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Law

A Road Map to Fairness

By Elaine Reall, Esq.

Managers, supervisors, and overworked HR professionals all face the specter of a sensitive workplace investigation from time to time. Allegations of illegal discriminatory behavior, workplace harassment and/or bullying, hostile-workplace assertions, or just straightforward favoritism based on a workplace romance between employees all regularly confront employers.

 

When to Investigate

The first question that employers need to ask is, does a formal or informal investigation need to take place? Not all workplace gripes or groans warrant an investigatory response.

Elaine Reall

Elaine Reall

“The first question that employers need to ask is, does a formal or informal investigation need to take place? Not all workplace gripes or groans warrant an investigatory response.”

For example, mandatory overtime in understaffed healthcare facilities is the subject of numerous complaints. And while it makes good employee relations sense to address such an issue, nothing in such a scenario rises to the level of warranting an investigation. However, if a formal or internal complaint indicates the possibility or probability of illegal discrimination, physical or emotional abuse, criminal misconduct, retaliation for whistleblowing, or OSHA-related safety or health issues, an employer would be wise to seriously consider initiating an investigation.

If an actual complaint exists (as opposed to vague rumors), prompt investigatory action is best practice, as it preserves evidence, prevents fading of witness memories, and demonstrates employer credibility. Yet, in a situation where only rumors and secondhand observations abound, an employer must weigh the pros and cons of pursuing an investigation without an actual complaint serving as an investigatory road map.

 

Who Should Investigate

Employers should begin by assessing the experience and background of managers and HR professionals working for the organization. Do such individuals have training and experience with internal workplace investigations? How critical is the confidentiality of information? Is there a high likelihood of legal action?

When considering inside versus outside investigators, consider this quick checklist:

• Do legal issues of document protection and privilege exist?

• Will the workplace benefit from a factual/credibility determination by a disinterested party?

• Evaluate the need for a general versus detailed findings/report.

• What is the likelihood of administrate agency (MCAD, etc.) or court action?

• Consider the need for professional demeanor.

• What is the value of inside managers/HR professionals being trusted in sensitive situations?

As a general rule of thumb, an experienced investigator (regardless of internal or external status) will be the most cost-effective.

 

Timing of Investigation

Prompt investigations are better investigations. Hoping that issues will simply go away is a surefire way for an employer to torpedo a strong result. Timely investigations deal efficiently with issues such as fresh witness memories, existing documentation, and lack of employee turnover. Investigatory urgency also lends a certain energy to the findings or report.

Unfortunately, employees often delay reporting serious issues and incidents to an employer for a variety of reasons. Often, the first evidence of a pattern of sustained harassment comes from information gathered during employee exit interviews. The best way to avoid this result is to actively encourage employees to report problems or concerns while they are still small (and fixable). The use of IT tools to make reporting of employee concerns simple and non-confrontational is a great adjunct to the traditional open-door complaint process used by many organizations.

 

Strategy, Strategy, Strategy

Nothing is more vital than extensive planning before starting a formal workplace investigation. Take all, or most, of the following actions:

• Gather and review relevant workplace documents;

• Read personnel files of potential witnesses and ‘suspects’;

• Do a deep Google dive on relevant parties;

• Do initial assessment of the nature of the complaint;

• Obtain legal advice about whether the subject matter may be legally privileged; and

• Outline the who, where, and why of the investigation (best investigator, best location for interviews, format for witness statements).

 

Limit Scope of Investigation

Finally, the workplace is not a judicial setting. Narrow the scope of your investigation to factual determinations. Examples: did X do/ask/physically touch, etc.? Did X violate employer policy? Do not introduce legal jargon or conclusions into the investigation. Example: don’t ask if someone created a hostile work environment.

 

Written Reports

Where a written report is appropriate or necessary, plain but detailed language is best for an investigator’s notes. Witness answers plus the investigator’s impressions and observations (example: tone of witness, loudness of response, marked body language) should be detailed.

Include specifics in the notes and in the final report. Outside third parties will view such detail as evidence of due diligence on the part of an employer. And, lastly, don’t depersonalize the report’s language; include actual names and identifying information (dates and times, locations, witnesses, and interview format [in-person versus Zoom]).

 

Written Versus Oral Report

If it has been a significant investigation, an employer needs to create a separate, stand-alone written report. Tip: do not file such a report in a regular employee personnel file. A distinct investigation file should be created. Written reports should not attempt to draw legal conclusions.

Consider notifying the complainant(s) and accused party of the general outcome of the investigation. Failure to do this almost always leads to such parties looking for answers outside the workplace, including talking with a lawyer.

Last, but never least, strive for a proper investigatory behavior and demeanor:

• Learn the value of silence and open-ended pauses;

• Don’t rush through questions;

• Ask a question and then actively listen;

• Remember to include open-ended questions to encourage witnesses to talk;

• Maintain a detached demeanor (avoid emotionally charged statements); and

• Absolutely avoid promises or guarantees.

 

Conclusion

Following the guidelines outlined above will help you create a solid investigatory road map. If you have any questions or concerns about the above policies, it is prudent to contact a labor and employment attorney so that the best investigatory practices can be followed and you can, hopefully, avoid unnecessary litigation.

 

Elaine Reall is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Law

Sensible Move or Overreach?

By Meaghan Murphy, Esq. and John Gannon, Esq.

Meaghan Murphy

Meaghan Murphy

John Gannon

John Gannon

Non-compete agreements have long been the subject of intense debate. Some view them as a critical way to protect confidential and proprietary business information, while others view them as stifling the rights of workers to freely change jobs.

Taking the latter view, last year, officials at the Federal Trade Commission (FTC) proposed banning the use of non-compete agreements in the workplace. Because non-compete agreements prohibit workers from moving to or starting competing businesses for a designated period of time, from the FTC’s perspective, restrictions on employee mobility disadvantage workers who are seeking to change jobs, while at the same time harm businesses looking to hire employees. The net result, according to the FTC, hurts the economy overall and violates the Federal Trade Commission Act, which prohibits businesses from engaging in unfair methods of competition.

Just a few weeks ago, the FTC officially moved forward with its plan to eliminate non-compete agreements when it issued a final rule that will ban non-compete agreements nationwide starting Sept. 4, 2024. The new rule will impact an estimated 30 million workers — approximately one in five workers in the U.S.

“The rule does not impact non-disclosure and confidentiality agreements or non-solicitation agreements unless they prohibit a worker from, penalize a worker for, or function to prevent a worker from seeking or accepting work or operating a business.”

In this article, we take a closer look at what is required by the new rule, legal challenges to the nationwide ban, and strategies for employers who have non-compete agreements currently in place.

 

What Does the Rule Actually Say?

Here are the most important things businesses need to know about the new rule slated to take effect on Sept. 4 of this year.

Employers are prohibited from entering into or attempting to enter into a non-compete agreement with any employees. Also, with one limited exception (discussed below), employers will not be able to enforce non-compete agreements currently in place. Further, there is an affirmative obligation on employers to provide clear and conspicuous notice to workers with existing non-competes that those agreements will not be enforced against them.

There is a ‘senior executive’ exception: for senior executives, which are defined as those in “a policy-making position” earning more than $151,164 annually, it is unlawful to enter into new non-compete agreements after Sept. 4, but current non-compete agreements for senior executives will be allowed to stay in effect even after the effective date of the rule.

The rule does not impact non-disclosure and confidentiality agreements or non-solicitation agreements unless they prohibit a worker from, penalize a worker for, or function to prevent a worker from seeking or accepting work or operating a business. In other words, as long as those agreements are not worded so broadly as to essentially be non-compete agreements, they are safe.

As is often the case, there are some exceptions to the rule. For example, the rule does not apply to workers at nonprofits. Non-competes between franchisors and franchisees are exempted, so any such agreements remain lawful to have or enter into in the future. The same goes for non-competes between the seller and buyer of a business.

 

Legal Challenges

Business advocacy groups have taken issue with the non-compete ban from the get-go, arguing that the FTC’s actions are classic government overreach. The U.S. Chamber of Commerce — which touts itself as the world’s largest business-association advocacy group — announced its intention to file a lawsuit to block the rule months ago.

The chamber emphasized that non-compete agreements are — and should continue to be —upheld or struck down under well-established state laws and, further, that such a broad rule applied to all businesses across all sectors is not appropriate for the FTC to implement unilaterally.

In addition to the Chamber of Commerce’s lawsuit, a global tax services and software provider based in Dallas (Ryan, LLC) is challenging the rule in a federal district court in Texas. According to that company, non-competes are a valuable tool for firms to protect their intellectual property and foster innovation, and the FTC rule would upend businesses’ ability to do both.

Several motions have been filed in that case, and the court has suggested that it will issue a ruling on the legality of the FTC’s rule soon. Whichever way that court decides, employers can expect the losing party to appeal the decision to the Court of Appeals. After that, it’s possible the U.S. Supreme Court will weigh in.

 

What Should Employers Do?

Employers should collaborate with legal counsel to review all existing non-compete agreements and assess whether they will pass muster under the new FTC rule. If a business determines that most (if not all) of its non-compete agreements will be unenforceable come Sept. 4, management needs to craft a new plan aimed at protecting customer goodwill and shielding sensitive confidential information from disclosure.

As noted above, for the most part, non-disclosure and confidentiality agreements and non-solicitation agreements are not affected by the FTC’s non-compete ban. When properly drafted, these agreements can achieve the same goals as a non-compete without running afoul of the new FTC rule.

Businesses should also monitor the status of the FTC’s rule. We expect courts will issue important rulings in the FTC non-compete rule litigation very soon. If those decisions leave the rule in place in its current form, employers may need to issue notices compliant with the rule to those workers that fall within its protections, as well as refrain from requiring non-competes be signed by any workers in the future.

 

John Gannon is a partner with Springfield-based Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on enforcing restrictive covenants and protecting trade secrets. Meaghan Murphy is an associate with the firm and specializes in labor and employment law; (413) 737-4753.

Law

The Decline of the Nuclear Family

By Julie A. Dialessi-Lafley, Esq.

 

Historically, a nuclear family (also known as an elementary family, atomic family, cereal-packet family or conjugal family), was the traditional family structure which is defined as a family group consisting of parents and their children (one or more), typically living in one home residence.

Statistically speaking, this is no longer the norm. In fact, 80% of households in the U.S. have a non-traditional family structure. Family structures that may be considered non-traditional or alternative include, but are not limited to, single-parent families (a single parent raises a child alone), cohabitation (an unmarried couple shares a household), same-sex families (two individuals of the same sex raise a family), grandparenting (grandparents raising grandchildren), and polygamy (marriage among at least three people).

Julie A. Dialessi-Lafley

Julie A. Dialessi-Lafley

“In the Baby Boom of 1960, there was one dominant family structure, with 73% of all children living in a family with two married parents in their first marriage. By 1980, 61% of children were living in this type of family, and today, less than half (46%) are in households with two married parents.”

Gay and lesbian households increased from 540,000 to 980,000 post-legalization of same-sex marriages, and multi-generational households have increased from 7 to 26%, which represents a 271% increase over a decade. The change in the common family structure from traditional to non-traditional happened quickly, and the laws have not moved as quickly to keep up with the times.

To highlight the change and how quickly it has taken place, consider that in the Baby Boom of 1960, there was one dominant family structure, with 73% of all children living in a family with two married parents in their first marriage. By 1980, 61% of children were living in this type of family, and today, less than half (46%) are in households with two married parents.

The formation of the non-traditional family, and the children that may result, can bring complex legal issues such as custody, visitation, child support, property division, estate planning, and constitutional issues, to name just a few of the most obvious ones. These are the legal issues only and do not even touch on social and emotional issues, which exist due to lack of understanding and/or acceptance in a society still rooted in traditional values.

 

Planning Is Paramount

Given how quickly the nuclear family has become the non-dominant family structure, one would think the members of non-traditional families would have all the resources they need available to them to address all the legal issues we face in our increasingly more complicated modern family society. Unfortunately, due to lack of concrete guidelines, non-traditional families are often forced to resolve these legal issues in a court process due to failure to understand the unique issues of their family structure or a lack of legal process.

By way of example, it is the unfortunate reality that some laws may not support the same federal estate or tax benefits in non-traditional households versus traditional ones. Federal benefits and retirement may not pass to non-married partners or same-sex spouses without actions taken specifically to designate beneficiaries. Proper tax planning and asset planning should be a priority in these households and relationships; however, these are areas often overlooked when dealing with the daily challenges of managing life and household dynamics.

When considering that most households have more than one income, likely have purchased real estate, have commingled assets, and may have blended families with children from other parents, non-married partners, or multi-generational households caring for children, the need to plan for the distribution of assets upon death is of paramount importance.

However, there is no specific, cookie-cutter estate plan for all non-traditional families to abide by. To ensure that property passes to your non-married partner, same-sex spouse, or non-biological and/or biological children, proper estate plans need to be put into place. These plans may include a will and trusts to ensure that goals of asset distribution are met upon a death.

In the same way, plans need to be put into place and properly documented to make sure that lifetime decisions such as health decisions, personal financial decisions, and end-of-life determinations can be made by your partner if not married, or by any person you chose. In the absence of estate planning, things may not be carried out as you would want them to be or by the people you would have selected had you taken the time to put a plan in place.

The non-traditional family should consider cohabitation agreements, prenuptial agreements, custodial agreements (if recognizable in your home state), as well as formal estate planning in order to protect themselves and their families in the event of a breakup, divorce, dissolution of a household, or death.

 

Seeking Answers

It can be difficult for partners or single parents to protect their rights as a family. There is no definitive answer to these challenges with custody and parenting arrangements. Many of the outcomes are fact driven and left to the discretion of a court when agreements cannot be reached by the parents or caregivers. When relationships break down, parties are less likely to be able to put the best interests of the children at the forefront in order to reach an agreement.

Does a non-married person who has raised a non-biological child automatically have parenting rights? Are they financially responsible for the child(ren)? Do grandparents who have been a caretakers to a grandchild get visitation if the child returns to the care of the biological parent? The answers are not as clear and obvious as you would think or hope they would be when considering the relationships that may have existed between children and caretakers of any kind.

