 358. We rejected that argument: “We disagree with Turner’s argument because such an action would result in a Superior Court judge having to first make a declaration as to the status of the dismissed teacher, and then, if the judge declares that the teacher has acquired that status, the matter being remanded for arbitration as to his or her ‘bumping rights.’ We do not think that the Legislature intended to establish two successive forms of review in two different forums for dismissed teachers with professional status.” Ibid. Here, too, treating the question of Bilbo’s status separately from the propriety of her dismissal presents the risk of two successive forms of review in two different forums. The district makes a futile attempt to distinguish Turner by arguing that the concern with two successive forms of review is not present here because the only question to be determined is whether Bilbo enjoys professional teacher status. While it is true that a judicial determination that Bilbo does not have professional teacher status would be the end of the matter — she would not be entitled to arbitration of the grounds for her dismissal — the same was true in Turner. A judicial determination that Turner did not have professional teacher status would not have required a remand to determine her bumping rights. However, if a judge were to declare that Bilbo did have professional status, the merits of any dismissal decision would be for an arbitrator to review. The decision in Lyons v. School Comm. of Dedham, 440 Mass. 74 (2003), reinforces our decision in Turner. After this court affirmed the dismissal of Turner’s complaint, she and another Dedham teacher, Anne Lyons, had separate arbitration proceedings to determine their professional teacher status. Id. at 76. The arbitrators issued a joint decision, concluding that Turner and Lyons were not “teachers” within the meaning of G. L. c. 71, §§ 41 and 42, because their employment status as “Chapter I teachers” — hired under a federally funded program providing supplemental instruction to designated students in reading and mathematics — did not equate with the qualifications and characteristics of classroom teachers in the “Unit A” collective bargaining unit. Id. at 75-77. Lyons and Turner (again) filed a complaint in Superior Court, seeking to vacate the arbitrators’ decision and for a declaration that they were “teachers” within the meaning of the statute. Id. at 77. A judge of the Superior Court vacated the arbitration award, ibid., which the Supreme Judicial Court reinstated. Id. at 82-83. The court rejected the argument that the determination of professional teacher status under G. L. c. 71, § 42, was outside the jurisdiction of the arbitrators and reserved for the courts. Id. at 79-82. Relying on School Dist. of Beverly v. Geller, 435 Mass. 223, 230 (2001) (Cordy, J., concurring) (“[T]he responsibility for interpreting the meaning of G. L. c. 71, § 42, and the scope of the arbitrator’s authority thereunder remains with the court”), Turner and Lyons argued that “the judiciary is responsible for independently determining whether [they] are teachers under G. L. c. 71, §§ 41 and 42.” Lyons, supra at 81. The court disagreed, observing that G. L. c. 71 “does not define ‘teacher’ in the context of delineating who is eligible for ‘professional teacher status,’ ” ibid., and concluding that “the arbitrators had the authority to determine whether Lyons and Turner were teachers,” id. at 82. As an arbitrator has the authority to determine whether a person “shall be considered a teacher” within the meaning of G. L. c. 71, §41, we perceive no reason why an arbitrator does not equally have the authority to determine whether a person “has served in the public schools of a school district for the three previous consecutive school years” within the meaning of the same sentence of the same statute. See note 2, supra. In addition, we have held that an arbitrator may properly consider a similar question: whether a lengthy break in service deprives a teacher of professional teacher status. In Goncalo v. School Comm. of Fall River, 55 Mass. App. Ct. 7, 7-8 (2002), a tenured teacher stopped teaching after a dispute with school officials, which, she alleged, was related to her union activities. Nine years later, the school sent her a letter formally dismissing her as a teacher. Id. at 8. The teacher sought to arbitrate her dismissal, but the arbitrator declined to consider whether the school’s refusal to offer her a contract during those nine years was in continuing retaliation for her union activities, deciding instead that she was not entitled to arbitration because her break in service caused her to lose her professional teacher status. Id. at 8-9. We confirmed the arbitrator’s decision, concluding that the arbitrator did not exceed his authority. Id. at 10-11. Given “the strong public policy favoring arbitration,” Lyons, 440 Mass. at 77, quoting from Plymouth-Carver Regional Sch. Dist. v. J. Farmer & Co., 407 Mass. 1006, 1007 (1990), the preference for arbitration expressed in the Education Reform Act of 1993, and our prior decisions, we hold that the issue whether Bilbo has professional teacher status must be decided by an arbitrator. Additional considerations. Both parties contend that important public policy considerations require a determination in their favor on the issue of professional teacher status. Bilbo and the union contend that the FMLA forbids penalizing pregnant employees, or any other employee who takes FMLA-qualifying leave, by putting them in a worse position than if they had not taken leave. The district maintains that service time can be measured only in full-year increments, and that three uninterrupted years of review are necessary for schools to properly evaluate teachers and make staffing decisions for the next year. See G. L. c. 71, §41 (“A teacher without professional teacher status shall be notified in writing on or before June fifteenth whenever such person is not to be employed for the following school year” [emphasis supplied]). ‘“An arbitration award that offends public policy ‘is beyond the arbitrator’s powers and is therefore subject to vacation under G. L. c. 150C, § 11(a)(3).’ ” Lyons, 440 Mass. at 79, quoting from Massachusetts Hy. Dept. v. American Fedn. of State, County & Mun. Employees, Council 93, 420 Mass. 13, 16 (1995). However, ‘“because the public policy ‘doctrine allows courts to by-pass the normal heavy deference accorded to arbitration awards and potentially to ‘“judicialize” the arbitration process, the judiciary must be cautious about overruling an arbitration award on the ground that it conflicts with public policy.’ ” Bureau of Special Investigations v. Coalition of Pub. Safety, 430 Mass. 601, 604 (2000), quoting from E.I. DuPont de Nemours & Co. v. Grasselli Employees Indep. Assn. of E. Chicago, 790 F.2d 611, 615 (7th Cir.), cert. denied, 479 U.S. 853 (1986). Because of the view we take on the threshold question of arbitration, we decline to address the parties’ public policy arguments, which are in any event unripe at this juncture. Conclusion . The defendant Bilbo is entitled to arbitration of her professional teacher status and, if the arbitrator determines that she enjoys such status, ultimately of the merits of any dismissal. The judgment of the Superior Court is reversed, and a new judgment shall enter on all counts of the complaint and counterclaim consistent with this opinion. So ordered. “[A] teacher, school librarian, school adjustment counselor, school nurse, school social worker or school psychologist who has served in the public schools of a school district for the three previous consecutive school years shall be considered a teacher, and shall be entitled to professional teacher status as provided in section forty-two.” G. L. c. 71, § 41, as amended through St. 2006, c. 267. “A teacher with professional teacher status may seek review of a dismissal decision within thirty days after receiving notice of his dismissal by filing a petition for arbitration with the [Cjommissioner [of Elementary and Secondary Education].” G. L. c. 71, § 42, as appearing in St. 1993, c. 71, § 44. We draw our statement of facts from the parties’ joint statement of uncontested facts and exhibits submitted with their' cross motions for summary judgment. The letter cited G. L. c. 71, § 