November 28, 2020

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Massachusetts Wage Act: New Warning to Employers Everywhere

Massachusetts Wage Act May Extend to Employees Living and Working Elsewhere -- Out-of-State Employees May Sue Officers Personally for Mandatory Triple Damages, Attorneys Fees and Costs

A Massachusetts Superior Court judge recently extended the reach of the Massachusetts Wage Act – including its provisions for officer liability, mandatory triple damages, attorneys fees and costs – to an employee who lives and works in Florida. The judge found that the employee had “sufficient contacts” with Massachusetts during his employment, and was thus entitled to protection of its Wage Act.

In Dow v. Casale, a former sales employee of a small, failed Massachusetts company sued three former executives personally in Massachusetts, alleging they owed him more than $100,000 in commissions he earned prior to the company’s failure. The executives argued that Massachusetts law did not apply because the employee lived and worked in Florida. The court disagreed and held that the Wage Act “was designed to regulate the actions of Massachusetts employers, regardless of where their employees work.”

The judge found the following activities established “more than sufficient contacts” with the Commonwealth to afford the employee the protection of the its Wage Act:

  • The salesman conducted his business largely via the internet, which was paid for by the Massachusetts employer
  • His business cards listed the company’s Massachusetts address, phone number and fax number
  • He had customers in Massachusetts and visited them about 20 times over two years
  • He was in daily contact with his supervisor in Massachusetts
  • All sales paperwork was generated in Massachusetts
  • All customer purchase orders were sent to Massachusetts, invoices were then sent to customers from Massachusetts and customers sent their payments to Massachusetts

In light of this decision, out of state employers may want to consider taking steps to avoid the type of “sufficient contacts” with Massachusetts that might expose them and their officers to unfavorable liabilities and penalties under the Massachusetts Wage Act.

© 2020 McDermott Will & EmeryNational Law Review, Volume I, Number 305
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About this Author

Andrew C. Liazos Executive Compensation Attorney McDermott Will Boston
Partner

Andrew C. Liazos is a partner in the law firm of McDermott Will & Emery LLP based in the Firm’s Boston office. Andrew heads the Firm's Executive Compensation Group and the Boston Employee Benefits Practice.

Andrew regularly represents Fortune 500 companies, public companies, large closely held businesses and compensation committees on all aspects of executive compensation, ERISA fiduciary matters, employee benefits in business transactions and bankruptcy, and employee stock ownership plans. He also counsels executives in employment agreement and joint...

617 535 4038
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