The law, again, is fact-specific and gives great discretion to the courts in reaching a decision when parties cannot resolve these issues among themselves. Thus, while many partners find informal custodial arrangements and other systems work well for them, the majority face issues when problems arise.

Frequently, mainstream advice is given with traditional families in mind, which undoubtedly creates confusion for unconventional arrangements. All family units of any structure, but especially for certain non-traditional families, should consult knowledgeable family-law attorneys and financial professionals to develop the plans that best meet the unique needs of their chosen life.

 

Julie A. Dialessi-Lafley is a shareholder with the law firm Bacon Wilson, P.C. and chairs the firm’s Family Law department. She is a certified family law mediator, a member of the Springfield Women’s Leadership Council, a member of the United Way of Pioneer Valley board of directors, and is licensed to practice law in both Massachusetts and Connecticut; (413) 781-0560; [email protected]

Law Special Coverage

Such a Move Could Bring Order to Cannabis Control Commission

By Scott Foster, Esq. and Johannah Huynh

For business and civic leaders in Springfield, the appointment in 2004 of the Springfield Control Board remains a watershed moment in the city’s fiscal history.

Regardless of how one felt about the city being plunged into receivership by the Legislature through the appointment of the Control Board, the results were unmistakable, as the city went from having an annual budget deficit of $41 million in 2004 to having cash reserves of $34.5 million when the Control Board was disbanded in 2009. Springfield has continued to enjoy the fruits of the newfound fiscal responsibility with an ever-increasing bond rating since 2009.

Bruce Stebbins, a longtime resident of Western Mass., but then a recent resident, was elected to Springfield’s City Council in the midst of the Control Board’s tenure and had a ringside seat to the Control Board’s temporary reign over the city. He continued to serve on the council through the end of the Control Board and then became become Springfield’s Business Development administrator, reporting to the city’s chief Development officer.

Scott Foster

Scott Foster

Johannah Huynh

Johannah Huynh

Stebbins’ experience engaging with the Control Board and helping bring the city to financial stability may prove immensely valuable if the Massachusetts Office of the Inspector General (OIG), the top watchdog agency in Massachusetts responsible for preventing fraud and waste and abuse of public funds, get its wish.

In a recent six-page letter addressed to the Commonwealth’s top elected officials, the OIG strongly urged the Massachusetts Legislature to immediately appoint a receiver to run the day-to-day operations of the Cannabis Control Commission (CCC) while the Legislature concurrently reviews the CCC’s statutory governance structure.

Over the past two years, the CCC has been plagued by internal turmoil, which the OIG suggested is partially a result of the CCC’s enabling statute failing to clearly define or delineate the duties and responsibilities of the leadership hierarchy. The OIG’s recommendations for the Legislature to overhaul the governance structure seek to address the root of the CCC’s problems.

“Not only might the temporary appointment of a receiver allow the Legislature to resolve the CCC’s governance structure, but it could also better promote the efficiency of a regulatory body, which would be a welcome development for the hundreds of businesses that rely on the CCC’s oversight.”

Since the enabling statute is, according to the OIG, “unclear and self-contradictory with minimal guidance on the authority and differing responsibilities of the CCC’s commissioners and staff,” it’s surprising that the CCC has been able to oversee $322 million in tax and non-tax revenue in the most recent fiscal year.

The OIG was also concerned that, despite spending $160,000 on mediation services since May 2022 to draft a governance charter, the commissioners have yet to release meeting minutes relating to the discussion of the charter, publicly release a draft charter, approve the new charter, or even provide assurance that the mediation process is complete. Even if a governance charter were adopted, the OIG emphasized, such a charter would not have the force of law — only binding the CCC to the extent the commissioners agree.

 

Internal Strife

Acting CCC Chair Ava Callender Concepion has pushed back on the call for a receivership by citing the commission’s recently proposed blueprint of a governance structure in its final stages of legal review subject to a public meeting.

The ongoing lack of an official chair of the CCC was also cited by the OIG as an area of concern. Amidst the suspension of CCC Chair Shannon O’Brien by the treasurer since Sept. 14, 2023, the commissioners have disagreed on who held the appropriate authority to appoint Callender Concepcion to the role of acting chair. Just last month, the CCC voted to relieve the acting executive director, Debbie Hilton-Creek, of her day-to-day responsibilities, leaving the CCC without a duly appointed leader to oversee the operations of the agency.

Even in the absence of clarity on who has authority to do what, the OIG notes that compliance with the Open Meeting Law, which prohibits two or more commissioners from discussing matters outside of a publicly posted meeting, is simply impractical with respect to a large state agency overseeing day-to-day operations.

With such decentralization of management and ambiguous authority at the CCC, the OIG has stressed the urgency of appointing a receiver with the authority to manage the day-to-day operations of the CCC. Specifically, the OIG recommended that the receiver should be expressly authorized to both carry out the daily administrative functions of the CCC and carry out said functions notwithstanding any assertion of by the chair, acting chair, or commissioners under Chapter 76.

If the Legislature were to heed the OIG’s findings, the appointed receiver would have unchallenged authority to carry out the CCC’s administrative operations until the Legislature has resolved the CCC’s governing structure.

In this context, for an agency responsible for bringing in approximately $322 million in tax and non-tax revenue in FY 2023 alone, a receiver that was statutorily authorized to do what the CCC cannot, per the OIG, would be in the best interests of the cannabis industry, its consumers, and ultimately the constituents.

Not only might the temporary appointment of a receiver allow the Legislature to resolve the CCC’s governance structure, but it could also better promote the efficiency of a regulatory body, which would be a welcome development for the hundreds of businesses that rely on the CCC’s oversight.

 

Scott Foster is a partner at Bulkley Richardson in Springfield, and Johannah Huynh is a summer associate at the firm.

Law

Gainful Employment

By Abby M. Warren, Esq. and Virginia E. McGarrity, Esq.

 

Whether you are picking up a well-respected periodical or a celebrity newsmagazine, you cannot avoid reading about semaglutide injection drugs — drugs used to control blood-sugar levels for individuals with type-2 diabetes and weight loss.

‘Ubiquitous’ is the only word to describe the news coverage of these ‘miracle medications.’ As news has spread about these medications, their use has expanded far outside of Hollywood to individuals across the country, ultimately leading to a reported shortage. So, what impact, if any, does weight, weight loss, or the spread of such medications have on the workplace?

 

Weighty Considerations

First, studies have long concluded that discrimination based on appearance, including weight, occurs in employment and other areas of life and that it may disproportionally impact a specific group or groups of individuals. Likely in response to such evidence, effective Nov. 26, 2023, New York City passed a law protecting individuals who live in, work in, or visit the city from discrimination based on their height or weight regarding employment, housing, and public accommodations.

While New York City may be an early adopter of such a law, there may be more jurisdictions that follow this trend. Further, on the federal level, the Equal Employment Opportunity Commission has long taken the position that height and weight are generally unacceptable pre-employment inquiries as they may disproportionately impact employees of different protected characteristics. In short, weight has always impacted the workplace, including workplace decisions.

Second, there may be harassment or workplace bullying related to appearance, including weight. Harassment, whether sexual or based on other protected characteristics, can involve comments or actions related to the physical body and appearance. The same is true of bullying and targeting in the workplace. In today’s climate, where millions of employees are being prescribed or taking weight-loss drugs, this may include employees asking questions of a co-worker who has lost weight, asking whether a co-worker is taking a weight-loss drug, making judgmental statements, stigmatizing such individuals, and similar behavior.

While harassment and bullying related to appearance may not be new, such treatment based on the perception that an employee may be taking a weight-loss drug could be a more recent area with which human resources must grapple.

Third, workplace culture may be impacted by the recent focus on weight and weight-loss medications, and the level of such impact may depend on several factors. For example, the employer’s geographic location, the industry, the overall focus on health and wellness in the workplace, and the employer’s commitment to inclusivity and belonging may all impact how weight and height will be viewed, including using such weight-loss medications.

In light of these workplace considerations and the attention that these weight-loss medications have received in recent months, a number of employers have opted to implement clinical lifestyle programs and personalized weight-loss management plans. The goal of these programs is to reduce the number of employees who might benefit from weight-loss medications like Wegovy.

To the extent employers have control over their healthcare coverage (fully insured plans are typically subject to state insurance laws and individual determinations made by insurance carriers), the decision of whether to cover these weight-loss medications is a challenging one. While these drugs have potential for long-term improvement in the health of employees and can drive future cost savings for the health plan, the cost of covering them today may not align with budget constraints and sustained increases in healthcare spending over the long term.

For example, the current list price of Wegovy is more than $1,300 per month, and most patients take it indefinitely to maintain their weight loss. North Carolina recently announced it would no longer cover Wegovy and other similar weight-loss medications for its employees, estimating that such continued coverage would cause premiums to double for all employees (not just those who are taking the medications). While it is difficult to determine how many private-employer health plans are covering these weight-loss medications, it does not appear that such coverage matches the rampant surge in popularity these medications have experienced in the past year.

 

Advice for Employers

At this juncture in history, where celebrities, media, and the American public are hyper-focused on weight, including weight-loss medications, what actions can employers consider?

First, it is essential to continue fostering a positive and inclusive work environment that extends to weight, height, body shape, and appearance. Trainings, policies, town halls and education, and other visible commitments to such inclusivity can all support such a culture.

Second, businesses should establish specific training of managers, supervisors, and individuals involved in recruiting and hiring about weight and height discrimination and bias (including studies that have demonstrated the existence of this bias), and how these employees can foster an inclusive work environment, and remove any relevant barriers that may exist.

Lastly, employers may wish to review their current culture, policies, and benefits to determine if the employer is supporting the health and well-being of employees and their health journeys, and whether there are potential areas of improvement.

 

Abby Warren and Virginia McGarrity are partners at Robinson+Cole in Hartford, Conn. Warren is a member of the firm’s Labor, Employment, Benefits, and Immigration Group, while McGarrity is a member of the Employee Benefits and Compensation Group.

Law Special Coverage

Firm Resolve

Sean Buxton was talking about why he chose to join the Springfield-based law firm Bulkley Richardson, and what he’s found since he came on board not quite a year ago.

“It’s been an amazing experience,” said Buxton, who handles general commercial litigation and is currently doing a lot of work in the firm’s new office in Greenfield, referring specifically to being around — and being mentored by — seasoned attorneys with decades of experience.

“Just in the Litigation department alone, we have Sandy Dibble — I can’t even tell you how long he’s been practicing — and Mike Burke, too; they’re such valuable asssets,” he said. “In the legal field, you get this feeling sometimes that the problem you’re coming on is something you’re seeing for the first time and that no one’s ever dealt with this before. To have someone to go to and have them say, ‘that same exact circumstance hasn’t happened to me, but here’s what my instincts say’ and ‘here’s what I’ve experienced,’ that is so valuable.

“You can bounce ideas off so many people here and make sure that your decisions are informed not only by you and what you’ve learned, but by the instincts and experience of everyone around you,” Buxton went on. “And they’re just fascinating people; we have Judge [John] Greaney here, who sat on the Appeals Court and the Supreme Judicial Court, and Sandy as well; the stories they tell and the experiences they can relate … they’re great mentors.”

While the names of the older lawyers and mentors may have changed, and the exact words used to describe their impact may have changed as well, generations of lawyers who have worked at the firm have been saying pretty much the same things as Buxton.

“You can bounce ideas off so many people here and make sure that your decisions are informed not only by you and what you’ve learned, but by the instincts and experience of everyone around you.”

And that’s just one of many things the firm is celebrating as it marks its centennial this year in what could be described as quiet, poignant fashion (we’ll get back to that in a bit).

It’s taking place at a time of change in the business landscape, such as the rise of the cannabis industry, and at a time when many firms are smaller or have been merged into larger entities. Meanwhile, the firm’s ongoing commitment to the community has become a focal point of the centennial, said Managing Partner Dan Finnegan, who came on board in 1992.

“We wanted to celebrate all of the amazing work that has gone into supporting, celebrating, and engaging in the communities in which we live, work, and play through initiatives such as helping to feed the hungry and addressing food insecurity, supporting arts and culture, contributing funds to lifesaving healthcare and research organizations, and providing pro bono legal services to those in need, among many, many others,” he explained. “Members of the firm have contributed time, resources, and finances to help so many worthy causes over the past century, and we plan to continue that legacy.”

Dan Finnegan

Dan Finnegan says the firm’s commitment to the community has become a focal point of its centennial celebration.

Elaborating, he said the firm has launched a new campaign called ‘Be the Change.’ It will connect lawyers and staff with opportunities to engage with organizations in Western Mass. and beyond so they can act together to bring positive change.

The campaign was launched last fall, with a team of 50 from the firm taking part in the annual Rays of Hope breast-cancer walk. Other specific initiatives include a YMCA clean-up day on May 3, when attorneys and staff rolled up their sleeves and helped prepare Stony Brook Acres, a YMCA camp in Wilbraham, for a June opening; partnering with Greater Springfield YMCA to assist area boys and girls attend summer camp (the firm will send 16 youth campers to a YMCA-run camp this summer for one week); and a $10,000 donation to Baystate Health to purchase infusion chairs.

“Giving back to the community is one of the core values that differentiates us,” said Peter Barry, who joined the firm in 1982 and preceded Finnegan as managing partner, adding that this is one of many qualities and traditions that essentially go back to 1924.

For this issue and its focus on law, BusinessWest takes a look at 100 years of tradition, expansion, innovation, entrepreneurship, and giving back — and at how these traits will continue to define the firm moving forward.

 

Making Their Case

When asked how Bulkley Richardson intends to celebrate its centennial — beyond ‘Be the Change’ — Finnegan suggested that the annual holiday party “might be a little more robust this year.”

In most respects, though, it will be business as usual.

And it has been this way since 1924, when R. DeWitt Mallary became associated with the law firm of Frederick Wooden and Harold Small, located in an office at 387 Main St. in Springfield, several blocks south of where the firm is headquartered now, in Tower Square. Eventually, the firm would become Wooden, Small & Mallary.