41, a portion of which provides, “A teacher without professional teacher status shall be notified in writing on or before June fifteenth whenever such person is not to be employed for the following school year. Unless such notice is given as herein provided, a teacher without such status shall be deemed to be appointed for the following school year.” Id., as appealing in St. 1993, c. 71, § 43. Bilbo has not asserted the alternative means of obtaining professional teacher status: “The superintendent of [a] district, upon the recommendation of the principal, may award such status to any teacher who has served in the principal’s school for not less than one year or to a teacher who has obtained such status in any other public school district in the commonwealth.” G. L. c. 71, § 41, as amended by St. 1996, c. 450, § 127. The complaint’s three counts sought a stay of the arbitration, a declaration that Bilbo did not have professional teacher status, and a declaration that Bilbo’s nonrenewal by the district was proper. Bilbo and the union then filed an answer and a counterclaim in three counts: to compel arbitration, to confirm any award issued by the arbitrator, and for a declaration that arbitration is the exclusive forum for determining Bilbo’s professional teacher status. “A teacher with professional teacher status . . . shall not be dismissed except for inefficiency, incompetency, incapacity, conduct unbecoming a teacher, insubordination or failure on the part of the teacher to satisfy teacher performance standards developed pursuant to section thirty-eight of this chapter or other just cause.” G. L. c. 71, § 42, as appealing in St. 1993, c. 71, § 44. Moreover, school principals “must follow strict procedural and substantive provisions before firing a teacher with professional status.” School Comm. of Pittsfield v. United Educators of Pittsfield, 438 Mass. 753, 761 (2003). The plaintiff had achieved tenure under G. L. c. 71, § 41, as it read before passage of the Education Reform Act in 1993. Goncalo, 55 Mass. App. Ct. at 9. A case interpreting the tenure statute prior to amendment by the Education Reform Act of 1993 held that “[t]he time spent on maternity leave [under G. L. c. 149, § 105D,] may not be counted towards the amount of time required for tenure,” but at the same time, that maternity leave “does not interrupt the consecutiveness of [the teacher’s] service except as to the period of time consumed by the leave.” Solomon v. School Comm. of Boston, 395 Mass. 12, 18-19 (1985). The court left open “the question whether such teacher must serve an entire additional year to compensate for the incomplet
Donna Vitali vs. Reit Management & Research, LLC. No. 14-P-1304. Suffolk. May 8, 2015. August 21, 2015. Present: Green, Milkey, & Maldonado, JJ. Labor, Overtime compensation, Wages. Practice, Civil, Summary judgment. In a civil action arising from the plaintiff employee’s claim that she accrued overtime that was not credited by the defendant employer’s timekeeping system, the allowance of summary judgment in favor of the employer was erroneous, where the summary judgment record permitted findings that the employer was armed with at least constructive knowledge that employees were undertaking lunch time work that should have been credited toward overtime and assumed in its own favor that employees were not performing any such work except where they separately reported it through a process the plaintiff was never trained in or even told to use. [103-112] Civil action commenced in the Superior Court Department on February 13, 2012. The case was heard by Mitchell H. Kaplan, L, on a motion for summary judgment. Stephen S. Churchill for the plaintiff. Jennifer B. Furey (Paul F. Beckwith with her) for the defendant. Milkey, J. The plaintiff, Donna Vitali, worked as a bookkeeper for the defendant, Reit Management & Research, LLC (company), a property management firm. She was paid by the hour, and pursuant to both statute and company policy, she was to be paid overtime at one and one-half times the regular rate for any work done in excess of forty hours in a given week. See G. L. c. 151, § 1A. She brought the current action alleging that she accrued overtime that was not credited by the system the company had in place to keep track of employee hours. In a detailed and thoughtful decision, a Superior Court judge allowed the company’s motion for summary judgment. Because we conclude that there are material facts in dispute, we reverse. Standard of review. Our review of the allowance of a motion for summary judgment is de novo. Deutsche Bank Natl. Trust Co. v. Fitchburg Capital, LLC, 471 Mass. 248, 252-253 (2015). Disputed facts are to be read in the light most favorable to the nonmoving party, in this case, Vitali. Id. at 250. “The moving party must affirmatively show that there is no real issue of fact, all doubts being resolved against the party moving for summary judgment.” Shawmut Worcester County Bank, N.A. v. Miller, 398 Mass. 273, 281 (1986) (quotation omitted). Evidence in the record is considered together with all reasonable inferences to be drawn from the record. Godfrey v. Globe Newspaper Co., 457 Mass. 113, 119 (2010). Background. 1. The nature of the dispute. Vitali was scheduled to work from nine to five, five days per week, with a paid one-hour lunch break. Both sides agree that lunch breaks do not count toward overtime. They also agree that if an employee has to work during what otherwise would be a lunch break, the employee gets no extra pay for doing so (since she or he is already being paid for that time). However, such worked lunch time can be counted toward the forty-hour overtime threshold, thus potentially indirectly increasing the employee’s over-all compensation. Vitali claims that she regularly worked during her lunch breaks even though that time was not recorded in the particular timekeeping system that the company used during the relevant period. She brought this action pursuant to G. L. c. 151, § 1A, purportedly as a class action, seeking the extra compensation that would be due if she and others similarly situated were credited for such lunch time work. 2. The company’s timekeeping system. On February 15, 2010, the company implemented a new electronic timekeeping system. Under this system, which was known as Kronos, hourly employees were required to use their computer terminals to “punch in” when they first arrived on a given day, and to “punch out” when they left. At the center of this case is how the company, relying on Kronos, accounted for employee lunch breaks. As the company acknowledged, when Kronos was first implemented, it did not have the “functionality” to allow employees to punch out for lunch and to punch back in when they returned. The absence of that feature created a potential discrepancy between the hours that an employee “clocked” using Kronos and the time they actually worked. Thus, for example, if Vitali confined her work to the scheduled nine-to-five work day and took her allotted one-hour paid lunch breaks, she would clock forty hours even though she actually worked only thirty-five hours. As a result, if Vitali performed work outside of the ordinary nine-to-five work day, the time automatically would be captured as clocked hours, but any time she spent working during lunch would not similarly be reflected. Thus, regardless of whether Vitali worked through all (or part) of lunch or took her full allotted lunch break, her hours clocked in Kronos would be the same. 3. The company’s practice in calculating overtime. In light of the discrepancy between hours worked and hours clocked, the company adopted a practice of paying overtime to hourly employees only once they clocked forty-five hours for a given week unless the employees separately reported having to work in lieu of lunch. In other words, except to the extent that hourly employees separately recorded their lunch time work, the company assumed that they took their full one-hour lunch breaks. According to Melissa Juppe, the company’s payroll supervisor, the proper protocol for recording lunch time work in Kronos was for employees to access a “drop down” menu on their computer screen through which they could then input the time code “worked hours” for the relevant amount of time. In Juppe’s own words, employees “would have to log in and then once they’re on their timecard, they go to the day they didn’t take their lunch, they insert a row and the pay code column they’d do the drop down and there’s a code that says working hours, and they would record the time that they worked during their lunch.” The extent to which employees were informed of this procedure and instructed that they should use it is reserved for later discussion. 