Employment FAQs

Employment Law

WHEN SHOULD AN EMPLOYEE CONSULT AN ATTORNEY? 

Contact an attorney if you need help to help with the following: (1) negotiating an employment agreement before you join a company, or negotiating a severance package when you leave employment; (2) coaching you through a difficult employment situation and explaining what you need to do to preserve your rights; (3) explaining if you are a legally protected whistleblower, the victim of discrimination, sexual harassment or illegal retaliation; (4) advising you of the strengths and weaknesses of any potential claim, including the risks of filing suit and the potential for recovering damages; (5) filing a successful application for unemployment compensation; and (6) advising you how to get a copy of your personnel file and require the employer to include your side of the facts in your file.  IMPORTANT: If you think your job is at risk, do NOT wait until after you are fired to contact an attorney.  You have less leverage once you are gone.  Do NOT just quit if you are in a bad situation.  As discussed below, if you voluntarily quit, you may not be eligible for unemployment benefits.  Also, if you receive a severance package, do not panic and sign it without consulting an attorney. You may have leverage to negotiate an enhanced severance package, but only it you have not signed a release of all claims. If you are over 40, the employer must give you at least 21 days to consider the severance agreement.

WHEN SHOULD AN EMPLOYER CONSULT AN ATTORNEY?

An employment lawyer can protect an employer by: (1) drafting or reviewing all employment contracts, Employment Handbooks or Codes of Business Conduct, severance agreements, and arbitration agreements; (2) advising you about relevant laws and how they affect your personnel decisions; (3) coaching you on how to deal with a problem employee, including the strategy and documentation you will need to develop to protect you from litigation; and (4) representing you if you receive a demand letter from an employee or are sued by an employee.  An employer may be justifiably unhappy with an employee but if you do not properly document the reasons for your actions, or do not comply with your own internal policies or handbooks, you open yourself up to litigation.

WHAT ARE AN EMPLOYEE’S RIGHTS UNDER THE AMERICAN WITH DISABILITIES ACT?

By law, an employer may not discriminate against a person with a disability who can do the job with a reasonable accommodation that does not present an undue hardship to the employer. It is wrong for an employer to insist that it will only hire people who can do a job without any restrictions.  If an employee is disabled and asks for an accommodation, the employer MUST engage in what the law calls “an interactive dialogue” with the employee.  In other words, the employer must discuss the request and may not simply reject it out of hand.  The employer must discuss other options if that request is not reasonable.  Employers commonly make a mistake when they fail to engage in this interactive dialogue.  Failure to participate in this dialogue creates a claim for disability discrimination, especially if the employee can argue that he or she would not have been fired if the employer had just been more open to the request for assistance.  Additionally, an employer is liable if it treats an employee differently because of a perceived disability.  The purpose of the Americans with Disabilities Act is to eliminate the stereotypical myths and assumptions about disabled people.  Consider the example of an employee with treatable cancer.  If employer refuses to allow the employee to return from sick leave due to the employer’s unsupported belief that the employee is unable to do the job because of a perceived disability, that is illegal.

WHAT IS AN AT-WILL EMPLOYEE? 

An employee who is not covered by a Collective Bargaining Agreement or an employment contract is called an “at-will” employees. This means that employees can terminate their employment at any time for whatever reason with or without notice.  Similarly, the employer can terminate employment or change the terms or conditions of employment at any time and for any reason, with or without cause.  Courts have repeatedly held that an employer can fire an employee for a good reason, a bad reason, or no reason at all — so long as it’s now an illegal reason. Illegal reasons include age, gender, sexual orientation, race or disability discrimination.  It is against the law to retaliate against an employee who is engaging in what the courts call “protected activity”, e.g., taking leave under the Family Medical Leave Act, reporting financial fraud, complaining about discrimination.

CAN AN EMPLOYEE WHO IS FIRED OR QUITS STILL BE ELIGIBLE FOR  UNEMPLOYMENT COMPENSATION?

Yes.  In Massachusetts, employees may be eligible for unemployment compensation if they do not voluntarily quit.  So, unemployment benefits are available for employees who: (1) were terminated for performance reasons; (2) quit their job due to racial, gender or religious discrimination; or (3) quit their job because of domestic violence concerns. By way of illustration, an employee quit her job because she believed that her manager put her on an unreasonable performance improvement plan after she refused to date him. Under those circumstances, she was able to win unemployment compensation based on the legal principle of constructive discharge. Also, if an employee signs a severance agreement in which he/she waives the right to file a legal claim, unemployment benefits are usually available.