Peter Barry

Peter Barry says the firm has had a noticeable impact on Springfield and surrounding communities over the years.

Mallary would later partner with Morgan Gilbert to form Mallary & Gilbert, and in 1934, J. Bushnell Richardson, a graduate of Springfield’s Central High School, Amherst College, and Harvard Law School, would join them, and in 1947, the firm became Mallary, Gilbert & Richardson.

In 1950, the firm was reorganized, with the law practice conducted in collaboration by two separate partnerships — Mallary & Gilbert, and Richardson Dibble & Atkinson, adding Norris Dibble and Robert Atkinson as partners. The firms practiced together in shared office space.

Fast-forwarding through the middle of the 20th century, Richardson Dibble & Atkinson merged with the firm of Gordon, Bulkley, Godfrey and Burbank in 1956, and the firm was renamed Bulkley, Richardson, Godfrey and Burbank. A year later, Robert Gelinas joined the firm, and in 1964, Godfrey left to form a partnership with Edwin Lyman. Matthew Ryan Jr., elected as district attorney, a part-time office in those days, joined Bulkley, Richardson, Godfrey & Burbank soon thereafter. And with Burbank’s departure in 1972, the firm was renamed Bulkley, Richardson, Ryan, and Gelinas.

In 1978, the district attorney’s role became full-time, and Ryan left the firm, whch was renamed Bulkley, Richardson, and Gelinas. By 1983, the firm consisted of 27 attorneys and was occupying a suite of offices at Baystate West, which later became Tower Square.

It is still there and recently renewed its lease, said Finnegan, so it will be there for a long while to come. Meanwhile, the firm recently opened a Greenfield location (it also has one in Hadley), and now consists of 40 attorneys and more than 30 staff.

“We work hard, and we provide quality service, but we’re pretty good at work-life balance and understanding that folks have to have lives outside of the office.”

That brings us to today, when the firm is marking what have remained constants through all those changes to the letterhead over the past 100 years — especially quality service to a wide array of clients across dozens of different specialities, and an environment where generations of lawyers have, as Buxton noted, worked together and mentored those new to the profession.

It is also marking change, including the contunuing expansion of its practice areas — there are now 32 of them, Finnegan noted.

“We’ve always been a full-service law firm, one of the biggest, if not the biggest, in the area,” he said. “And we’ve always been able to provide a wide array of services to clients.”

Within those 32 practice areas there have long been specific strengths, such as health law, said Barry, noting that the firm has long represented many of the region’s larger providers, as well as education, representing several colleges and universities.

Bulkley Richardson’s leaders say the firm was built on excellence and has maintained it through the decades.

But there have been important additions to the portfolio over the years as well, he went on, citing the broad realm of cyber law and service to the growing, changing cannabis industry as just two examples.

 

Continuing a Legacy

Barry, who has been with the firm for 42 of its 100 years, joined it just before it relocated from State Street to Tower Square, a big move and a rather large risk for the partners at the time, he said, adding that downtown Springfield was a much different place at the time.

And the firm has been involved in many of the changes that have taken place since, representing entities ranging from the Basketball Hall of Fame, which built its new home just over 20 years ago, to the Springfield Redevelopment Authority, which presided over the renovations that brought Union Station back to productive life after nearly 40 years of dormancy, to the Massachusetts Convention Center Authority, which operates the MassMutual Center.

“It’s nice to be able to drive around and say, ‘we were involved with that,’” Barry said, adding that the firm has also represented the Westover Metropolitan Development Corp. in its many endeavors in Chicopee and Ludlow and countless other clients as well.

Like Finnegan, Barry said many changes have come to the field of law and the firm over the past few decades, let alone the past century — everything from the demise of law libraries, with all that material now online, to the advent of depositons and other legal functions via Zoom.

What’s probably more important is what hasn’t changed — and won’t change, they said, especially the firm’s commitment to excellence as well as the environment that Buxton described earlier, one where lawyers and staff with wide ranges of experience and knowhow work together to generate positive results for clients while learning from each other.

In fact, both Barry and Finnegan used similar words and phrases to describe those who mentored them when they arrived four and three decades ago, respectively.

“I’ve had a lot of great mentors here,” said Barry, noting that he and others now serve as mentors to the younger atttorneys.

Finnegan said the firm has created a strong culture, one that has promoted many lawyers (he’s one of them), and staff members as well, who then spend their entire careers at Bulkley Richardson.

“That’s a testament to the culture of the firm,” he said. “We work hard, and we provide quality service, but we’re pretty good at work-life balance and understanding that folks have to have lives outside of the office.”

Looking ahead, Barry and Finnegan said the business plan is rather simple. It calls for continued growth and building upon the solid foundation laid in 1924.

“We’ve made a commitment to growth. Within the past few years, we’ve hired quite a few young lateral attorneys, as well as several attorneys right out of law school,” said Finnegan, adding that the firm has what he calls a rather robust summer associate program (he was one himself) that has served to help keep talent flowing through the pipeline. “We have a lot of young lawyers that we’ve hired over the past few years.”

“Overall, the firm has long managed to maintain an important mix of older attorneys, those in the middle of their careers, and those just joining the profession,” said Barry, adding that such a mix is critical to the ongoing success of any law firm.

Finnegan agreed, noting that this quality is one of many that have defined the firm since Warren Harding was in the White House, and will continue to do so moving forward.

“When I got here, the word I always heard was ‘excellence’ — this firm was built on excellence,” he said. “The firm has always been a collection of exceptional lawyers providing top-quality legal services to our clients. I don’t think that’s ever changed over the 100 years the firm has been in existence, nor is it going to change moving forward.”

Law Special Coverage

Challenging the Rule

By Trevor Brice, Esq.

 

On April 23, the Federal Trade Commission (FTC) issued a final rule banning non-competition agreements for all employees. While this action by the FTC was expected, there were many unanswered questions about the final impact of the non-compete rule in regard to existing non-compete agreements and its scope as applied to future non-compete agreements. These questions were answered under the final rule as promulgated.

 

Most Non-competition Agreements Banned

The FTC’s final rule banning all non-competition agreements is effective 120 days after its publication in the Federal Register. As of the effective date, all non-competition agreements are banned, with close to no exceptions, except for franchisor/franchisee relationships and for sales of a business between buyer and seller.

Independent contractors are also included under the umbrella of employees that would no longer be subject to non-competition agreements under the final rule. This would effectively mean that many employees in industries such as film, finance, and other professional services now have the right to switch between employers, which the FTC states “will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to the market.”

Trevor Brice

Trevor Brice

“The U.S. Chamber of Commerce has already vowed to block the rule, calling it ‘an unlawful power grab’ and arguing that the authority to govern non-competition agreements should be left to the states.”

However, and of note, the FTC does not have jurisdiction over nonprofit employers, so non-competition agreements are enforceable in this regard despite the FTC’s final rule.

 

Final Rule Retroactive as to Lower-wage Workers

In addition to prohibiting all non-competition agreements after the effective date of the final rule with limited exceptions, the FTC’s rule is retroactive, prohibiting certain non-competition agreements before the effective date of the rule as well.

Existing non-competition agreements can remain in effect as to senior executives, which are defined in the rule as employees in ‘policy-making positions’ making at least $151,164 per year. Existing non-competition agreements with employees who do not meet this definition are no longer enforceable per the final rule.

Despite the final rule, employers do not need to modify existing non-competition agreements by rescinding them. Employers do, however, need to notify their workers that the employer will not enforce non-competition agreements in the future. The FTC has included in its final rule model language for informing employees of this change, which can be communicated through email, text, or in paper format.

The final rule does not generally impact non-disclosure agreements or non-solicitation agreements unless they prohibit a worker from seeking or accepting work or operating a business. Employers should be aware that more restrictive state laws governing non-competition agreements remain in effect.

 

Challenges to Final Rule Looming

As of the announcement of the FTC’s final rule, challenges are already looming. The U.S. Chamber of Commerce has already vowed to block the rule, calling it “an unlawful power grab” and arguing that the authority to govern non-competition agreements should be left to the states.

The statement issued by the Chamber of Commerce goes on to note that, “since its inception over 100 years ago, the FTC has never been granted the constitutional and statutory authority to write its own competition rules. Non-compete agreements are either upheld or dismissed under well-established state laws governing their use.”

This announcement by the U.S. Chamber of Commerce will undoubtedly lead to other challenges through the court system. Indeed, a Dallas-based global tax-services and software provider has already filed suit against the Federal Trade Commission over the impact of the final rule.

The FTC, as the Chamber of Commerce rightly points out, has no authority to write its own competition rules. The FTC can, however, make rules if it goes through the proper rule-making process, including introducing proposed legislation and leaving it open to comment for a certain amount of time, which did occur here.

However, even following this process does not ensure that the rule will stand. The rule still remains open to court challenges from the Chamber of Commerce, individuals, or organizations affected by the rule or any other stakeholders within the final rule. This could mean that changes would be on the horizon for the rule, and possibly a narrowing of its already expansive application.

 

Takeaways

As noted, the FTC’s final rule is already being challenged through the court system, and a challenge from the Chamber of Commerce will most likely follow suit. Therefore, if an employer has existing non-competition agreements, the employer may not need to rescind them just yet.

Further, if employers are intending to enter into non-competition agreements that are reasonable and enforceable under existing state laws, other options, such as non-disclosure agreements and non-solicitation agreements, may have to be used, but it would be prudent to wait on further ruling from the existing challenges to the final rule.

In the meantime, consultation with an attorney will aid in navigating the changing landscape of non-competition agreements.

 

Trevor Brice is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Law

Prepare for Compliance

By David A. Parke, Esq.

 

The new reporting rules that became effective Jan. 1, 2024, under the federal Corporate Transparency Act (CTA) now require many small businesses and other entities to file reports with the U.S. Financial Crimes Enforcement Network (FinCEN). FinCEN estimates there are more than 30 million entities that are subject to these reporting rules on their effective date.

The CTA is intended to provide law enforcement with a means to combat crimes, like money laundering, that are aided through the use of shell companies. The CTA applies to ‘domestic reporting companies’ and ‘foreign reporting companies,’ as defined in the rules. This article will focus on domestic reporting companies.

Under the CTA, a reporting company, subject to the CTA, must file information with FinCEN regarding itself and its beneficial owners. For a reporting company formed on or after Jan. 1, 2024, the company must also report information regarding the individuals who created the company. Any changes to previously reported information must also be reported in a timely manner to FinCEN. The rules specify the information that must be reported about a reporting company and its beneficial owners and company applicants.

David A. Parke

David Parke

“The CTA is intended to provide law enforcement with a means to combat crimes, like money laundering, that are aided through the use of shell companies.”

A domestic reporting company under the CTA is any corporation, limited-liability company, or other entity created by filing a document with the secretary of State or a similar office under the law of a state or Indian tribe, unless exempt. There are 23 categories of entities that are exempt from reporting. The exemptions include highly regulated entities like issuers of securities registered under Section 12 of the Securities Exchange Act of 1934, banks, insurance companies, regulated public utilities, and certain tax-exempt organizations. Many small entities are likely not covered by an exemption and will need to report. The rules define more specifically the conditions of each exemption.

One exemption is for a ‘large operating company,’ as defined in the rules. This is a company that employs more than 20 full-time employees in the U.S., has an operating presence at a physical office within the U.S., and has more than $5 million in annual gross receipts or sales, excluding gross receipts or sales from sources outside the U.S., according to the company’s federal income-tax return for the previous year.

A ‘beneficial owner,’ whose information must be reported to FinCEN, is any individual who exercises substantial control over the reporting company or who owns or controls, directly or indirectly, at least 25% of the ownership interests of the reporting company. The reporting rules address various types of direct or indirect control or ownership arrangements under which an individual would be a beneficial owner.

An individual would be included as a beneficial owner if that individual is a ‘senior officer,’ which includes the president, chief financial officer, general counsel, chief executive officer, chief operating officer, or any other officer who performs a similar function. The rules also include as a beneficial owner any individual who has authority over the appointment or removal of any senior officer or a majority of the board of directors or similar body, or has substantial influence over important decisions, including decisions of the type enumerated in the rules.

A ‘company applicant,’ whose information must be included for a domestic reporting company created on or after Jan. 1, 2024, is an individual who files the document that creates the company, and the individual who is primarily responsible for directing or controlling the filing where more than one individual is involved.

Any domestic reporting company created before Jan. 1, 2024, must file its initial report with FinCEN by Jan. 1, 2025. Any domestic reporting company created during 2024 must file within 90 days. Any domestic reporting company formed on or after Jan. 1, 2025 must file within 30 days. The deadlines are measured from the earlier of actual or public notice that creation is effective. If there is a change in any information previously reported to FinCEN regarding a reporting company or its beneficial owners, an updated report must be filed with FinCEN within 30 days.

FinCEN has an E-filing website for reporting information (boiefiling.fincen.gov), and charges no filing fee. FinCEN has also published a Small Entity Compliance Guide and Frequently Asked Questions to provide guidance regarding the CTA reporting rules. FinCEN allows for use of a FinCEN identifier, which is a unique number assigned by FinCEN to an individual who applies for such a number and submits the information required of a beneficial owner or company applicant. The reporting company’s report may include the FinCEN identifier in lieu of the information otherwise required for the individual.

The consequences of non-compliance can be significant. It is unlawful under the CTA for any person to willfully provide or attempt to provide false or fraudulent beneficial ownership information to FinCEN, or to willfully fail to report complete or updated beneficial ownership information to FinCEN. Under the CTA, violators are liable for a civil penalty of not more than $500 for each day the violation continues, and may be fined not more than $10,000, imprisoned for not more than two years, or both.

An entity that is or may become a reporting company should consider establishing an internal compliance program to identify reportable changes and assure that the necessary information is received in a timely manner. A company should also consider if any changes should be made to its governance documents to require beneficial owners to provide (again, in a timely way) the information needed for the reporting company to comply with its CTA reporting obligations.

These new reporting requirements will affect many entities. It is important for companies to inform themselves of the CTA’s requirements, determine if the CTA applies, and prepare for compliance.

 

David A. Parke is a partner in the Business/Finance department at Bulkley Richardson.