4. Vitali’s alleged lunch time work. The exigencies of the company’s property management responsibilities sometimes required employees to work beyond their scheduled hours. For those in Vitali’s position, the events that required extended work included mass lease terminations, “[mjonthly closes, quarter closes, conference calls for bad debt, [and] audits.” As noted, when hourly employees were required to work outside of the scheduled nine-to-five work day, Kronos automatically recorded such hours. In those weeks in which Kronos recorded Vitali as having clocked more than forty-five hours, she was paid overtime. For example, during the week of February 28, 2011, Kronos recorded that Vitali clocked 49.75 hours, and she was paid for four and three-quarters hours of overtime. According to Vitali, her work responsibilities also required her to work during her lunch breaks on average three to four times per week. The employees in her unit did not have specifically scheduled lunch breaks; instead, people took them “when they could.” Vitali “always” brought her lunch and “typically” ate it at her desk in her cubicle. While she was taking such breaks, people would bring her assignments that required prompt attention. Vitali provided numerous examples of specific individuals who would bring such assignments and the kinds of tasks that required her to do work during lunch. For example, she identified Carrie Noyes as someone who “would come to [her] with bank reconciliation items that she needed resolved right away for [the company’s comptroller and another high ranking manager].” Vitali also stated that she regularly observed others working during their lunch breaks, and she specifically identified such individuals. It is uncontested that Vitali never successfully used the Kronos drop down menu protocol to record the lunch time work she claims to have performed, and that she did not receive credit for any such work toward the accrual of overtime. Had she been credited for the work, she would have received some additional overtime compensation (in those weeks in which her total worked hours exceeded forty). 5. The judge’s ruling. The judge concluded that with respect to Vitali’s uncorroborated claims to having worked regularly during lunch, “her deposition testimony to this effect is sufficient to create a jury question on [this issue].” However, he went on to rule in the company’s favor on other grounds. Specifically, he concluded that Vitali had failed to produce evidence upon which reasonable jurors could conclude that the company knew or should have known that Vitali had engaged in uncredited overtime. In this regard, the judge deemed it critical that Vitali had failed to report her lunch time work in accordance with available procedures, even in the face of the company’s general policy against paying overtime except where employees had obtained prior approval. The judge also found it significant that — in contrast to some of the cases that Vitali had cited — there was no evidence here that the company had pressured Vitali not to report the hours for which she was seeking credit. Discussion. The payment of overtime is governed by G. L. c. 151, § 1A. That statute “was ‘intended to be essentially identical’ to the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 207(a)(1) (2000).” Mullally v. Waste Mgmt. of Mass., Inc., 452 Mass. 526, 531 (2008), quoting from Swift v. AutoZone, Inc., 441 Mass. 443, 447 (2004). Accordingly, in interpreting the State law, we look to how the FLSA has been construed. See ibid. The case law has interpreted the FLSA in a manner that is highly protective of employee rights. As the United States Court of Appeals for the Second Circuit recently observed, “[i]n service of the [FLSA’s] remedial and humanitarian goals, the [United States] Supreme Court consistently has interpreted the [FLSA] liberally and afforded its protections exceptionally broad coverage.” Chao v. Gotham Registry, Inc., 514 F.3d 280, 285 (2d Cir. 2008). Pursuant to the FLSA, an employee must prove both that he incurred unpaid overtime work, and that the employer “had actual or constructive knowledge that he was working overtime.” Prime Communications, Inc. v. Sylvester, 34 Mass. App. 708, 709 (1993). The knowledge inquiry requires an assessment of what the employer knew or should have known, and is to be made in view of the employer’s “duty ... to inquire into the conditions prevailing in his business.” Gulf King Shrimp Co. v. Wirtz, 407 F.2d 508, 512 (5th Cir. 1969) (quotation omitted). In other words: “In reviewing the extent of an employer’s awareness, a court ‘need only inquire whether the circumstances . . . were such that the employer either had knowledge [of overtime hours being worked] or else had the opportunity through reasonable diligence to acquire knowledge.’ ” Reich v. Department of Conservation & Natural Resources, 28 F.3d 1076, 1082 (11th Cir. 1994), quoting from Gulf King Shrimp Co. v. Wirtz, supra. To the extent that an employee has reported his hours in accordance with the employer’s mandated timekeeping procedures, the employer’s knowledge of those hours is not in doubt. Thus, the cases concerning an employer’s knowledge all involve employee claims for unreported hours. In such cases, any failure by the employee to use prescribed timekeeping procedures is obviously a point in the employer’s favor. However, that failure is not fatal to the employee’s claim if he or she is able to marshal other proof that the employer had actual or constructive knowledge of the unpaid overtime. See, e.g., Holzapfel v. Newburgh, 145 F.3d 516, 524 (2d Cir. 1998) (“[0]nce an employer knows or has reason to know that an employee is working overtime, it cannot deny compensation even where the employee fails to claim overtime hours”). Thus, even where the employer has expressly prohibited overtime work, if it had reason to believe that such work was being done, “the employer cannot sit back and accept the benefits without compensating for them.” Reich, supra at 1082, quoting from 29 C.F.R. § 785.13. Conversely, if the employee is unable to marshal proof that the employer knew or should have known of the overtime work, the employee cannot prevail. See Prime Communications, Inc., supra at 711, quoting from Forrester v. Roth’s I.G.A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir. 1981) (no FLSA liability “where an employer has no knowledge that an employee is engaging in overtime work and that employee fails to notify the employer or deliberately prevents the employer from acquiring knowledge of the overtime work”). We are mindful that, in reviewing the summary judgment record, we must consider not only any direct evidence of the employer’s knowledge (actual or constructive), but also “all reasonable inferences” to be drawn from the evidence. Godfrey v. Globe Newspaper Co., 457 Mass. at 119. Indeed, an employer’s knowledge, like other “state of mind” inquiries, “is elusive and rarely is established by other than circumstantial evidence.” Blare v. Husky Injection Molding Sys. Boston, 419 Mass. 437, 439 (1995). Questions such as knowledge and intent often “require[ ] the jury to weigh the credibility of conflicting explanations.” Id. at 440. Thus, the determination of what a person knows or should have known under a specific factual situation is typically ill-suited for resolution by summary judgment. Riley v. Presnell, 409 Mass. 239, 247-248 (1991). Turning to the application of these principles here, we first examine whether the record creates a factual dispute regarding whether the company knew or should have known that Vitali did not take her full lunch breaks. We then turn to whether there was sufficient evidence in the summary judgment record that the company knew or should have known that Vitali was not receiving credit for such time. There was ample evidence upon which jurors could conclude that the company generally was aware that many of its employees sometimes worked during