WHEN IS A HOSTILE WORK ENVIRONMENT ILLEGAL?

There is an important difference between an unhappy work environment and an illegal hostile work environment.  It is not illegal to have a toxic workplace where a boss or co-worker is rude or mean.  Courts will not act as super personnel departments or the etiquette police.  An illegal hostile work environment exists when there is discrimination or sexual harassment that unreasonably interferes with the employee’s ability to do his or her job.  For example, it is illegal for a boss to insist that he will not give an employee health benefits unless she dates him or has a physical relationship with him.  In Massachusetts, an employer is strictly liable for a manager’s sexual harassment, whether or not the employer knew about it.  An employer who allows any employee, supervisor or otherwise, to repeatedly call someone a vulgar or offensive sexual or racial name, even jokingly, may also be subject to liability for perpetuating a hostile work environment.  Sexual harassment is illegal whether it’s male vs. female, male vs. male, female vs. female, straight vs. gay.  Illegal discrimination includes both open and subconscious prejudices.  Firing the older employee in favor of the less qualified younger employee is illegal age discrimination. Laying off the female employee with more supervisory experience and replacing her with a less experienced male employee is sex discrimination.  Assigning certain jobs to men only that creates better opportunities for advancement is illegal sex discrimination.  Punishing a minority employee for the same rule violation that a white employee got away with is race discrimination. 

ARE NONCOMPETITION AGREEMENTS ENFORCEABLE? 

In Massachusetts, the answer is usually yes, except for doctors and lawyers, so long as it’s not overly broad in time or geographic scope.  Courts will sometimes frown on restrictions that bar a former employee from working for years instead of months, or within the entire United States, rather than a more reasonable geographic limitation.  Employers will want to use non-competition agreements when they are concerned that a key employee might leave for a competitor.  No one should sign a non-compete agreement without considering important implications. For example, the agreement may say that any dispute or litigation will be governed by the laws of a state other than Massachusetts. Job candidates should try to negotiate whether the non-compete still applies if they are laid off or otherwise involuntarily terminated. If you are laid off, you might be able to negotiate a “carve out” that only excludes you from working for specific companies.  An employee may not rely on oral assurances that the employer will not enforce the non-compete since the agreements typically say they can only be modified by mutual written agreement. As an alternative to the more restrictive, and sometimes disfavored, non-compete agreement, employers and employees can negotiate a non-solicitation agreement.  The non-solicitation agreement bars a former employee from soliciting clients or prospects of the employer for a reasonable specified period of time.  Non-solicitation agreements are not disfavored by courts because they allow the employee to make a living while simultaneously protecting the employer’s legitimate interest in keeping its client base.  An employer should, therefore, consider whether it really needs a non-competition agreement for all of its employees, or whether a non-solicitation agreement will be sufficient.

IS AN EMPLOYEE ENTITLED TO A COPY OF HIS OR HER PERSONNEL FILE?

Massachusetts law requires employers of 20 or more employees to maintain personnel files, and sets forth the number of years employers must retain these files. Some of the required documents for personnel files are: job title and description; all performance evaluations; rate of pay and other compensation paid to the employee; and written warnings of substandard performance. Employers must produce a copy of their personnel file within 5 business days of a written request by the employee. Violation of this law is punishable by a fine of $500-$2,500 and is enforced by the Attorney General.

EMPLOYEE OR INDEPENDENT CONTRACTOR?

The category into which workers fit is determined by the conditions under which they work and the kind of work they do. An employer does not have the discretion to simply select a category under which the worker falls. Just because someone is called an independent contractor does not make it so.  The penalties for misclassifying employees as independent contractors are severe, and can include back taxes, penalties and interest, unemployment and workers compensation liability and retroactive fringe benefits. A written contract between the company and the individual may help clarify the relationship, but it is not sufficient all by itself to make a worker an independent contractor. Among the factors a Court will consider are: (1) the nature and degree of the company’s control of hours and manner of work; (2) tools and materials furnished; (3) work assignment method; (4) requirement to work on company premises; (5) the permanency of the relationship; and (6) the extent to which the worker’s services are an integral part of the company’s business. 

HOW DOES AN EMPLOYEE PROVE ILLEGAL RETALIATION?