Law

Unmarried Parents Are Still Parents

By Julie A. Dialessi-Lafley, Esq.

 

More and more frequently, people are opting not to get married, but are still desirous of having children and becoming parents, whether or not they are in a committed relationship with their partner. The decision to have a child or children creates a permanent connection to the other parent, regardless of the marital status of the parents.

Unmarried parents have various types of relationships. We see unmarried parents that live together, some have separate households but spend time together, and many are not together any longer and may have new relationships. The unmarried parents need to navigate how to bring up their child together while being apart. This requires that both parents understand that the other parent has a right to be in the life of the child. The law supports the idea that fathers and mothers both have the right to parent their children, even if unmarried.

Emotions of the parties often cloud their judgment when considering the role of the other parent in the life of the child. Did the parties break up? Has one person (or both) moved on? Was the relationship short-term without commitment and lacking a foundation between the parents? The history of the relationship is certainly impactful on the parent; however, first and foremost, parents need to be reminded that fathers need to be responsible, present, and cooperative with the mothers of their children, and mothers need to encourage, support, and accept the relationship a child has with their father.

 

The Child’s Best Interest

The standard in the Commonwealth of Massachusetts to determine a parenting plan and custodial relationship with children and parents starts with a best-interest standard. The presumption is that both parents should play a role in the life of a child unless it is not in the child’s best interest. It is often difficult for a parent to separate their feelings about the other parent when trying to determine the parenting relationship. It is clear, however, that simply because someone is not a good partner does not mean they should not be in the life of their child.

Julie A. Dialessi-Lafley

Julie A. Dialessi-Lafley

“First and foremost, parents need to be reminded that fathers need to be responsible, present, and cooperative with the mothers of their children, and mothers need to encourage, support, and accept the relationship a child has with their father.”

When parents are not married, the law provides that, absent an agreement or court order otherwise, the mother has sole legal and physical custody of the child. This is rebuttable and is not intended to prevent fathers from having equal footing in the lives of their children.

More times than not, with good communication, the parents can develop a parenting plan that provides for both parents to be involved in the legal decision making for the major medical, educational, and religious decisions of the child. This is what is known as legal custody. Parents can agree to share legal custody and make these major decisions together.

If they are unable to agree, a court may order shared legal custody if a history of the parents being able to work together to make these decisions can be demonstrated. Even if the court does not order shared legal custody, both parents still have the right by statute to have access to the medical and educational information and records of the child. It does not mean that a parent is excluded from knowing these things about their child.

There are always exceptions that need to be considered, such as domestic violence or history of restraining orders, which impact the ability of the court to grant certain relief if the parents are unable to agree.

It is worth reiterating that, if the parents are able to put their feelings about the relationship with the other parent aside and focus on the child, they can in most circumstances — if certainly not every one — develop a parenting relationship where both parents can be involved in the child’s life.

Parenting plans that deal with the actual parenting time the parties spend with the child should include the normal parenting plan, a holiday schedule, and vacation schedule, so that there is a clear plan for each parent’s time with the child. The location of pick-up and drop-off of the child, the specific time for exchange of the child, and who may transport the child are critically important in developing the parenting plan. Being clear and specific with these terms may create a plan that will reduce conflict between the parties when they may not both have the same philosophy about co-parenting with the other parent.

Parenting plans should also deal with child support, health insurance, uninsured medical expenses, extracurricular activities and payment of those expenses, education of the child, and the primary residence of the child, at a minimum.

The parenting plan also can include terms around communication. Communication is key, and throughout the child’s life, there are going to be countless times when the parents will need to discuss or exchange information with the other parent, make a decision together, or attend parent-teacher conferences, activities, or countless different life events.

A method of communication can be defined, such as through text, a parenting application which tracks communication, or through parent meetings on a scheduled basis. Regardless of the method, it is often key to successful co-parenting for there to be set rules as to where, when, and what the parents talk about.

By agreement, parents can include terms around phone calls or video calls with the child, as well as any other contact they want to have in between their parenting time. Language that fosters a positive and supportive parenting relationship between the child and the other parent can be included by agreement of the parents to prevent disparaging, disrespectful discussions.

 

The Court as a Last Resort

If the parents are unable to agree on how to develop a parenting plan, the court ultimately has the jurisdiction to make the decision. The court will do its job, but most every judge will encourage the parents to come to an agreement if they are able to do so, as they know their child better than anyone.

If the court is ultimately the decision maker, the court will consider the age and developmental stage of the child, the individual needs of the child, the history of the relationship between the parents, how close the parents live to each other, the parents’ work schedule, and problems such as substance abuse, domestic violence, child abuse, or a criminal record.

Naturally, this is not the exhaustive list, and the topics of this article are general. When navigating these issues, you should seek advice of an attorney in order to understand all the issues that need to be addressed and understand your rights as a parent.

 

Julie A. Dialessi-Lafley is a shareholder with the law firm Bacon Wilson, P.C. and chairs the firm’s Family Law department. She is a certified family law mediator, a member of the Springfield Women’s Leadership Council, a member of the United Way of Pioneer Valley board of directors, and is licensed to practice law in both Massachusetts and Connecticut; (413) 781-0560; [email protected]

 

Law

Walking a Fine Line

By Trevor Brice, Esq.

 

As Massachusetts employers know, one of the best defenses to a discrimination or retaliation suit is to implement preventive measures. One of the most commonplace of these preventive measures is anti-harassment training courses for the workforce that can show the employer is in compliance with state and federal law.

However, a recent case shows that this preventive measure, while it is virtually always a helpful addition to an employer’s preventive measures against discrimination and retaliation, can go too far if not managed or implemented properly.

 

Anti-harassment Training Can Benefit the Workplace

Generally, anti-harassment training is a helpful addition the employer’s tool chest for preventive measures against discrimination and harassment. It gives employees the tools to be able to identify situations in which employees are harassed, discriminated against, and/or retaliated against; identify the classes upon which discrimination, harassment, and retaliation are illegal; and utilize the employer’s reporting procedures to prevent further discrimination, harassment, and retaliation when it is identified.

When deployed properly, anti-harassment training has the effect of creating, at the very least, a discussion in an educational environment about the influence of discrimination, harassment, and retaliation within the workplace.

“Generally, anti-harassment training is a helpful addition the employer’s tool chest for preventive measures against discrimination and harassment.”

Anti-harassment training also makes for an open forum in which employees can learn basic concepts that will make for a safer and inclusive environment that will help to prevent illegal discrimination, harassment, and retaliation. The court in the recent case of De Piero v. Pennsylvania State University acknowledged the positives in anti-harassment trainings, stating that “training on concepts such as ‘white privilege,’ ‘white fragility,’ implicit bias, or critical race theory can contribute positively to nuanced, important conversations about how to form a healthy and inclusive working environment.”

 

Anti-harassment Training Can Create a Hostile Work Environment

However, the court in De Piero also pointed to a more novel concept, that anti-harassment training can make for a hostile work environment. The plaintiff in De Piero sued on the hostile work environment theory, stating that he had to attend at least five conferences or trainings that discussed racial issues in “essentialist and deterministic terms, ascribing negative traits to white people or white teachers without exception and as flowing inevitably from their race.”

In order to prove hostile work environment, the plaintiff had to prove that he suffered intentional discrimination because of his protected status; the discrimination was severe or pervasive, it detrimentally affected him, and it would detrimentally affect a reasonable person in like circumstances (Castleberry v. STI Grp.).

In this case, the defendant employer moved to dismiss the plaintiff’s complaint, stating that the anti-harassment training did not create a severe or pervasive work environment and that it did not interfere with the plaintiff’s work performance.

However, the plaintiff succeeded, with the court ruling that the plaintiff had pled sufficient facts to go forward with his hostile work environment claim. Specifically, the court stated that the plaintiff “was obligated to attend conferences or trainings that discussed racial issues in essentialist or deterministic term, ascribing negative traits to white people or white teachers without exception.”

The court pointed out a training in which the trainer in the anti-harassment conference forced the plaintiff and other white and non-Black people to hold their breath longer to feel pain. It is this and other examples from the defendant’s anti-harassment training that led the court to conclude that the plaintiff’s hostile work environment claim could survive.

 

Conclusion

While the De Piero decision points to how employers can have possible liability when implementing preventive measures, employers should not abandon anti-harassment training and other preventive measures. The court specifically stated that anti-harassment training can aid employers and that “discussing in an educational environment the influence of racism on our society does not violate federal law.”

The takeaway from the De Piero decision is therefore not to eliminate anti-harassment training, but to instead emphasize that the communication and substance of these trainings matter and that anti-harassment trainings can violate federal law if not implemented properly. If employers have questions or concerns about their anti-harassment training following this decision, it is prudent to contact employment counsel.

 

Trevor Brice is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Law Special Coverage

New Year, New Protections

By John S. Gannon, Esq.

 

Last month, the U.S. Department of Labor (DOL) issued a final rule that provides businesses with guidance to be used when evaluating whether a worker should be classified as an employee or an independent contractor under the Fair Labor Standards Act (FLSA). The DOL is also expected to issue a final rule that will extend overtime protections to an estimated 3.6 million salaried workers who are currently exempt under the law. Read on for more details about both of these developments.

 

Employee or Independent Contractor?

There are lots of reasons why a business would want to classify an individual as an independent contractor instead of an employee. For starters, employees are entitled to minimum wage and overtime pay protections, while independent contractors are not.

Moreover, Massachusetts employees are afforded rights and protections under the state Paid Family and Medical Leave program and the Earned Sick Time Law. Employees can also take advantage of workers’ compensation benefits when they are injured on the job, and typically can collect unemployment if they lose their job. Independent contractors do not get these benefits.

As a result, agencies like the DOL and the Massachusetts Attorney General’s Office consider misclassifying employees as independent contractors to be a serious problem. To combat this, DOL recently released guidance that explains how to analyze whether a worker is an employee or independent contractor under the FLSA.

The new rule is generally considered more employee-friendly than previous guidance, and it looks at the ‘economic realities’ of the working relationship. If the economic realities show that the worker is economically dependent on the employer for work, then the worker is an employee. If the economic realities show that the worker is in business for himself or herself, then the worker is an independent contractor.

The following factors are used to guide the assessment of whether a worker is an employee under the FLSA or an independent contractor in business for himself or herself:

• Opportunity for profit or loss depending on managerial skill. If the worker has no opportunity for profit or loss in connection with the project they are working on for the business, they are probably not in business for themselves, and therefore employee status is suggested.

• Investments by the worker and the employer. This factor looks at whether the individual uses their own tools/equipment and the labor of others to further a true business. If these investments are being made, it suggests the worker is an independent contractor.

• Permanence of the work relationship. Independent-contractor relationships are typically set for a defined period of time, or until a project is finished. If the relationship is continuous/indefinite in duration, it suggests an employee-employer relationship.

• Nature and degree of control. Independent contractors set their own schedules free from supervision by their clients or customers. Conversely, if the worker is being supervised and has a set schedule, employee status is suggested.

• Whether the work performed is integral to the employer’s business. This factor looks at whether the work is critical, necessary, or central to the potential employer’s principal business, which indicates employee status. Where the work performed by the worker is not critical, necessary, or central to the potential employer’s principal business, this indicates independent-contractor status.

• Skill and initiative. The focus here is on whether the worker uses their skills in connection with business initiative. If the worker does, that indicates independent contractor status; if the worker does not, that indicates employee status.

Proper classification of workers is of critical importance to employers. As explained above, when an employer misclassifies an employee as an independent contractor, the worker cannot take advantage of numerous workplace protections afforded to employees. This can lead to significant administrative penalties for businesses, not to mention costly misclassification lawsuits. When the classification analysis is a close call, employers should consult with their employment counsel prior to making the determination to avoid costly mistakes.

 

New Overtime Protections for Millions of Employees

Last fall, the DOL announced a proposed rule that would increase the salary threshold for exemptions from minimum wage and overtime pay requirements under the executive, administrative, or professional exemptions — otherwise known as the EAP exemptions.

As a reminder, in order to qualify for an EAP exemption, employees generally must be paid a salary of at least $684 per week ($35,568 annually). The DOL’s proposed rule would raise the current minimum weekly salary threshold for exempt employees to $1,059 per week, which amounts to $55,068 annually. In short, this means that most employees with a salary of less than $1,059 per week will soon be entitled to overtime when working more than 40 hours in a workweek.

The DOL’s proposed salary threshold rule would also automatically update these earnings thresholds every three years. We expect the rule will be finalized in April, and may go into effect as soon as June. With the 2024 presidential election approaching, the Biden administration will want to finalize this rule as soon as possible to avoid a new administration rescinding the rule.

 

Bottom Line

We encourage clients to take a proactive, preventive approach to wage and hour laws. Consider having your compensation practices audited by experienced counsel to be sure your business is not mistakenly classifying employees as independent contractors. Also, an audit will help spot overtime exemption problems before litigation ensues.

 

John S. Gannon is a partner with Skoler, Abbott & Presser, P.C., one of the largest law firms in New England exclusively practicing labor and employment law. Gannon specializes in employment litigation and personnel policies and practices, wage and hour compliance, and non-compete and trade-secrets litigation; (413) 737-4753; [email protected]

Law

A Brave New Year

By Lauren C. Ostberg, Esq. and Michael McAndrew, Esq.

 

Artificial intelligence — specifically, natural-language chatbots like ChatGPT, Bard, and Watson — have been making headlines over the past year, whether it’s college writing teachers’ attempts to avoid reading machine-generated essays, the boardroom drama of OpenAI, the SAG-AFTRA strike, or existential anxiety about the singularity.

On the frivolous end of the spectrum, one of the authors of this piece used ChatGPT to find celebrity lookalikes for various attorneys at their firm, and learned that ChatGPT defaults to the assumption that, irrespective of race or gender or facial features, most people (including Lauren Ostberg) look like Ryan Reynolds. On the more serious end, the legislatures of state governments, including those in Massachusetts and Connecticut, have labored over bills that will harness, regulate, and investigate the power of AI.