their allotted lunch breaks. For example, as discussed further below, when Kronos was first rolled out, the company’s payroll department received multiple employee inquiries about how to record lunch time work. One of the company’s own affiants even stated that during the relevant period, she “typically worked through lunch” as a matter of mere personal preference. Indeed, the practice of employees working through lunch apparently became so pervasive that the company on several occasions had to remind employees that they were supposed to take at least a one-half hour lunch break. Other than those periodic reminders, there is no evidence that the company sought to limit its employees from working during their lunch breaks. This is hardly surprising given that work done during a lunch break costs the company no extra direct compensation (since the employees were already being paid for that time). , In addition, there was evidence from which reasonable jurors could conclude that the company knew, or had reason to know, that Vitali in particular did not take her full one-hour lunch breaks. Unlike the typical overtime case where the extra work the employee claims to have performed was done off site, the alleged work here was done at her cubicle desk in an office setting. It is uncontested that Vitali typically took lunch breaks at her desk, and the company concedes “that, at times, Ms. Vitali received various work-related assignments throughout her day” from her supervisor. The company has not actually challenged Vitali’s specific averments as to the pressing nature of the assignments that she claims prevented her from taking her full lunches. Especially given that the state of an employer’s knowledge is to be assessed in light of its duty to inquire into the attendant working conditions, there was ample evidence on which jurors reasonably could have concluded that the company at least had reason to know that Vitali sometimes performed work during her lunch breaks. There was also evidence, discussed infra, that the company had actual knowledge of at least one occasion on which Vitali worked through her lunch break. Seeking to avoid the implication that it had reason to know that Vitali was performing work during her lunch breaks, the company highlights that it had a sternly worded policy in place requiring all employees to obtain specific prior approval before working overtime. See Newton v. Henderson, 47 F.3d 746, 749-750 (5th Cir. 1995) (employee cannot thwart clearly enforced policy against working overtime). This argument is unavailing for two reasons. First, the company has not shown that its policy requiring prior approval for overtime work had any application to employees performing work during their lunch breaks. Although lunch time work (like any other work done during the scheduled nine-to-five work day) counts toward the forty-hour threshold that needs to be crossed for overtime to be due, it does not itself constitute overtime. Thus, an hourly employee who worked through every lunch break would still not be entitled to any overtime unless she performed additional work outside of the normal nine-to-five work day. Notably, in reminding employees of the need to seek prior approval for overtime work, the written instructions that the company provided for using Kronos specifically equated “working overtime” with “coming in early or staying late.” The company was free to adopt a policy requiring employees to obtain prior approval before performing work on their lunch breaks; it simply did not do so. Second, there was evidence in the summary judgment record that the company’s policy of requiring specific prior approval for overtime was honored in the breach. For example, one of the company’s own affiants stated that her supervisor had given her “general blanket approval for overtime” when her department was “unusually busy.” Where an employer in practice fails to enforce a formal employment policy limiting overtime work, a jury could infer that the employer knew or should have known that employees were engaged in unauthorized overtime notwithstanding the existence of such a policy. See Reich, 28 F.3d at 1083 (recognizing that employer must do more than “simply continue to apprise [the employees]” of policy against working overtime). In addition, the company argues that even if it had reason to know that Vitali at times was not taking her full allotted lunch breaks, it still had no reason to know that she was not reporting this lunch time work. In making this argument, the company asserts that employees were well informed of the way in which hours worked during lunch were to be recorded in Kronos. The company maintains that it was fair and appropriate to assume that Vitali would have reported any lunch time work through the means that the company made available, especially where employees were required to attest to the accuracy of their recorded time. In short, the company contends that because Vitali failed to comply with reasonable reporting procedures, her case fails as a matter of law. See White v. Baptist Memorial Health Care Corp., 699 F.3d 869, 876 (6th Cir. 2012) (“Under the FLSA, if an employer establishes a reasonable process for an employee to report uncompensated work time the employer is not liable for nonpayment if the employee fails to follow the established process”). There are several problems with this argument. To begin with, “[t]he FLSA makes clear that employers, not employees, bear the ultimate responsibility for ensuring that employee time sheets are an accurate record of all hours worked by employees.” Skelton v. American Intercontinental Univ. Online, 382 F. Supp. 2d 1068, 1071 (N.D. Ill. 2005). Moreover, “an employer’s duty under the FLSA to maintain accurate records of its employees’ hours is non-delegable.” Kuebel
Mary Ellen Wessell vs. Mink Brook Associates, Inc., & another. No. 14-P-1120. Worcester. April 7, 2015. August 5, 2015. Present: Kafker, C.J., Kantrowitz, & Hanlon, JJ. Massachusetts Wage Act. Attorney at Law, Disqualification, Attorney-client relationship, Conflict of interest. Employment, Retaliation, Termination. Damages, Wrongful discharge of employee, Back pay. Practice, Civil, Instructions to jury, Damages. In a civil action in which the plaintiff asserted claims for lost wages and retaliatory discharge against the defendants (her former employers), a Superior Court judge properly denied the defendants’ motion to disqualify the plaintiffs attorney, where, although the attorney previously had advised the plaintiff on certain topics in the plaintiffs capacity as an employee of the defendants, those matters were not substantially related to the plaintiff’s complaint, given that there was no overlap or similarity; where the attorney never gained confidential information in those prior matters; and where the motion was a dilatory tactic, in that it was filed on the eve of trial, one and one-half years after the complaint was filed. [751-753] At the trial of a civil complaint in which the plaintiff asserted claims for lost wages and retaliatory discharge against the defendants (the plaintiff’s former employers), the judge correctly instructed the jury that if they found that the defendants had fired the plaintiff in retaliation for asserting a wage right, under G. L. c. 149, § 148A, the jury could award her damages based on her earnings from the date of her termination until the date of the jury’s decision [753-755], Civil action commenced in the Superior Court Department on June 19, 2012. A motion to disqualify the plaintiff’s attorney was heard by David Ricciardone, J., and the case was tried before him. Gregg S. Haladyna for the defendants. Steven D. Weatherhead (John F. Welsh with him) for the plaintiff. Robert C. Stone. Kantrowitz, J. This case involves a dispute between an employee and her former employer regarding unpaid wages. The plaintiff, Mary Ellen Wessell, successfully sued Mink Brook Associates, Inc. (Mink Brook), and owner Robert C. Stone under the Wage Act for lost wages and retaliatory discharge after Stone refused to issue her a paycheck, she complained, and she was fired. In this appeal, the defendants argue that the trial judge improperly denied their pretrial motion to disqualify opposing counsel because Wessell’s attorney, who was her long-time personal friend, had previously provided