But I Would Have Earned It – Treble Damages for Lost Wages
The Massachusetts Wage Act provides strong protections for employees, including, for example, making it unlawful for employers to withhold an employee’s wages, retaliate against an employee for seeking his or her wages, or have an employee – even if voluntarily – waive his or her right to wages. The Wage Act also contains harsh punishment for employers that violate the statute, including liability for three times the unpaid or lost wages, called “treble damages.” Given these penalties, what constitutes a “wage” under the statute is hotly contested.
In a recent decision, Parker v. Enernoc, Inc., the Massachusetts Supreme Judicial Court issued a broad definition of “wages,” and admonished other courts to keep in mind that the purpose of the Wage Act is “to protect employees and their right to wages.”
The Wage Act itself makes clear that “wages” include commissions that are “definitively determined” and “due and payable.” However, as the Court makes clear in the Parker case, payments that are “definitively determined [and] due and payable” are an example, not a limitation, on what commissions may be considered “wages” under the Act and, therefore, are subject to treble damages.
In Parker, the plaintiff closed a very large deal, which under the commission plan entitled her to two payments: the first immediately, and the second one year later. When the plaintiff raised concerns that her first payment was improperly low, she was fired, and as a result, she never received her second payment. A jury found that the plaintiff’s termination was in retaliation for seeking her wages, in violation of the Wage Act, and awarded the plaintiff the second payment. As the commission was not “due and payable” at the time of termination, the trial court did not award treble damages.
On appeal, the Supreme Judicial Court held that even though the second commission payment was not yet “due and payable,” it was still a wage under the Act. The Court stated plainly that “as a result of the retaliation, the plaintiff did not receive wages she otherwise would have received. Wages lost as a result of retaliation are trebled under the Wage Act.”
Furthermore, the Court rejected the employer’s argument that the plaintiff’s failure to satisfy the “continued employment” condition in the commission plan meant that the second commission payment was not a wage protected by the Act. The Court held that a “continued employment” condition cannot be “relied upon by an employer to create circumstances under which the contingency goes unfulfilled in order to deny a commission that otherwise would be due and payable to an employee.” Thus, if an employer fires an employee before a commission becomes due to avoid making payment, treble damages are likely available.
This decision contains strong language reinforcing an employee’s right to wages and reminding employers that harsh punishment may follow efforts to evade payment or retaliate against those that seek their wages. If you are owed money by your employer, there is no substitute for having your situation evaluated by experienced counsel.