Lauren Ostberg

“The legislatures of state governments, including those in Massachusetts and Connecticut, have labored over bills that will harness, regulate, and investigate the power of AI.”

In Massachusetts, for example, the Legislature is considering two bills, one (H.1873) “To Prevent Dystopian Work Environments,” and another (S.31) titled “An Act Drafted with the Help of ChatGPT to Regulate Generate Artificial Intelligence Models Like ChatGPT.” The former would require employers using any automatic decision-making system to disclose the use of such systems to their employees, and give employees the opportunity to review and correct the worker data on which those systems relied. The latter, sponsored by Hampden County’s state Sen. Adam Gomez, aims to regulate newly spawned AI models.

While the use of AI to draft S.31 is, in its own right, an interesting real-world application of AI, the use of AI in this way is not the only important part of S.31, which proposes a regulatory regime whereby “large-scale generative artificial intelligence models” are required to register with the attorney general. In doing so, AI companies would be required to disclose detailed information to the attorney general, including “a description of the large-scale generative artificial intelligence model, including its capacity, training data, intended use, design process, and methodologies.”

In addition to requiring the registration of AI companies, S.31 (if passed) would also require AI companies to implement standards to prevent plagiarism and protect information of individually identifiable information used as part of the training data. AI companies must “obtain informed consent” before using the data of individuals. To ensure compliance, the bill gives the AG enforcement powers and grants it the authority to propound regulations that are consistent with the bill.

While S.31 provides robust protections against using data garnered from citizens of the Commonwealth in programming AI models, it may fail because of the amount of disclosure required from AI companies. As part of a new and fast-moving field, AI companies may be hesitant to disclose their processes, as is required by S.31.

Michael McAndrew

Michael McAndrew

“This proposed legislation is, of course, just the beginning of government’s attempts to grapple with the ‘responsible use’ (an Orwellian term, if ever there was one) of AI and technology.”

Though commendable in its effort to protect creators and citizens, S.31 may ultimately drive AI-based businesses out of the Commonwealth if they fear that their competitively sensitive AI processes will be disclosed as part of the public registry envisioned by S.31. However, the structure of the proposed registry of AI businesses is currently unclear; only time will tell how much information will be available to the public. Time will also tell if S.31 (or H.1873, referenced above) makes it out of committee and into law.

Meanwhile, in Connecticut

This past June, Connecticut passed a law, SB-1103, that recognizes the dystopian nature of the government using AI to make decisions about the treatment of its citizens. It requires that — by, on or before Dec. 31, 2023 — Connecticut’s executive and judicial branches conduct and make available “an inventory of all their systems that employ artificial intelligence.” (That is, it asks the machinery of the state to reveal itself, in part.)

By Feb. 1, 2024, the executive and judicial branches must also conduct (and publicly disclose) an “impact assessment” to ensure that systems using AI “will not result in unlawful discrimination or a disparate impact against specified individuals.” ChatGPT’s presumption, noted above, that every person is a symmetrically faced white man would be much more serious in the context of an automated decision-making system that impacts the property, liberty, and quality of life of Connecticut residents.

This proposed legislation is, of course, just the beginning of government’s attempts to grapple with the ‘responsible use’ (an Orwellian term, if ever there was one) of AI and technology. Massachusetts has proposed the creation of a commission to address the executive branch’s use of automated decision making; Connecticut’s new law has mandated a working group to consider an ‘AI Bill of Rights’ modeled after a federal blueprint for the same. The results — and the inventory, and the assessments — remain to be seen in the new year.

 

Lauren C. Ostberg is a partner, and Michael McAndrew an associate, at Bulkley Richardson, the largest law firm in Western Mass. Ostberg, a key member of the firm’s intellectual property and technology group, co-chairs the firm’s cybersecurity practice. McAndrew is a commercial litigator who seeks to understand the implications and risks of businesses adopting AI.

Law

Dispelling Medicaid Myths

By Hyman G. Darling, Esq.

 

It seems like every day a client tells me they are going to protect their assets from long-term care expenses by making a gift of $10,000 to their children. If this writer got paid every time a client misspoke about this rule, he quite possibly could be retired.

First of all, the amount a person can gift to a child or another person on an annual basis is $17,000 per year without having to file a gift tax return. ($18,000 in 2024). Any amount over this annual amount will require a gift-tax return to be filed, but at the current time, the exclusion of the gifts is $12.92 million ($13.61 million in 2024). Therefore, most people should not be concerned about limiting a gift to $18,000.

Hyman Darling

Hyman Darling

“If the person has an interest is protecting assets from long-term care expenses, they can make gifts five years prior to needing care, give a child a remainder interest in a house, create an irrevocable trust (also a five-year lookback), or purchase a long-term care policy or hybrid policy.”

Again, this is only a tax rule, not a Medicaid rule. Any amount that is given to a person triggers a five-year waiting period, which means basically that the amount of the gift, whether it is $5 or $500,000, carries with it a five-year look-back. The donor will not be qualified for Medicaid benefits until either the five years is lapsed or all of the funds transferred are utilized for the benefit of the donor. There is no threshold for a de minimis amount that may be given without triggering the look-back. Some states even question and disqualify Christmas, anniversary, and birthday gifts.

Here is a relatively short list of permissible expenditures that do not normally disqualify a person for Medicaid eligibility, although these amounts may vary from state to state:

• $2,000 personal-needs account;

• Pre-paid burial account;

• $1,500 burial account earmarked specifically for funeral and related expenses;

• Purchase of any necessary medical equipment;

• Payment of expenses of a home while a person is living there;

• A home while the person is living in it (with a limit on equity in some states);

• Personal belongings and household goods; or

• One car.

All other assets, including jointly owned bank accounts, CDs, retirement plans, revocable trusts, second cars, second residences, value of life insurance, U.S. savings bonds, etc., are countable and will have to be spent on a person’s long-term care. Unless a person (usually a child) can prove that they contributed to the parent’s accounts, these assets are not protected as the account will be deemed to be owned 100% by the parent, and thus counted as long-term care assets.

Of course, there are many exceptions to the rules, such as having a minor child, a disabled child, or a child who is blind.

If the person has an interest is protecting assets from long-term care expenses, they can make gifts five years prior to needing care, give a child a remainder interest in a house, create an irrevocable trust (also a five-year lookback), or purchase a long-term care policy or hybrid policy. If a person is not interested in these options, then the decision is to take their chances and hope they are never institutionalized.

While this article is repetitive of prior articles, hopefully the annual exclusion rule for taxes will be understood by more people so that the misinformation will not continue to be spread. There is no substitute for good legal advice from a qualified elder-law attorney when considering any Medicaid or tax-planning strategy or transfer.

 

Hyman Darling, a shareholder at Bacon Wilson and chair of the firm’s estate-planning and elder-law department, is recognized as the area’s preeminent estate planner, with extensive experience with all aspects of estate planning, trusts, tax law, probate and estates, guardianships, special-needs trusts and planning, elder law, and long-term care planning, and additional specialties including adoption and real estate; (413) 781-0560.

Law Special Coverage

Guilty by Association

By Trevor Brice, Esq.

Under the Americans with Disabilities Act (ADA), employers are required to provide reasonable accommodations to qualified individuals with disabilities who are employees or applicants for employment. However, the ADA does not require an employer to assist — or in other words, accommodate — a person without a disability due to that person’s association with someone with a disability.

Still, an employer cannot discriminate against an employee or applicant because of that person’s association with someone with a disability. This is what is called ‘associational discrimination,’ which, in the below case, was due to another’s disability under the ADA.

On Sept. 19, 2023, the U.S. Equal Employment Opportunity Commission (EEOC), announced that it had sued a private school for associational discrimination under the ADA. According to the EEOC’s announcement, the school allegedly discriminated against one of its teachers by refusing to renew her contract over her daughter’s disability.

Trevor Brice

Trevor Brice

“An employer cannot discriminate against an employee or applicant because of that person’s association with someone with a disability. This is what is called ‘associational discrimination.’”

This was “precisely the kind of conduct the ADA’s associational-discrimination provision was intended to prohibit,” said Rosemarie Rhodes, EEOC’s Baltimore Field Office director. On Dec. 15, the EEOC announced that the matter had been settled for just over $85,000 by the private school, with the school to pay $50,858 in back pay, $4,428 in interest on the back pay, and $30,000 in non-wage damages.

This settlement brings associational-discrimination enforcement into the limelight and presents more scenarios for employers to look out for and train their employees on for the new year.

 

Associational Discrimination and the ADA

Associational discrimination based on another’s disability requires “that (1) the employee was qualified for the job at the time of the adverse employment action, (2) that the employee was subjected to an adverse employment action, (3) that the employer knew at the time of the adverse employment action that the employee had a relative or associate with a disability, and (4) that the adverse employment action occurred under circumstances raising a reasonable inference that the disability of the relative or associate was a determining factor in the employer’s decision” (Carey v. AB Car Rental Servs. Inc.).

The EEOC, in its announcement, stated that the school was aware of the teacher’s daughter’s disability and that it decided to not renew the teacher’s contract because it assumed (without investigation, or even asking the teacher) that her daughter’s disability, coupled with the COVID-19 pandemic, would undermine the teacher’s focus and commitment to her job. The school instead decided to renew the contracts of other teachers who had less experience and tenure than the teacher whose daughter had a disability.

In its complaint, the EEOC pleaded the requirements of an associational-discrimination claim based on disability through the circumstances described in its announcement. The teacher performed her job satisfactorily, according to the EEOC, making her qualified for the job at the time the private school refused to renew her contract. In order to not be qualified for her job, the school would have had to demonstrate the teacher had performance deficiencies or otherwise could not perform the essential functions of her job.

Further, the private school subjected the teacher to an adverse employment action by not renewing her employment contract. An adverse employment action can be any action by an employer that takes away a benefit of an employee’s employment, e.g. taking away a company car, suspension from employment, termination, etc.

“Without both knowledge and a reasonable inference, associational discrimination will most likely be unactionable. Nevertheless, it is important to stress to employees that discrimination and harassment based on protected class is prohibited, no matter the circumstance.”

Finally, the EEOC pleaded that the private school knew of the teacher’s daughter’s disability and allegedly specifically cited that reason for not renewing the teacher’s contract, making for the reasonable inference that the teacher’s daughter’s disability was a determining factor in its decision. As such, the EEOC met its burden for pleading its case of associational discrimination based on disability, which most likely prompted the private school to settle the claims.

 

Pitfalls of Associational Discrimination

As shown by the EEOC’s enforcement action, associational-discrimination claims are actionable claims that can cost employers a substantial amount of money. The pitfalls of these claims are that they are not the easiest to catch. For example, it is comparatively easier to catch when there is direct discrimination (e.g. a racial remark, comment against a disability) than to read into the subtext of a conversation that is deprecating to an associate of an employee who is part of a protected class.

However, there are ways to teach this kind of discrimination and harassment to frontline employees and make them aware enough of an associational-discrimination or harassment issue to report it.

First, employees should be aware that discrimination or harassment based on protected class (e.g. race, religion, sexual orientation, ethnicity, gender, etc.) is prohibited. Along these lines, it is equally prohibited to discriminate or harass another employee based on the protected characteristics of someone with whom the employee associates. For example, it is illegal to use the knowledge that an employee has Jewish friends to discriminate against that employee and subject him to adverse employment actions based on that knowledge.

Second, it is important to stress that it is the knowledge of the employee’s associates’ protected classes that makes associational discrimination actionable. An offhand comment by an employee that happens to relate to an employee’s associates’ or relatives’ protected class will not necessarily implicate associational discrimination, but making the same comment and directly referencing the associate or relative and their protected class will make for this implication. In this sense, if it is discriminatory or harassing to the associate or relative, it will most likely be discriminatory or harassing to the employee.

If cornerstones of associational discrimination like these are taught and enforced, it will be less likely that an employer will be subject to the same fate as the above-referenced private school.

 

Takeaways

Associational discrimination can raise its head in a variety of circumstances, including the contract-renewal scenario above; hiring, termination, and other employment decisions; as well as discriminatory and harassing behaviors from employees.

Though it is more difficult to catch than scenarios in which discrimination or harassment based on protected class is direct, the pivotal elements of associational discrimination are knowledge of the associates’ or relatives’ protected class and the reasonable inference that the knowledge was a determining factor in the adverse employment decision. Without both knowledge and a reasonable inference, associational discrimination will most likely be unactionable. Nevertheless, it is important to stress to employees that discrimination and harassment based on protected class is prohibited, no matter the circumstance.

Further, a related claim to associational discrimination is a retaliation claim for reporting discrimination or harassment perpetrated against another employee. In this scenario, an employee reports that another employee is being discriminated against because of their protected class, and then the reporting employee is subjected to an adverse employment action. This kind of ‘associational’ activity by employees is protected, and an employer can be subjected to legal action if the report is not handled properly.

As associational discrimination and related retaliation can be difficult to detect, it is prudent to contact legal counsel in order to avoid any potential liability and train staff to recognize and report associational-discrimination scenarios.

 

Trevor Brice is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Law

Families Can Save Close to $100,000 Under New Rules

By Hyman G. Darling, Esq.

 

At long last, Massachusetts has passed a law increasing the estate-tax exemption. Under the prior law, if a person died with less than $1 million, there was no estate tax due. However, if they died with more than $1 million, the $1 million exemption basically disappeared, and taxes were due on all assets back to the first dollar. This includes assets such as real estate, stocks, bonds, retirement plans, life insurance, annuities, etc.

Under the new law, the exemption has increased to $2 million, but this is a true exemption. Therefore, if a person dies with less than $2 million, there is no estate tax due. If their estate is greater than $2 million, the tax will be calculated on all assets, but basically, the first $2 million is exempt from tax.

Hyman G. Darling

This does have the effect of taxing all assets at a bit higher rate, but the exemption of $2 million basically applies to a credit. The credit is $99,600, which would have been the tax on the first $2 million. In other words, if a person dies under the new law, and if the estate was greater than $2 million, the family basically saves $99,600, which would have been the tax on the first $2 million. The law is retroactive to any individual who dies on or after Jan. 1, 2023. Therefore, if you are reading this article, you have the benefit of the increased exemption amount.