informal legal advice to her on certain topics in Wessell’s capacity as an employee of Mink Brook. The defendants also contend that the judge improperly instructed the jury on compensatory damages on the retaliation claim. We affirm. Background,. Mink Brook was incorporated in 1993 as a franchisee of Paul Davis Restoration, a national company that performed restoration work on houses to mitigate damage from flooding, fire, mold, or other problems. Stone was Mink Brook’s owner and president. In 2007, Stone contacted Wessell to discuss hiring her to work on the company’s financial matters and record-keeping. She joined Mink Brook in its Worcester office as a subcontractor at an hourly rate, and in 2008 she became the company’s “business manager” at an annual salary of $50,000. Wessell’s duties included managing accounts, human resources, payroll, bookkeeping, insurance policies, vehicle registration, and licenses. She would occasionally work from home on a laptop computer that Stone purchased. Wessell also performed unpaid work duties during her vacations or at times outside of her business hours. Employees received paychecks every two weeks. Wessell testified that she worked about fifty hours per week. During Wessell’s employment at Mink Brook, she occasionally sought informal legal advice from a close friend, Attorney John Welsh, whom she had known for many years. In 2008 and 2009, Wessell consulted with Attorney Welsh on a former employee’s breach of postemployment covenants, and Welsh drafted a cease- and-desist letter. In 2010, on matters involving another former employee, Wessell exchanged electronic mail messages (e-mails) with Welsh, and he reviewed correspondence that Mink Brook sent to the Attorney General’s office. Sometime in 2010, Welsh notified Wessell that he would no longer provide legal advice to Mink Brook. However, on June 15, 2011, Wessell again contacted Welsh, who agreed as a “friend” to provide advice on an issue involving building access by a Mink Brook job applicant who had a physical disability. Wessell testified that as of late 2011, she observed numerous problems or irregularities with the company’s finances and operations. She informed Stone of some of her observations, including her belief that an employee was “stealing from him.” Stone said “[bjasically nothing” in response to this information. Shortly thereafter, in early January, 2012, Stone called Wessell into a meeting in which the accused employee was present. At this meeting, Stone accused Wessell of lying about her reporting of work hours since her automobile accident (see note 3, supra). He demanded financial reports that were impossible for her to provide, and he ultimately demoted her from business manager, placed the accused employee in that role, and required Wessell to report to that employee. On March 28, 2012, during a meeting with several employees including Wessell, Stone addressed their financial concerns about Mink Brook and informed them that the company was not closing but was experiencing “just a little bump in the road.” Stone then named several employees who would still receive their upcoming paychecks, but he did not name Wessell. When she inquired about her paycheck, he stated that she would not receive it. Wessell responded that this was unfair and that she wanted to meet privately with Stone after the group meeting. One hour later, Wessell and Stone met privately in her office. Wessell demanded to be paid, and Stone replied that she “could afford not to get paid.” The next day, March 29, 2012, Wessell again met with Stone and the accused employee. Stone stated that Wessell was stealing money and reimbursing herself without authorization, which Wessell denied. Stone then fired her. Wessell formally retained Welsh who, on June 19, 2012, filed the instant complaint against Mink Brook and Stone, alleging claims of nonpayment of wages and retaliatory firing in violation of the Wage Act, G. L. c. 149, §§ 148, 148A. On January 2, 2014, nearly one and one-half years after the litigation began and eleven days before trial, the defendants filed a motion to disqualify Welsh, claiming a conflict of interest given Welsh’s attorney-client relationship with them. One week later the trial judge, after a hearing, denied the motion. The judge ruled that Welsh’s advice to Wessell, given when she worked for Mink Brook, was informal, free, and unrelated to the issues in her complaint. The judge concluded that although Welsh’s personal relationship with Wessell gave Mink Brook a “valuable contact,” Mink Brook and Welsh never established an attorney-client relationship. On January 14, 2014, the jury found for the plaintiff and awarded damages for lost wages and unused vacation time, up to the date of her firing, of $3,750. The jury also awarded lost compensation from the date of firing up to the date of the verdict, minus earnings from Wessell’s subsequent employment elsewhere, of $54,880.90. On January 24, 2014, the court entered an amended judgment that trebled the amount, as required under G. L. c. 149, § 150, and added interest, for an award of $187,111.38. This appeal followed. Motion to disqualify. Denial of a motion to disqualify an attorney is reviewed for abuse of discretion. Steinert v. Steinert, 73 Mass. App. Ct. 287, 288 (2008). A moving party must show, first, that the current representation is adverse to the interests of the former client, and second that the matters of the two representations are substantially related. Slade v. Ormsby, 69 Mass. App. Ct. 542, 546 (2007), citing Adoption of Erica, 426 Mass. 55, 61 (1997). See Mass.R.Prof.C. 1.9, 426 Mass. 1342 (1998). An attorney-client relationship “may be, but need not be, express; the relationship can be implied from the conduct of the parties.” Page v. Frazier, 388 Mass. 55, 62 (1983). For an implied attorney-client relationship, (1) a party must seek advice from an attorney, (2) the advice sought must be within the attorney’s professional competence, and (3) the attorney agrees to give, or actually gives, the advice. DeVaux v. American Home Assur. Co., 387 Mass. 814, 818 (1983). Additionally, “the question whether there was an attorney-client relationship depends on the reasonableness of the [complaining party’s] reliance.” Id. at 819. For matters to be “substantially related,” courts have consistently found that counsel must possess confidential information that could be used against the former client in the current representation. See Masiello v. Perini Corp., 394 Mass. 842, 847-850 (1985); Adoption of Erica, 426 Mass, at 63. When determining whether matters are substantially related, a judge should make a factual determination by comparing “the overlap and similarity” between the former and current representations. Slade v. Ormsby, 69 Mass. App. Ct. at 547. Courts discourage “eleventh hour maneuvers” to disqualify opposing counsel where the moving party has advance notice of the representation by opposing counsel but waits to raise the issue until the eve of trial. Masiello v. Perini Corp., 394 Mass, at 850. Such tactics “are disruptive to the efficient administration of justice and are costly.” Ibid. “Court resources are sorely taxed by the ... use of disqualification motions as harassment and dilatory tactics.” Gorovitz v. Planning Bd. of Nantucket, 394 Mass. 246, 250 n.7 (1985). Here, even if an attorney-client relationship existed between Welsh and the defendants, the judge properly denied the motion to disqualify because Welsh’s services, including his advice on handicap accessibility and review of certain letters, never involved matters “substantially related” to Wessell’s Wage Act dispute. See Slade v. Ormsby, 69 Mass. App. Ct. at 546. Although Welsh advised Wessell on specific Mink Brook employee matters, those matters were not substantially related to Wessell’s complaint because there was no overlap or similarity. See id. at 547. Also, Welsh never gained confidential information in the prior matters that disadvantaged Mink Brook at trial here. See Masiello v. Perini Corp., 394 Mass, at 847-850; Adoption of Erica, 426 Mass, at 63. Lastly, as the judge noted before trial, the defendants’ motion had all the indications of being an “eleventh hour maneuver[ ]” to disqualify opposing counsel despite numerous opportunities before trial to raise the objection. Masiello v. Perini Corp., 394 