An employee must show that: (1) he/she engaged in protected activity, e.g., the employee reported financial fraud, patient abuse, or complained to management about sexual harassment or discrimination; (2) after reporting the misconduct by the employer, the employee suffered a negative employment action, e.g., termination, suspension, demotion, poor performance evaluation, or a change in duties; and (3) a causal connection exists between items 1 and 2.  Courts have held that “close temporal proximity” between the employee’s protected activity and the adverse employment action can help prove a claim of retaliation.  There are a number of laws that forbid retaliation against specific groups of employees: Anti-discrimination and sexual harassment laws; health care provider laws; Sarbanes-Oxley, which protects employees of publicly held companies who complain about financial misconduct; Consumer Products Safety Improvement Act which protects employees of manufacturers, retailers and distributors of certain consumer product who report safety violations. 

WHAT IS THE EMPLOYER’S DUTY TO PAY WAGES, COMMISSIONS AND VACATION PAY?

Simply put, if you worked for it, you are owed it.  Under Massachusetts law, an employer must pay the employee earned wages, which includes commissions, overtime, etc.  It is a strict liability law.  In other words, the employer MUST pay you and cannot offset the amount by claiming you did not do your job properly.  Employers are prohibited from retaliating against employees who complain about unpaid wages and commissions.  The law allows an employee to recover treble damages and attorney’s fees. The employer MUST pay you outstanding wages and accrued vacation pay within 48 hours of your termination, regardless of whether or not you sign a severance agreement.  If the employer makes such payment contingent on you signing the severance agreement, it is in violation of Massachusetts wage laws.

Contracts and Business Disputes

WHEN SHOULD I CONSULT A LAWYER ABOUT A CONTRACT OR A BUSINESS DISPUTE? 

Whether you are an individual or you are a small business or a large company, having a lawyer review a contract before you sign it may save you time, money and aggravation down the road. Contracts often contain complex terms like indemnification, confidentiality, jurisdiction, and automatic renewal clauses that a lawyer can help you understand and negotiate. You want to make sure that: (1) you are getting what you bargained for; (2) your rights are protected; and (3) the contract is enforceable. If you already executed the contract but you now have a dispute with the other party, a lawyer can advise you what your options are, how to enforce your rights, and how to limit your own exposure on a counterclaim.

WHAT SHOULD I REMEMBER WHEN I NEGOTIATE A CONTRACT?

It sounds simple, but too many people think that negotiation is the same as confrontation when it is actually an accepted and appropriate business practice. Too many businesses and individuals accept the terms and conditions that are offered to them without considering other options. It is typical for the other side to expect to engage in a back and forth dialogue and to consider mutually acceptable alternative language. If you don’t ask, you will be stuck with provisions that you could have avoided with a simple telephone call. Having a lawyer draft, negotiate or review the contract could save you money in the long haul.  By the way, a severance agreement is a contract so make sure it says what you mean as well as what you want.

WHY SHOULD I NEGOTIATE A DISPUTE RESOLUTION CLAUSE?

If you have a dispute with the other party to your contract, you will want to avoid time consuming and expensive litigation. An important way to protect your business interest is to include a clause that requires both parties to first try to mediate their differences with a designated representative from each party to the contract within a specific time frame. If mediation is unsuccessful, you can then reserve the right to seek relief in arbitration rather than in the court system. You can arbitrate a dispute in much less time than the typical three years or longer that it takes to bring a case to a jury.

WHY SHOULD I CHECK THE TERMINATION LANGUAGE OF THE CONTRACT?

Some contracts automatically renew for another year if you do not provide written notice of cancellation within a specific time frame before the renewal date. If no one is tracking that notice date for you, you could miss the deadline and end up with an ongoing contractual payment for a service that may no longer be necessary. This is an easily negotiated term for which a competent attorney can provide guidance.

WHY IS IT SO IMPORTANT TO HAVE A WRITTEN RATHER THAN AN ORAL CONTRACT? 

Laugh if you will, but the old joke really is true: A verbal contract is not worth the paper it is written on. Sounds obvious, but if you don’t insist on specific terms and conditions in the contract itself, or what lawyers call “the four corners of the document”, you will face a serious hurdle to enforce what you believe are your rights. A “side agreement” is useless unless it’s incorporated by reference into the contract itself. Prior or subsequent agreements are not enforceable either unless they are specifically referenced in the contract. The party with whom you are negotiating may mean well and be an honorable person, but misunderstandings occur, and people change their minds. The only way a court can decide what the parties actually intended is to examine the contract itself.

Pamela A. Smith
Law Office of Pamela A. Smith
233 Needham Street, Suite 540
Newton, MA 02464
617-969-2900

pam@pamsmithlaw.com

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