Under the new law, there is also a provision that attempts to impose an estate tax on out-of-state property, which was not the case under the old law. The new law will allocate the tax and charge only a proportionate share of the estate tax as it applies to the Massachusetts property, but the out-of-state property is included, thus increasing the total of the taxable estate. This probably will be challenged by an individual who has a significant amount of out-of-state property, which would therefore increase their estate tax in Massachusetts. However, it may be some time before the litigation on this matter makes its way through the court system.

For a married couple, they each now have an exemption of $4 million. However, they must use the exemption, or it is otherwise lost. For instance, if one spouse dies, leaving all assets to the surviving spouse, there is no tax because the unlimited marital deduction allows a spouse to receive an unlimited amount of money from the deceased spouse. If this is the case, then the person who died did not use their $2 million exemption, and the assets are then in the surviving spouse’s estate. If that surviving spouse has greater than $2 million, there will be a tax, and only the exemption will be allowable on the second to die.

Therefore, the first spouse should consider establishing a trust with up to $2 million in assets. The trust fund will be available for the surviving spouse, and that spouse may receive income and principal at the discretion of the trustee. At the death of the second spouse, the funds remaining in this trust will pass to the children or other contingent beneficiaries without any estate tax, and the surviving spouse will still have their $2 million exemption available. Thus, they have sheltered $4 million of assets to pass to beneficiaries, which is a significant change over the prior law.

An alternative would be to have $2 million of assets left outright to the children on the death of the first spouse, but then the surviving spouse will not have availability of those assets to use during their lifetime. The use of the trust is more advisable since it is flexible in allowing the surviving spouse to have access to income and principal, but not have those assets taxed in their estate.

An additional benefit of utilization of a trust is that the funds may be held in the trust for the benefit of children until they attain desired ages when they may be more mature to receive their funds for distribution. The funds may also be distributed in intervals such as one-third at age 25, one-third at age 30, and one-third at age 35, with also giving the trustee discretion to utilize funds for the children for their health, maintenance, education, support, etc.

While the increase in the exemption has finally increased, it is still not as desirable as many other states that have either no estate tax or a significantly higher exemption. The federal exemption is currently $12.92 million for each person who dies as a U.S. citizen, but this amount is proposed to be reduced in 2026 to approximately half of this amount unless Congress extends the higher exemption amount.

In any event, this is a good time to review all estate -planning documents to be sure they are up to date, including a will, a healthcare proxy, a power of attorney, and any other estate-planning documents a person may have. Of course, use of the new tax credit should be considered to reduce or eliminate the tax.

 

Hyman Darling, a shareholder at Bacon Wilson and chair of the firm’s Estate Planning and Elder Law department, is recognized as the area’s preeminent estate planner, with extensive experience with all aspects of estate planning, trusts, tax law, probate and estates, guardianships, special-needs trusts and planning, elder law, and long-term care planning, and additional specialties including adoption and real estate; (413) 781-0560.

Law

Employers, Take Note

By Amelia J. Holstrom, Esq.

 

The Massachusetts Paid Family and Medical Leave (PFML) law is a relatively new statute that employers have to comply with in the Commonwealth. Under that law, eligible employees can take up to 26 workweeks of job-protected leave each benefit year for various reasons, including leave for their own serious health conditions or the serious health condition of their family members; leave to bond with children after birth, adoption, or placement; and leave for certain military-based reasons.

During any PFML leave, an employee is paid a portion of their regular pay as a PFML benefit. While some Massachusetts employers have a private PFML plan, the majority provide PFML to their employees through the Commonwealth’s Department of Family and Medical Leave.

Recently, two very important changes were announced regarding the PFML law. As a result of those changes, employers need to take action in the coming weeks. Here is what you need to know.

 

The Contribution Rate Is Increasing

Employees (and employers at companies with 25 or more employees) fund the PFML program through contributions deducted from their wages. For employers who provide PFML through the Commonwealth, rather than a private program, the Department of Family and Medical Leave sets the contribution rates annually, and it recently announced that contribution rates will increase in 2024.

“Recently, two very important changes were announced regarding the PFML law. As a result of those changes, employers need to take action in the coming weeks.”

Beginning on Jan. 1, 2024, the PFML contribution rate for businesses with 25 or more employees is increasing from 0.63% of wages to 0.88%. Of the 0.88%, 0.18% applies to the family-leave portion of the law and may be paid for solely by the employee. The remaining 0.7% is applicable to the medical-leave portion of the law, of which 0.28% may be paid for by the employee, with the remaining 0.42% to be paid for by the employer.

Similarly, the PFML contribution rate for businesses with fewer than 25 employees is increasing from 0.318% to 0.46%. Employers with fewer than 25 employees may require the employee to pay the full 0.46% contribution, or they can pay a portion of the contribution at their option.

Individual contributions are still capped by the federal Social Security taxable maximum. In other words, PFML contributions are not paid by the employee or employer on any income over that maximum. For 2024, that maximum is $168,600.

The increase is not surprising given statistics recently released by the Department of Family and Medical Leave in its FY 2023 Report. The report, which covered July 1, 2022 through June 30, 2023, indicates that the department approved more than 143,000 applications for PFML in FY 2023, which was a 27.39% increase in approved applications over FY 2022. With more PFML claims receiving approval, the department is paying out more in benefits, which are funded by employer and employee contributions.

 

A New Notice Is Now Required

The change in the contribution rate means that employers need to issue a new PFML notice to employees. Under the law, employers are required to give employees a written notice, which includes information on the contribution rates, among other things, at the time of hire and 30 days in advance of any contribution-rate change.

The new contribution rates will be effective Jan. 1, 2024. As a result, employers must provide notice to their employees no later than Dec. 2, 2023. The Department of Family and Medical Leave issues a model notice for employers to use each year, which will be found on the department’s website once it is released.

 

‘Topping Off’ PFML Payments

Since its inception, the PFML statute prohibited an employee from using company-provided paid time, including but not limited to vacation, personal, and sick time (collectively, PTO) and receiving PFML benefits from the Department of Family and Medical Leave at the same time.

In other words, an employee who chose to use PTO during their PFML leave was not permitted to receive any payment from the state. Employees could not even supplement — frequently referred to as ‘topping off’ — their reduced-PFML benefit using PTO to receive 100% of their pay during their leave. This, however, has recently changed.

Employees who apply to the department for PFML benefits on or after Nov. 1, 2023 will be allowed to supplement their PFML benefits with accrued PTO provided by their employer at their option. This will enable an employee to receive their full pay while on PFML leave, if they choose to do to. It is important to note that employers cannot require an employee to use their company-provided paid time to top off.

Employers with private plans may need to make some changes, too. Prior to Nov. 1, 2023, employers with private plans could choose whether or not to permit employees to top off their reduced PFML benefit by utilizing company-provided PTO. There is no longer a choice. Beginning on Nov. 1, employees working for employers with private plans will also be permitted to utilized company-provided paid time off, at their option, to supplement their PFML benefit to receive their full pay while on leave.

 

What Should Employers Do Next?

Employers should review the Department of Family and Medical Leave website regularly for the new contribution-rate notices and send those out to employees no later than Dec. 2, 2023. Additionally, now that employees have the option to top off their PFML benefits with PTO offered by the employer, employers should review their PFML policies and other related documents to make any necessary changes in light of the new topping-off option.

Employers who have questions about the changes to the law or edits to their policies and related documents should work with their labor and employment counsel to address those questions.

 

Amelia Holstrom is a partner with the Springfield-based law firm Skoler, Abbott & Presser, P.C., with a practice that focuses on litigation avoidance, employment litigation, and labor law and relations; (413) 737-4753.

Law Special Coverage

Getting Their Message Across

Seth Stratton wasn’t belittling what he does. He was just stating what most would consider the obvious — “business law isn’t what you would call sexy.”

Usually.

Indeed, when the state Supreme Judicial Court overturns a $3.5 million settlement awarded to a couple living next to a golf course after 651 stray golf balls hit their property, frightening their young child and forcing them to confine themselves indoors for fear of injury — which it did almost a year ago — that’s business law that tumbles into the ‘sexy’ category. (The case became front-page news in the Boston Globe and other large daily publications.)

Understanding this, and also understanding that his firm, East Longmeadow-based Fitzgerald Law, P.C., has a few golf courses in its portfolio of business clients and would like to add more, Stratton posted this item on LinkedIn:

“Interesting SJC decision worth noting in the context of golf course neighboring residential developments. In essence, the SJC overturned a $3.5 million verdict in favor of the neighboring homeowners on the basis that the jury needed to consider the reasonableness standard in connection with an easement for the ‘reasonable and efficient’ operation of a golf course. Always a good sign when courts emphasize reasonableness in trial decisions.”

He then attached a link to a Mass Lawyers Weekly article on the case.

While the post falls into the category of education, it can also be considered marketing and building brand awareness, said Stratton, adding that the item speaks to how the marketing and advertising of legal services, something first permitted 46 years ago, has certainly changed over that time, even over the past 10 years or so, and certainly since the days when the yellow pages, and especially the back page of the phone book, were at the top of the list of options for many firms and sole practitioners.

“We’re not trained for this; they didn’t teach it when I was in law school. In fact, it was the opposite — they were teaching you how to be thoughtful about what you do, while marketing is sort of shouting from the rooftops, ‘we’re greater than sliced bread.’ And they still don’t teach it now.”

“That post took me five minutes to prepare and share,” he told BusinessWest. “Twenty years ago, firms would spend hours on a client alert, color, printing, and mass mailing.”

With that, he explained how a LinkedIn post can reach a large audience quickly, efficiently, and at minimum expense, and how social media has become a larger force in an equation that has many components — and questions to be answered.

Indeed, there are many aspects to be considered with marketing, said Tim Mulhern, a partner with the Springfield-based firm Shatz, Schwartz & Fentin, noting, as others we spoke with did, that marketing isn’t something law students typically study.

Amy Royal

Amy Royal says the importance of law marketing continues to grow, as does the number of options for law firms to consider.

“We’re not trained for this; they didn’t teach it when I was in law school. In fact, it was the opposite — they were teaching you how to be thoughtful about what you do, while marketing is sort of shouting from the rooftops, ‘we’re greater than sliced bread,’” he said. “And they still don’t teach it now.”

So lawyers and firms have had to learn as they go, he said, adding that there is much to learn as the methods for getting a message across have evolved. Meanwhile, firms have to decide if they want to do it themselves — many have marketing committees comprised of lawyers — or hire a marketing director or an outside PR firm, an expensive step (one that didn’t have to be taken years ago), which many of them have taken.

And the job descriptions for these marketing directors have certainly changed as the times have.

“When I began my career in legal marketing in 1995, law firms were just starting to introduce websites as a tool to differentiate themselves from the competition,” said Jennifer Jacque, head of Marketing and Business Development for Springfield-based Bulkley Richardson. “Responsibilities of marketing professionals in law firms were limited to tasks such as writing bios and planning events. Since then, law firms have expanded their core portfolio of marketing services to include branding, public relations, advertising, social media, digital marketing, market research, communications, accolades and awards submissions, and more.”

Meanwhile, the importance of marketing and building brand awareness has grown steadily, said Raipher Pellegrino, managing partner of Springfield-based Raipher, P.C., which specializes in personal injury, medical malpractice, and related fields. He cited several reasons why.

Competition is one of them, he said, noting that firms in this market now compete against regional and national giants that open small offices in markets like this one — and they have for some time now. More recently, there is increased competition from firms from Boston and other large markets who can take advantage of shifts brought on from COVID — especially Zoom calls with clients and Zoom court hearings instead of the in-person variety of both — to take cases in this market that previously would have been prohibitive.

These same shifts bring down the cost of client representation, Pellegrino went on, making it possible for a potential client to hire a firm in a larger market that might previously have been out of their price range (more on this later).

All of this points to the importance of marketing and business development and the need for firms to stay on the cutting edge, said those we spoke with — whatever that might be.

 

Case in Point

As he talked about marketing and the many changes that have come to the profession and the legal landscape, if you will, in Western Mass., Mulhern noted that, among other things, the names of many of the firms are shorter — in some cases, much shorter.

“Years ago, if you added a new partner, you added their name to the firm,” he said, noting that some firms had six, eight, or even more names on the letterhead and sign over the door.

Shorter names are, for the most part, a function of marketing and branding, he said, adding that there are myriad other parts of this equation, from a strong web presence to involvement in the community, such as with his firm’s charitable foundation.

Indeed, as Jacque noted, marketing and business development covers areas ranging from PR to submitting nominations for the many ‘best of’ awards that lawyers can put on their résumés, the press releases for which start flooding the inboxes of media outlets each fall, when the announcements are made.

The world of law marketing changed dramatically in June 1977, when the U.S. Supreme Court handed down its decision in Bates v. State Bar of Arizona, essentially striking down prohibitions against advertising by attorneys.

Tim Mulhern

Tim Mulhern says that, while law marketing has certainly evolved, word-of-mouth referrals are still effective.

Until then, marketing was a function of signage on a building or office door, networking — everything from joining the Rotary Club to being active with the local chamber of commerce — and word-of-mouth referrals, all of which, and especially the last two, are still very important pieces of the puzzle and perhaps the most important, said those we spoke with.

Indeed, Stratton said he and other lawyers at Fitzgerald are very visible, attending a number of business functions (the recent Developers Conference in Springfield is a good example) and fundraisers for area nonprofits. Meanwhile, word of mouth has long been perhaps the most effective way to build a book of business.

“Word of mouth has always been important,” said Mulhern, who specializes in business organizations, estate planning, and real estate. “My favorite way to get a new client is to have another lawyer say, ‘Tim knows how to do this stuff.’”

But while advertising was frowned upon by many in the business for years after the 1977 ruling, the many aspects of marketing and brand building have become more accepted and increasingly important over the years, for those reasons mentioned earlier. The questions have always concerned how to market.

And the answer usually depends on what type of law one specializes in and what audiences they are trying to reach.

“Marketing of law firms comes down to messaging — and then targeting who you want to be receiving this message,” said Jacque, noting that the work of targeting takes many forms and involves different mediums.