Mass, at 850. The defendants filed their motion on the eve of trial, about one and one-half years after Wessell’s complaint. Without a sufficient explanation for the extraordinary delay, the motion was properly denied not only as without merit but also as a dilatory tactic. Damages under Wage Act. The defendants argue that the judge erred when he instructed the jury that they could award the plaintiff compensatory damages (“back pay”) for a violation of the Wage Act, specifically for a retaliatory firing prohibited under G. L. c. 149, § 148A. They maintain that one who violates § 148A “shall be punished or shall be subject to a civil citation or order as provided in [G. L. c. 149, §] 27C,” only, and that § 148A does not enable a private individual to obtain compensatory damages because the criminal and civil penalties in § 27C are the exclusive remedy, enforceable by the Attorney General only, for § 148A violations. The Wage Act has interrelated mechanisms to ensure that employees are timely paid and protected when that right is asserted. Under G. L. c. 149, § 148, as amended by St. 1992, c. 133, § 502, an employer “shall pay weekly or bi-weekly each such employee the wages earned by him to within six days of the termination of the pay period during which the wages were earned if employed for five or six days in a calendar week . . . .” The first paragraph of G. L. c. 149, § 148A, inserted by St. 1977, c. 590, mandates that “[n]o employee shall be penalized by an employer in any way as a result of any action on the part of an employee to seek his or her rights under the wages and hours provisions of this chapter.” Completing the circle, G. L. c. 149, § 150, authorizes an employee faced with a violation of § 148 or § 148A to bring a civil action “for any damages incurred, and for any lost wages and other benefits.” See Fernandes v. Attleboro Hous. Authy., 470 Mass. 117, 126-127 (2014). The defendants’ view, that the remedy under § 148A is limited to criminal and civil penalties and not damages from the date of retaliation up to the date of judgment, is overly restrictive, essentially ignores G. L. c. 149, § 150, and leaves those aggrieved with no option other than a complaint to, and action by, the Attorney General. The Wage Act, when read as a whole to ensure payment and to protect employees who assert that right, does not support the defendants’ assertion that the § 27C language is exclusive and only allows actions by the Attorney General. In so arguing, the defendants ignore the authorization in § 150 for a private cause of action for retaliation prohibited by the first paragraph of § 148A. In sum, read in totality, for wage claims under § 148, an employee may recover earned wages that an employer has withheld. For retaliation claims under § 148A, an employee terminated by an employer for asserting a wage right may recover damages stemming from the termination. Damages for retaliation may include earnings from the date of termination up to trial. See Johnson v. Spencer Press of Me., Inc., 364 F.3d 368, 379 (1st Cir. 2004) (“An award of back pay compensates plaintiffs for lost wages and benefits between the time of the discharge and the trial court judgment”). Here, the defendants’ retaliatory firing of Wessell violated § 148A, which triggered Wessell’s § 150 remedy for recovery of “any damages incurred, and . . . any lost wages and other benefits.” The judge correctly instructed the jury that if they found that the defendants fired Wessell in retaliation, the jury could award her damages based on her earnings from the date of her termination until the date of the jury’s decision. See Fernandes v. Attleboro Hous. Authy., 470 Mass, at 130 & n.ll. Amended judgment affirmed. Our recitation includes both evidence put before the judge on the defendants’ pretrial motion to disqualify Wessell’s counsel and evidence put before the jury at trial. The latter we generally present in the light most favorable to Wessell. Much was undisputed, but where there was a relevant conflict, or a finding by the judge, we will so note. In April, 2011, Wessell was involved in a car accident, which required approximately eight weeks of recuperation and lost work. When Stone protested the lost time, Wessell worked part-time from home. She was paid at an hourly rate. Attomey Welsh stated in an affidavit that “I have known Ms. Wessell for over 35 years. She has been my sister’s best friend since grade school.” He further stated that “Ms. Wessell would call me intermittently (once every 12-18 months) for advice concerning personnel issues she was handling on behalf of the company.” Welsh stated in his affidavit that he stopped providing legal advice to Mink Brook because he found Stone’s treatment of Wessell to be unacceptable. Additionally, he had a billing and stolen property dispute with Mink Brook regarding work performed on his home. The defendants dispute receiving notice that Welsh’s legal advice stopped in 2010. The defendants also alleged that Welsh helped Wessell prepare an employee handbook for Mink Brook. Regarding Mink Brook’s finances, Wessell testified that sales were low and customers were complaining. On at least one occasion, Wessell had to delay issuing paychecks to herself and other employees. Wessell testified that Stone charged personal expenses to company credit cards and used company money to pay his son large amounts of money for cleaning the bathrooms, to provide his wife with a salary, to make payments on his home mortgage, and to purchase several items that were unrelated to the company’s home restoration business. Wessell testified that she later received a check for a portion of the money that Mink Brook owed her for wages. Wessell’s complaint stated that she received a right-to-sue letter from the Attorney General; this letter is not included in the record appendix, but the defendants raise no issue on this subject. Wessell’s complaint also included a quantum meruit claim that was eventually dismissed by stipulation of the parties. The matter of representation by Welsh was apparently considered by the defendants when they were defaulted in late 2012. Counsel for the defendants told the trial judge on January 9,2014, at the hearing on the motion to disqualify, that the default occurred because Stone considered the complaint “just an intimidation tactic,” and believed that Welsh could not bring the complaint because of his prior legal assistance to Mink Brook. The judge found: “There’s a very de minimis interaction between Ms. Wessell and Mr. Welsh in terms of some of this informal advice and education on legal topics such as handicap accessibility and what to do with a competing former employee and things of that nature. These contexts to me arise out of the personal relationship between the two. I think he was representing Mink Brook in only the most technical sense, and certainly by going ahead and representing Ms. Wessell in this case I don’t think that there is any basis for an abuse of confidential information regarding Mink Brook that he learned in the course of any of this advice. The advice Mr. Welsh gave on these few exchanges over the course of several years were on clearly unrelated matters . . . .” The statute states, in pertinent part, “An employee so aggrieved who prevails in such an action shall be awarded treble damages, as liquidated damages, for any lost wages and other benefits and shall also be awarded the costs of the litigation and reasonable attorneys’ fees.” G. L. c. 149, § 150, as amended by St. 2008, c. 80, § 5. On April 8, 2014, the court further ordered an award of Wessell’s costs and attorney’s fees, which together totaled about $40,000. The defendants did not file an appeal from that order, and its correctness is not before us. Rule 1.9(a) states, “A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client consents after consultation.” The Massachusetts Rules of Professional Conduct “specifically incorporate” the substantial relationship test. Adoption of Erica, 426 Mass, at 61. One can envision a scenario where matters are substantially related despite a lack of confidential information. Such is not the case here. “[T]he exact parameters” of when two matters are substantially related has not been delineated in the case law. Slade v. Ormsby, 69 Mass. App. Ct. at 547 n.11, citing Adoption of Erica, 426 Mass, at 62. Regarding the employee handbook that Welsh was alleged to have helped to create for Mink Brook, the judge found the defendants’ contention to be an “overstatement.” While Welsh infrequently gave uncompensated legal advice to Wessell, the defendants and Welsh never expressly created any formal representation agreement. See Page v. Frazier, 388 Mass, at 62. Additionally, while a closer question, they never formed an implied
Daniel Conway vs. CLC Bio, LLC. No. 14-P-350. Middlesex. December 10, 2014. June 12, 2015. Present: Kantrowitz, Green, & Sullivan, JJ. Arbitration, Judicial review, Award, Authority of arbitrator. Massachusetts Wage Act. There was no error in the denial of a motion to vacate an arbitration award concerning the plaintiffs claim for unpaid wages under 'the Wage Act, G. L. c. 149, §§ 148, 150, where, given that the arbitration clause in the plaintiffs employment contract (which expressly referenced statutory claims) was sufficiently broad to encompass both contractual and statutory claims, the plaintiffs only contention that the arbitrator exceeded his power was in substance a claim that the arbitrator committed an error of law, and was not subject to judicial review [505-507]; moreover, this court declined to consider the plaintiff’s contention that the limitation on judicial review of arbitration awards under commercial agreements concerning State statutory claims is contrary to public policy, given that the Federal Arbitration Act, governing private agreements to arbitrate in contracts in interstate commerce, supersedes State law that conflicts with its terms [507-509]. Civil action commenced in the Superior Court Department on February 17, 2012. A motion to vacate an arbitration award was heard by Douglas H. Wilkins, L, and judgment was entered by him. David B. Summer for the plaintiff. Michelle Y. Bush for the defendant. Sullivan, J. The plaintiff, Daniel Conway, appeals from the denial of his motion to vacate an arbitration award, see G. L. c. 251, § 12, concerning a claim for unpaid wages under the Wage Act. See G. L. c. 149, §§ 148, 150, as amended through St. 2008. We affirm and, in so doing, reiterate the standard of review applicable to complaints to vacate a commercial arbitration award. Background. To place our discussion in context, we set forth the facts found by and rationale of the arbitrator. Conway was employed by the defendant, CLC Bio, LLC (CLC), a bioinformatics company, from October, 2007, until his termination in January, 2012. Conway’s employment at CLC was governed by an employment contract that provided for his base salary and potential bonus payments or commissions. The contract also contained an arbitration clause that mandated arbitration of “any dispute or controversy arising out of or relating in any way to [Conway’s] employment with and/or termination from [CLC].” Conway’s employment at CLC was terminated on January 12, 2012. On January 18, 2012, CLC sent Conway a letter offering to pay severance and outstanding bonus payments to Conway in exchange for a release of claims. Conway failed to respond, but CLC tendered $30,325 in bonus payments to Conway on March 1, 2012, payments which included a $10,990 individual sales bonus (ISB). In the interim, on February 17, 2012, Conway filed a complaint against CLC in the Superior Court, alleging breach of contract, breach of the covenant of good faith and fair dealing, and violations of the Wage Act stemming from claims for severance pay, unpaid vacation time, and future and late-paid commissions. CLC moved to stay the proceedings and compel arbitration pursuant to the arbitration provision in Conway’s employment contract. See G. L. c. 251, § 1, as appearing in St. 1991, c. 398, § 96. The motion judge granted CLC’s motion, and the parties proceeded to arbitration. In arbitration Conway claimed, among other things, that CLC violated the Wage Act by failing to effectuate payment of the ISB on the date of his termination. See G. L. c. 149, § 148. The arbitrator found that the ISB, despite being called a “bonus,” was in fact a commission subject to the protections of the Wage Act. She concluded, however, that the ISB did not become “definitely determined” and “due and payable,” see G. L. c. 149, § 149, until the end of February, 2012, rather than the date of Conway’s termination, because the employment contract provided that ISB commissions were to be paid to employees only when the corresponding sales were paid in full by the customers. The arbitrator found that CLC would have tendered the ISB payment well before the end of February, 2012, if Conway had not failed to respond to CLC’s January 18, 2012, offer letter before initiating formal litigation. The arbitrator concluded that the delay in payment of the ISB until March 1, 2012, was not wholly attributable to CLC and was, therefore, not a violation of the Wage Act. Conway subsequently filed a motion to vacate the arbitrator’s award in the Superior Court, disputing only the arbitrator’s determination regarding the ISB. Conway contended that the arbitrator exceeded her authority in failing to find a violation of the Wage Act, and that the arbitrator’s conclusion to the contrary was not in accordance with the law. A judge of the Superior Court confirmed the arbitration award, and dismissed Conway’s complaint with prejudice. Discussion. There is a “strong public policy” favoring arbitration of commercial disputes. Connecticut Valley Sanitary Waste Disposal, Inc. v. Zielinski, 436 Mass. 263, 267 (2002) (citation omitted). Commercial arbitration awards, such as the one at issue here, are subject to a narrow scope of judicial review. See G. L. c. 251, § 12; Superadlo Ltd. Partnership v. Winstar Radio Prods., LLC, 446 Mass. 330, 333 (2006). Absent fraud, corruption, or other undue means in the procurement of the agreement to arbitrate or a showing that the award is otherwise void or voidable, an arbitrator’s award is binding. Id. at 336-337. McInnes v. LPL Financial, LLC, 466 Mass. 256, 262-263 (2013). An arbitrator’s findings of fact and conclusions of law are binding even if erroneous. Boston Water Power Co. v. Gray, 6 Met. 131, 181 (1843). Jones v. Boston Mill Corp., 6 Pick. 148, 156 (1828). Trustees of the Boston & Me. Corp. v. Massa chusetts Bay Transp. Authy., 363 Mass. 386, 390 (1973). Dane v. Aetna Cas. & Sur. Co., 369 Mass. 966, 967 (1976) (Dane). However, an arbitrator’s award may be vacated if the arbitrator exceeded her authority. See G. L. c. 251, § 12(a)(3); Superadlo, supra at 334. Conway’s assertion that the arbitrator exceeded her authority is misdirected. An arbitrator exceeds her authority if she awards relief beyond the scope of the arbitration agreement, beyond that to which the parties bound themselves, or enters an award prohibited by law. Superadio, supra. “The fact that an arbitrator [may have] committed an error of law does not alone mean that [s]he has exceeded [her] authority.” Boston v. Professional Staff Assn., 61 Mass. App. Ct. 105, 112 (2004) (quotation omitted). Conway’s employment contract expressly provided the arbitrator with the authority to arbitrate any “dispute or controversy arising out of or relating in any way to the Employee’s employment with and/or termination from the Company.” See note 2, supra. This arbitration clause, which expressly referenced statutory claims, is sufficiently broad to encompass both contractual and statutory claims. See Joulé, Inc. v. Simmons, 459 Mass. 88 (2011); Dixon v. Perry & Slesnick, P.C., 75 Mass. App. Ct. 271, 278 (2009); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (Gilmer). , Contrast Warfield v. Beth Israel Deaconess Med. Ctr., Inc., 454 Mass. 390 (2009). Conway’s “only contention that the arbitrator exceeded [her] power is in substance a claim that the arbitrator committed an error of law,” and is not subject to judicial review. Dane, supra. Conway relies on cases decided under the statutory arbitration provisions of the Education Reform Act of 1993, G. L. c. 71, § 42 (Reform Act), in support of his contention that the court is nonetheless authorized to review the award for errors of law based on a violation of statute. Arbitration cases arising under § 42 of the Reform Act involving terminated teachers with professional teacher status are inapposite in this respect. Arbitration of these cases under § 42 of the Reform Act is a