Amy Royal, founding partner of the Springfield-based Royal Law Firm, agreed, noting that her firm, which represents and counsels businesses on all aspects of labor and employment law, focuses on that specific audience.

That’s why she never took out ads in the yellow pages — she was solicited annually but always said no — and instead focused on business publications like this one.

“We’ve also expanded over the years into the digital space — and while we don’t do advertising, we do brand awareness on social media,” she said, adding that some firms have gone to platforms ranging from Facebook to Instagram and even TikTok to get their message out with videos, articles, links to reports on recent rulings, and more. Doing so enables them to reach large audiences inexpensively.

“Now, in order to be competitive, you have to advertise in some form. But you have to figure out what works for you.”

Meanwhile, the firm’s web page has become a valuable asset, especially since the start of the pandemic, for introducing people to the firm and its lawyers, and also disseminating information through a blog, articles, and links to articles, such as the ones Royal’s attorneys write regularly for BusinessWest.

 

Weighing the Facts

Overall, Royal said law firms often need to use several vehicles, including traditional forms of media, depending, again, on the audience they want to reach and the messages they want to send.

Pellegrino, who uses billboards, television, print, and other mediums, agreed, but added that, for many lawyers, especially those who specialize in different areas, targeting specific audiences can be more challenging.

“Now, in order to be competitive, you have to advertise in some form,” he told BusinessWest. “But you have to figure out what works for you; it’s a very difficult business to advertise in. If you were selling engagement rings, you’d target the 19- to 30-year-old audience. But who gets in accidents? What type of clientele are you targeting? Personal injury is a very difficult business to advertise.”

Meanwhile, measuring return on investment from whatever forms of marketing are used is more difficult with legal services than other products or services, Pellegrino went on.

“There’s no guarantee of what you’re going to get in return,” he said, adding that, while it’s like this for all industries, it’s especially true with the law and especially personal-injury law, where the goal is to get the higher-end cases with bigger returns.

Despite these challenges, he said marketing is ever-more important because the level of competition continues to increase, with regional and national firms specializing in personal injury moving into this market — and making their presence known.

And the advent of virtual hearings and client meetings enables firms in other markets to woo clients in the 413.

“Before, the Boston lawyers didn’t want to take cases in Western Mass.,” he said. “But now they do because they can do a lot of the hearings by Zoom, so they don’t have to drive out here; it’s more cost-effective, and it’s really good for the consumer. And it means that it’s more important to advertise.”

Stratton agreed, noting that, overall, success in this industry is about forging relationships and continually strengthening those relationships. This is accomplished by staying visible and front of mind — in every way imaginable, be it by attending functions, being active in the community, writing articles to be published in BusinessWest, or, yes, sending links to articles on developments and cases like the one involving that couple living just off the golf course.

Doing so helps show that, while business law isn’t sexy — usually — it’s important, especially to those in business.

Legal advertising usually isn’t sexy, either, but it’s equally important, and while the landscape has changed dramatically since June 1977, and even over the past five years, the basic mission remains the same — to build a brand and put one’s best foot forward.

Law

Questions of Accommodation

By Trevor Brice, Esq.

 

As we move out of the COVID-19 era, employees are struggling more frequently with drug and alcohol addiction. As such, it is important for employers to know that alcoholism and drug addiction can qualify as disabilities under federal and Massachusetts anti-discrimination laws.

If an employee suffers from alcoholism or drug addiction, the employer could be exposed to liability for discriminating against that employee or failing to grant the employee a reasonable accommodation for the employee’s alcoholism or drug addiction. However, alcoholism and drug addiction do not qualify as disabilities in all circumstances.

 

Alcoholism and Drug Addiction as Disabilities

Despite the possibility that alcoholism or drug addiction can qualify as legal disabilities, employers do not have to tolerate employees who are drunk or under the influence on the job. As such, employees cannot excuse being under the influence at work by claiming that they suffer from alcoholism or drug addiction.

Furthermore, employees cannot request to be drunk or under the influence at work as a reasonable accommodation for alcoholism or drug addiction. In these circumstances, the employee would not be a ‘qualified’ alcoholic or drug addict that would meet the definition of disability under the ADA. Consequently, the ADA does not cover those who are currently engaging in use of illegal drugs or alcohol.

In addition, an employee who is an alcoholic or drug addict can lose their qualification as a disabled individual due to low performance, as the ADA specifically provides that an employer can hold a drug-addicted or alcoholic employee to the same standards and behaviors as other employees. However, a high-performing alcoholic or drug-addicted employee can be qualified under the ADA if the employee is no longer engaging in illegal drug use or alcohol.

 

Reasonable Accommodations Under the ADA

Reasonable accommodations for employees who are recovering alcoholics or drug addicts can include seeking time off for inpatient treatment; time off to undergo outpatient treatment, including methadone clinics; or being excused from work events that involve alcohol. However, qualified alcoholics and drug addicts do not necessarily need to be granted accommodation every time they ask.

For example, if a drug-addicted employee requests a reasonable accommodation in response to discipline for unacceptable performance or conduct, the employer does not have to grant that accommodation if the low performance is attributable to the current use of drugs.

However, if the low performance is due to alcohol, and the employee specifically notes this in her accommodation request, it is the employer’s responsibility to engage in an interactive dialogue to determine whether or not the requested accommodation is reasonable. Absent undue hardship, the employee may have to grant the employee’s reasonable-accommodation request, such as a modified work schedule to enter treatment or to attend an ongoing self-help program.

However, another wrinkle presents itself when the reasonable accommodation is in response to a court order for an alcohol- or drug-related offense. As a recent court case (Mueck v. La Grange Acquisitions, L.P.) notes, employers do not have to grant a requested accommodation of leave in relation to a court-order DUI for a recovering alcoholic.

Further, the employer can offer the employee a “firm choice” or “last-chance agreement,” in which the employee can be terminated for future poor performance or misconduct resulting from drug or alcohol addiction. The agreement will normally state that the employee’s continued employment is conditioned on the employee’s agreement to receive substance-abuse treatment and refrain from further use of alcohol or drugs.

 

Conclusion

When an employer is determining whether an accommodation for disabled employees is reasonable, it is a difficult task in and of itself. When the question becomes whether the employee is actually disabled due to current or past alcohol or illegal drug use, the question for the employer becomes even harder. If an employee is seeking a questionable accommodation request for alcoholism or drug addiction, it is prudent to seek out representation from employment counsel.

 

Trevor Brice is an attorney who specializes in labor and employment law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Law

A Critical Consideration

 

By Amanda R. Carpe, Esq.

 

Planning for the future is an essential part of life, and one of the most critical aspects of this process is estate planning. Having a comprehensive estate plan ensures that your assets are distributed according to your wishes and minimizes confusion and conflicts among your loved ones after you’re gone.

While drafting a healthcare proxy, power of attorney, and will, along with creating trusts, are crucial steps, many people overlook another vital aspect: updating beneficiary designations.

 

Avoid Unintended Consequences

Beneficiary designations supersede the instructions laid out in a will or trust. If you’ve named specific beneficiaries on your retirement accounts, life-insurance policies, or other financial accounts and have not reviewed or updated them in a while, it’s possible that they no longer reflect your current wishes.

Outdated designations may lead to unintended consequences, such as leaving assets to an ex-spouse, a deceased individual, or someone with whom you no longer have a close relationship. You may also unintentionally exclude one or more children if the account was established prior to the birth of all your children and has not been updated.

 

Ensure Smooth Asset Distribution

Your estate plan is designed to provide a clear roadmap for the distribution of your assets. By keeping your beneficiary designations current, you ensure that your assets will be transferred efficiently to your chosen beneficiaries and the distributions align with the rest of your estate plan. This process can help your loved ones avoid delays, legal complexities, and potential disputes, ensuring that your hard-earned assets are put to good use without unnecessary hindrances.

 

 

Accommodate Changes in Life Circumstances

Life is ever-changing, and so are your circumstances. Major life events like marriage, divorce, the birth of children, or the passing of a loved one can significantly impact your estate plan and beneficiary designations. By regularly reviewing and updating your beneficiaries, you can adapt to these life changes and guarantee that your financial arrangements align with your current family dynamics and relationships.

 

Maximize Tax Efficiency

Ineffective beneficiary designations can have tax implications. For instance, certain retirement accounts may offer different tax benefits based on the age of the beneficiary. By updating beneficiaries strategically, you can maximize tax efficiency, potentially allowing your beneficiaries to benefit from tax-deferred growth or minimizing their tax burden upon inheriting your assets.

 

Preserve Privacy

Unlike a will, which becomes part of the public record after probate, beneficiary designations typically bypass this process and remain private. By keeping your beneficiary designations updated and accurate, you help maintain the privacy of your beneficiaries and the details of their inheritances.

 

 

Avoid Intestate Distribution

Failing to designate beneficiaries or keeping them outdated can lead to the assets falling into intestacy. In such cases, the Commonwealth’s laws will determine how your assets are distributed, which may not align with your wishes. By actively managing your beneficiary designations, you retain control over who receives your assets, ensuring your legacy is preserved according to your desires.

 

Bottom Line

Estate planning is a responsible and thoughtful way to ensure your loved ones are taken care of after you’re gone. To make your estate plan truly effective, it’s crucial to regularly review and update your beneficiary designations. By doing so, you’ll not only prevent unintended consequences, but also provide your loved ones with a smoother process for asset distribution and avoid unnecessary complications.

Stay proactive, meet with an experienced estate-planning attorney to develop a cohesive estate plan, and keep your beneficiary designations in line with your current wishes — your loved ones will undoubtedly thank you for it.

 

Amanda Carpe is an associate attorney with Bacon Wilson, where she specializes in estate planning, elder law, and estate/probate administration.

Law Special Coverage

Complex Decisions

By Michael Roundy, Esq.

Estate representatives have a variety of options for how to probate an estate. Decisions made early in the process may have long-term consequences, as reflected in a recent decision of the Supreme Judicial Court, In re Estate of Slavin.

The Massachusetts Legislature enacted the Massachusetts version of the Uniform Probate Code (MUPC) in 2008. Under the MUPC, estates may be administered under a ‘formal’ or ‘informal’ process, as ‘supervised’ or ‘unsupervised’ administrations, as a ‘voluntary’ administration, and even by appointment of a ‘special personal representative’ under some circumstances.

Sorting through all of these options may seem daunting — and mistakes made at the initial stage may have lasting impact. In Estate of Slavin, an early decision to file as a voluntary personal representative nearly prevented the voluntary PR from pursuing a wrongful-death claim on behalf of the estate.

An informal probate, under Section 3-301 of the MUPC, is possible where the proposed personal representative has priority for appointment (usually named as PR in the will), and is in possession of the original will. A petition for informal appointment in intestacy (without a will) must also attest that, after a reasonably diligent search, the petitioner is unaware of any unrevoked will or why such an instrument the petitioner is aware of is not being probated. Informal probate is overseen by a magistrate rather than a judge, and hearings are not permitted. The benefit of informal probate is that it can be a faster process than a formal probate.

A formal probate, under Section 3-402 of the MUPC, is typically heard by a judge and may involve one or more hearings. It may be necessary to file a formal probate in order to object to an informal probate if the terms of the will are unclear, if the administration needs to be supervised, if the court needs to appoint a special personal representative, or for other reasons. A formal petition may also be used to obtain a judicial determination of intestacy, and of the heirs, without requesting the appointment of a personal representative.

Michael Roundy

Michael Roundy

“Sorting through all of these options may seem daunting — and mistakes made at the initial stage may have lasting impact.”

A formal administration may be supervised or unsupervised. A supervised administration is overseen more closely by the court, which typically must approve everything the PR wants to do before he or she does it. A supervised administration may be requested by the PR or by any interested person, and may be requested while a petition to appoint the PR is pending, or after the PR has already been appointed. Where a will directs supervised administration, it will be ordered unless the court finds that the circumstances relating to the need for supervision have changed since execution of the will.

For some estates, it may be necessary to appoint a special personal representative under Section 3-614 of the MUPC for specific purposes, such as searching the decedent’s safe-deposit box for his or her will, or to preserve assets of the estate. A special PR may also be appointed for the purpose of performing an act that a general PR cannot or should not perform due to a potential conflict of interest. While a special PR can have many of the same powers as a permanent PR, the special PR is not able to sell or distribute any assets of the estate.

Small estates may be administered by a voluntary PR. Under Section 3-1201 of the MUPC, a voluntary PR may administer an estate consisting only of personal property (no real estate) that includes a vehicle owned by the decedent and other property valued up to a cap of $25,000. Although voluntary PRs are recognized as such by certification by the register of probate, they are not appointed to the role by a judge or magistrate.

 

Case in Point

In Estate of Slavin, the decedent’s daughter filed the necessary statement of voluntary administration, which the register of probate certified in accordance with Section 3-1201. The daughter served as the voluntary PR for more than four years before she filed a petition for formal probate, seeking appointment as a personal representative under Section 3-402. She feared, correctly, that, as a voluntary PR, she would be unable to pursue a wrongful-death claim.

Although all five of the decedent’s other children assented to the daughter’s appointment as PR under the formal petition, the Probate and Family Court judge denied the appointment. The judge noted that Section 3-108 of the MUPC prohibits filing a formal petition for appointment more than three years after the decedent’s death. Since the decedent in Estate of Slavin had at that point died more than four years earlier, the judge denied the formal petition.

“The Estate of Slavin case reflects the potentially dramatic impact of an early decision about which method to use for probating an estate.”

The daughter appealed. The Supreme Judicial Court took the case for direct appellate review and reversed the lower court’s decision. The SJC noted that one of the few exceptions in Section 3-108 to the three-year limit on filing for a formal probate appointment is “appointment proceedings relating to an estate in which there has been a prior appointment.” While the Probate and Family Court judge found that a voluntary personal representative is not a ‘prior appointment,’ the SJC disagreed, holding that the exception in Section 3-108 “does not limit the type of prior appointment that qualifies.”

It agreed that, while a personal representative in a formal or informal probate must be appointed by a judge, a voluntary PR does not need to be. However, the voluntary PR statute does permit the register of probate to “issue a certificate of appointment to such voluntary personal representative” (MUPC Section 3-1201).