creature of statute. In these cases, both the scope of statutory arbitration and the arbitrator’s authority are delimited by the Reform Act. As the Supreme Judicial Court has recently explained, “judicial review of an arbitrator’s interpretation of [an] authorizing statute ... is ‘broader and less deferential’ than in cases of judicial review of an arbitrator’s decision arising from an interpretation of a private agreement.” School Comm. of Lexington v. Zagaeski, 469 Mass. 104, 112 (2014), quoting from Atwater v. Commissioner of Educ., 460 Mass. 844, 856-857 (2011). In the case of statutory arbitration under § 42 of the Reform Act, where the source and scope of an arbitrator’s authority is defined by statute, a court is “better position[ed]” to interpret the scope of the arbitrator’s authority granted by the authorizing statute and is thus empowered to vacate an arbitration award if the arbitrator has exceeded her statutory authority. School Dist. of Beverly v. Getter, 435 Mass. 223, 229-230 (2001) (Cordy, J., concurring) (Getter). By contrast, in cases where the source and scope of the arbitrator’s authority emanate from a commercial agreement to arbitrate claims, including statutory claims, the arbitrator is fully “empowered to interpret the underlying contract and the extent of [her] powers thereunder.” Geller, supra at 229 (Cordy, J., concurring). Judicial review is therefore highly limited. Review for error of law or fact is precluded, unless the arbitrator has otherwise exceeded her authority by exceeding the scope of the agreement to arbitrate, or issuing an award that violates public policy. See Superadlo, 446 Mass, at 330, 334; School Comm, of Lexington v. Zagaeski, supra at 112. Conway contends that this result is contrary to public policy to the extent that it consigns the enforcement of statutes (like the Wage Act), which are meant to benefit the public as a whole, to private, unreported, unreviewable, standardless adjudication. We are foreclosed from considering this contention, which has been rejected in a series of cases beginning with Gilmer, supra, and culminating most recently in American Exp. Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013) (Amex), enforcing private agreements to arbitrate. See Feeney v. Dell Inc., 466 Mass. 1001 (2013); McInnes v. LPL Financial, LLC, 466 Mass. 256, 261-263 (2013). A private agreement to arbitrate in a contract in interstate commerce is governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (2006) (FAA), which supersedes State law that conflicts with its terms. McInnes, supra at 264. Preston v. Ferrer, 552 U.S. 346 (2008). “In all relevant respects, the language of the FAA and [G. L. c. 251, §§ 2 and 12,] providing for enforcement of arbitration provisions are similar, and we have interpreted the cognate provisions in the same manner.” Warfield, supra at 394. Under the FAA, absent a question of arbitrability, countervailing Congressional command, or cognizable challenge to the validity of the agreement to arbitrate, an agreement to arbitrate statutory claims must be enforced. 9 U.S.C. §§ 2, 10-11. Amex, supra. Gilmer, supra. Any attempt to refashion our State law to permit de novo review of commercial arbitration awards involving statutory claims would run afoul of the FAA, which also prohibits review of an arbitrator’s findings of fact and rulings of law, so long as the arbitrator does not otherwise exceed her authority. See 9 U.S.C. § 10(a)(4); Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (2008); Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064, 2070 (2013). See also Wilko v. Swan, 346 U.S. 427 (1953), abrogated on other grounds by Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477 (1989). The judgment confirming the arbitration award and dismissing the complaint is affirmed. So ordered. The commissions clause provided that “[CLC] shall pay [Conway] a commission as set forth in Appendix A, which is attached hereto and hereby incorporated by reference. [Conway’s] commission shall be deemed to have been earned by [him] and owing by [CLC] when the invoice applicable to the specific products and services sold has been paid in full by the customer.” The arbitration clause of Conway’s contract provided in part: “The Employee agrees that any dispute or controversy arising out of or relating in any way to the Employee’s employment with and/or termination from the Company (including, but not limited to, all claims, demands or actions under any federal, state or local statute or regulation regarding employment discrimination, and/or all claims, demands or actions concerning the interpretation, construction, performance or breach of this Agreement) shall be settled by arbitration held in Boston, Massachusetts, in accordance with the Rules of the American Arbitration Association, before an arbitrator who shall have experience in the area of the matter in dispute. Each party shall bear its own costs and attorneys’ fees in connection with any arbitration pursuant to this paragraph.” The statute provides in relevant part: “This section shall apply ... to the payment of commissions when the amount of such commission, less allowable or authorized deductions, has been definitely determined and has become due and payable to such employee, and commissions so determined and due such employees shall be subject to the provisions of section one hundred and fifty.” G. L. c. 149, § 148. Gilmer was decided under the provisions of the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (2006) (FAA), which governs agreements to arbitrate in interstate commerce and supersedes State law to the contrary. See infra. Agreements to arbitrate implicate a number of State and Federal statutes in addition to the FAA. Enforcement of arbitration awards arising under private sector collective bargaining agreements involving companies in interstate commerce are governed by § 301 of the National Labor Relations Act, as amended, 29 U.S.C. § 185 (1952) (NLRA). The State court has concurrent jurisdiction to enforce awards governed by § 301 of the NLRA. Morceau v. Gould-National Batteries, Inc., 344 Mass. 120, 123-124 (1962), citing Charles Dowd Box Co. v. Courtney, 368 U.S. 502 (1962) (affirming Courtney v. Charles Dowd Box Co., 341 Mass. 337 [1960]). General Laws c. 150C is the State statute that also governs the enforceability of both public and private sector collectively bargained agreements to arbitrate, except as otherwise provided by the Education Reform Act of 1993, G. L. c. 71, § 42. The statute at issue here, G. L. c. 251, § 1, as appearing in St. 1991, c. 398, § 96, governs other agreements to arbitrate in the Commonwealth. The same rule applies to review of arbitration awards under public sector collective bargaining agreements (other than those governed by the statutory arbitration provisions of the Education Reform Act of 1993, G. L. c. 71, § 42, see infra) and private sector collective bargaining agreements. See Lynn v. Thompson, 435 Mass. 54, 61-62 (2001), cert, denied, 534 U.S. 1131 (2002) (interpreting G. L. c. 150C, § 11); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). See also Greene v. Mari & Sons Flooring Co., 362 Mass. 560, 563 (1972) (interpreting 29 U.S.C. § 301 and G. L. c. 150C, respectively). In other respects, the standard of review of arbitration awards under the Reform Act is the same. That is, absent a showing that the arbitrator exceeded her authority, “a reviewing court is ‘strictly bound by the arbitrator’s factual findings and conclusions of law, even if they are in error.’ ” School Comm, of Marshfield v. Marshfield Educ. Assn., 84 Mass. App. Ct. 743, 752 (2014), quoting from School Comm, of Lowell v. Robishaw, 456 Mass. 653, 660 (2010) (citations omitted). Other grounds for vacating an award under the FAA include corruption, fraud, undue means, or misconduct. 9 U.S.C. § 10(a). Similar grounds are set forth in G. L. c. 251, § 12. We need not address whether “manifest disregard” for the law remains a nonstatutory ground for vacatur under the FAA, see Citigroup Global Mkts., Inc. v. Bacon, 562 F.3d 349 (5th Cir. 2009) (and cases cited), discussing Hall St. Assocs., LLC v. Mattel, Inc., 522 U.S. 576 (2008), since the claims made here do not rise to the level of “manifest disregard,’ however that term has been defined.
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