Moreover, the voluntary PR has the authority to pay debts, receive and sell personal property, pay funeral expenses, and distribute any balance remaining according to the principles of intestate succession. In addition, Section 3-1201 notes, third parties delivering property to the estate are “discharged and released to the same extent as if he dealt with a personal representative of the decedent.” Finally, a voluntary PR is liable for his or her administration of the estate to the same extent as a personal representative who was appointed by the court.

For all of these reasons, the SJC held that a voluntary PR constitutes an ‘appointment’ within the scope of the ‘prior appointment’ exception of Section 3-108. Thus, the daughter could be formally appointed (more than four years after death) as PR and pursue the wrongful-death claim that she could not pursue as a voluntary PR.

The Estate of Slavin case reflects the potentially dramatic impact of an early decision about which method to use for probating an estate. Would-be estate administrators may want to seek assistance from a qualified attorney in navigating such complex decisions.

 

Michael Roundy is a partner at the Springfield-based law firm Bulkley Richardson.

Law

Remote Online Notarization

By Sarah Federation, Esq. and Jeffrey Fialky, Esq.

 

Sarah Federation

Sarah Federation

Jeffrey Fialky

Most individuals have, at some point, had special documents executed in the presence of a notary public — perhaps in connection with estate planning, banking, or the purchase or sale of real estate. Massachusetts, like many other states throughout the country, has a very specific and particular set of statutory requirements for notaries’ public compliance. In fact, to become a notary, individuals must complete an application and obtain signatures of known and respected members of their community, and then swear an oath to abide by Massachusetts law.

Further, the process of a document being certified by a notary likewise follows a strict set of statutory disciplines — most notably, that the notary and the individual executing the document be physically located together, ‘in person.’ This in-person requirement has been part of the statutory regime since the inception of the notary statutes.

However, not unlike the countless other challenges that arose during the COVID shutdown, it became difficult for parties to meet in person for notary purposes. As a result, on April 27, 2020, then-Gov. Charlie Baker signed into law an act providing for virtual notarization to address challenges related to COVID. The act permitted notaries in the Commonwealth to notarize documents remotely with the assistance of electronic videoconferencing technology, but has since ended and been repealed.

As a result of the temporary change, parties throughout the Commonwealth undoubtedly became accustomed to the convenience and practicality of remote notary, with protections put in place to ensure the integrity of the process. Recognizing the benefits that came about, the Legislature has enacted a new law that will make virtual/remote notary a permanent feature of the Commonwealth.

“While Chapter 2 of the Acts of 2023 revises relevant sections of the act to continue to allow notarization via electronic means, there are notable distinctions in the revisions.”

Indeed, the Massachusetts Legislature has enacted, and Gov. Maura Healey has signed into law, Chapter 2 of the Acts of 2023, which specifically make extensive changes to notarial law in Massachusetts to become effective on Jan. 1, 2024. The substantive provisions of this law are distinctive from those in the now-repealed acts, and while the specifics of the law are currently being composed by the state regulatory lawmakers, the new law will have certain features.

Under Section 28 of Chapter 2 of the Acts of 2023, a notary public physically located in the Commonwealth may perform a notarial act using communication technology, like Zoom, for a remotely located individual if:

• the notary public has personal knowledge of the identity of the remotely located individual; has identified the remotely located individual by means of an oath or affirmation of a credible witness unaffected by the document or transaction who is personally known to the notary public and who personally knows the remotely located individual; or can reasonably identify the remotely located individual by not less than two different types of identity-proofing processes or services;

• the notary public is able to execute the notarial act in a single, real-time session;

• the notary public is reasonably able to confirm that a record before the notary public is the same record on which the remotely located individual made a statement or on which the remotely located individual executed signature; and

• the notary public, or a person acting on their behalf, creates an audio-visual recording of the performance of the notarial act.

 

Notable Distinctions in the Act

While Chapter 2 of the Acts of 2023 revises relevant sections of the act to continue to allow notarization via electronic means, there are notable distinctions in the revisions.

The Acts of 2023 allow for electronic notarial seals. The notary public can attach the notary’s electronic signature and electronic seal to an electronic record using a digital certificate in a manner that is capable of independent verification and renders any subsequent modification to the electronic document evident.

The Acts of 2023 allow for remote notarizations with technology approved by the secretary of the Commonwealth. A notary public may select one or more tamper-evident technologies to perform notarial acts with respect to electronic records. Any technology approved by the state secretary and selected by the notary require the notary’s electronic signature and electronic seal to be:

• unique to the notary public;

• capable of independent verification;

• retained under the sole control of the notary public; and

• attached to or logically associated with the electronic record in a tamper-evident manner.

The Acts of 2023 create a registry for individuals seeking to notarize documents electronically. Before a notary public performs the initial notarization using communication technology, the notary public must register as a remote notary with the state secretary, inform the state that they intend to perform remote notarization, and identify the technology that will be used. The state secretary will create and maintain a registry of service providers who meet the established standards.

The Acts of 2023 require that notaries be located in the Commonwealth of Massachusetts. A notary public physically located in the Commonwealth may perform a notarial act using communication technology for a remotely located individual if the notary public meets the above-referenced criteria.

The Acts of 2023 require attorney-managed closings for one to four residential homes. However, this does not extend to commercial transactions. With respect to any document executed in the course of a closing, only a notary public who is an attorney licensed to practice law in the Commonwealth, or a non-attorney under the direct supervision of the attorney managing the closing, will be able to perform an acknowledgment, affirmation, or other notarial act utilizing communication technology. Many of the activities that are necessarily included in conducting a real-estate closing constitute the ‘practice of law,’ and, as a result, the person performing them must be an attorney.

Finally, pursuant to the Acts of 2023, notaries must retain electronic records for a period of 10 years.

 

Future Implications

Naturally, one may consider what else is to come moving forward due to these revisions. The remote online notarization bill will go into effect on Jan. 1, 2024.

Pursuant to the Acts of 2023, the state secretary may require the completion of a course to address the duties, obligations, and technology requirements for conducting remote notarizations offered by the state secretary or vendors approved by the state secretary. However, if such a course is required, its duration will not exceed three hours.

In the event that this course is required, it must be successfully completed prior to notarizing any documents electronically. Most notably, certification of completion of the course would be a requirement in addition to registration with the state secretary.

The Commonwealth is no doubt following a growing trend in permanently solidifying the virtual notary revisions made in response to COVID. In doing so, it will allow both permitted attorneys and paralegals alike increased flexibility in the notarial act required when executing documents. Overall, this legislation will allow a streamlined process for attorneys and their clients in addition to the cost benefit.

While the Acts of 2023 are sure to continue evolving, it is imperative to stay informed regarding further changes, and it is our continued attention to this legislation that will allow us to provide the insight you may need ahead of the curve.

 

Sarah Federation is an associate, and Jeffrey Fialky a shareholder, at Bacon Wilson.

Law

Employers, Take Notice

By John S. Gannon, Esq.

 

John Gannon

John Gannon

A few weeks ago, Starbucks was in all the employment-law headlines, but not for good reasons. Given the publicity, you may have heard about the case of former Starbucks employee Shannon Phillips, who worked in the Philadelphia area. Phillips was a white Starbucks employee who claimed she was fired because of her race. The jury agreed and ordered the coffee giant to pay her $25.6 million in damages.

What you may not have heard about was a more local case in which a Massachusetts employee was awarded more than $24 million by a jury who found she was discriminated against because of her mental health. Here are some details about those two cases, followed by some commentary on what these employers could have done to possibly avoid the massive judgments.

 

Phillips v. Starbucks Corp.

Shannon Phillips, who is a Caucasian female, began her employment with Starbucks in 2005. She started at the company as a district manager and was promoted in 2011 to regional director of Operations for ‘Area 71,’ which included all stores in Philadelphia and several suburbs near the city. On April 12, 2018, a Starbucks location in Philadelphia made national news when two African-American patrons who were having a business meeting there were arrested for trespassing. The event sparked protests throughout the Philadelphia area.

“Employers cold to the idea of reducing legal risk by paying severance ought to be mindful of cautionary tales about the penny-wise but pound-foolish.”

Starbucks later reached a settlement with the two men and issued a public statement that “Starbucks will continue to take actions that stem from this incident to repair and reaffirm our values and vision for the kind of company that we want to be.” Because she was the regional director of Operations for the Philadelphia area, Phillips was called upon by Starbucks leadership to support and implement their post-incident efforts. According to Starbucks, however, she displayed poor leadership and “failed to perform the essential functions of her role as regional director” after the April 2018 incident. As a result, she was fired.

Phillips sued Starbucks for race discrimination, saying her Caucasian race played a role in the decision to terminate her employment. In her complaint, Phillips said she “worked tirelessly” to help Starbucks repair its image after the event in Philadelphia, but that the chain’s attempts to repair community relations resulted in discrimination against white employees. The jury agreed and awarded her $25.6 million, which was mostly comprised of punitive damages (damages assessed in order to punish a defendant when the behavior is found to be especially harmful or malicious).

 

Menninger v. PPD Dev., LP

Dr. Lisa Menninger worked as the executive director of a global laboratory-services company. Her job included operational leadership, business development, research and development, and quality-assurance functions for optimal performance within the labs.

In December 2017, Menninger met with her supervisor to discuss her performance. During this meeting, her supervisor suggested that her role would become more visible, involving increased client visits, social interactions, and presentations. This change did not sit well with Menninger. The prospect of making her more visible, with increased client visits and social interactions, caused great distress resulting in “increased anxiety with somatic symptoms.”

About a month after meeting with her supervisor, Menninger disclosed (for the first time) that she suffered from generalized anxiety disorder that includes social anxiety disorder and panic attacks. She then submitted medical documentation noting that changes to her role would increase her anxiety and make it “substantially more difficult, if not impossible” to perform her job.

In response, the business did exactly what it was supposed to do. The company communicated with Menninger’s medical provider and asked the doctor to specifically address how and to what extent Menninger could perform each task. Her doctor responded, saying Menninger could perform most job duties with some accommodations. For example, for internal and external sales presentations, she could develop the slides and other materials, but required someone else to present to the audience. Similarly, for client meetings, she could be responsible for problem solving and idea generation, but she could not attend the meetings herself. The company ultimately determined this arrangement would not work. Menninger subsequently went out on an eight-month leave of absence, which culminated in termination of her employment.

She sued her former employer for disability discrimination, claiming (among other things) that the company broke the law when it refused to provide the reasonable accommodations she requested. The jury sided with Menninger and awarded her a whopping $24 million, consisting of approximately $1.5 million in lost wages, $5.5 million in front pay (an estimate of future lost wages had she remained employed by the company), $5 million for past emotional distress, $2 million for future emotional distress, and $10 million in punitive damages.

 

Bottom Line

Massive judgments like these can leave employers scratching their heads (or, more likely, pounding their fists). One way to potentially avoid these runaway jury verdicts is to use employment agreements that require employees (and employers) to go to private mediation and arbitration to resolve employment-related disputes, rather than going to trial.

Another option is an agreement between employee and employer that, if any dispute goes to court, the case will be heard by a judge, rather than a jury. These agreements are commonly referred to as jury-trial waivers. They are lawful, but businesses should use experienced labor and employment counsel to help put the agreements in place.

Another way to avoid costly litigation is to work out a mutually agreeable separation agreement with departing employees. Yes, this will involve paying severance to folks who may not be the best performers, but in exchange, you get a release of claims from the employee and an agreement not to sue the company. Employers cold to the idea of reducing legal risk by paying severance ought to be mindful of cautionary tales about the penny-wise but pound-foolish.

Finally, it goes without saying that, any time a business is facing a risky firing, outside counsel should be engaged to discuss the situation and the best way to move forward.

 

John Gannon is a partner with the Springfield-based law firm Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including family and medical leave laws, the Americans with Disabilities Act, the Fair Labor Standards Act, and the Occupational Health and Safety Act; (413) 737-4753; [email protected]

 

Law

Parental Pitfalls

By Julie Dick, Esq.

 

Julie Dick

Julie Dick

Laws that govern familial rights and responsibilities are not always intuitively related to the continual social evolution of what it means to be a family. Many do not consider the legal realities of their family structure until a moment of crisis, and a lack of planning can cause difficult legal situations down the line.

When laws governing parentage were written, they contemplated families in which there was a biological mother and a biological father, and marriage was heavily incentivized. Since then, family structures and paths to existence have diversified. The law and society have both recognized a significant growth of LGBTQ+ visibility and rights, assisted reproductive technology has become increasingly accessible, and more children are being born to unmarried parents.

During the fight for marriage equality in the U.S., the importance of marriage to family building and parentage was one of the central talking points of the movement, and it is no wonder why. Marriage is often a social, religious, and cultural event, but it is also a legal contract that confers many protections, benefits, and obligations unavailable to unmarried people. From the right to access a spouse’s health insurance to the availability of some forms of family leave to financially significant tax and estate-planning benefits — the legal and financial impacts of marriage are broad. Until recently, those benefits, and the benefits associated with parentage, were categorically unavailable to LGBTQ+ families.

In Massachusetts, the automatic rights and responsibilities accorded to individuals within a family are still largely dependent on whether the birth parent is married. If a married person gives birth to a child, the second party to that marriage is automatically presumed to be the second parent. That parentage comes with obligations, but also rights, including a presumption of shared legal and physical custody (i.e., the right to make decisions on behalf of the minor child and to have that child live with them).

“During the fight for marriage equality in the U.S., the importance of marriage to family building and parentage was one of the central talking points of the movement, and it is no wonder why.”

Massachusetts was the very first U.S. state to allow marriage equality. A 2004 case, Goodridge v. Department of Public Health, interpreted civil marriage to mean “the voluntary union of two persons as spouses, to the exclusion of all others,” recognizing that doing so would advance the state’s interests in “providing a stable setting for childrearing.”

The decision directs the reader of Massachusetts marriage laws to interpret terms like ‘husband’ and ‘wife’ in a gender-neutral way. In 2015, marriage equality became available nationwide with a landmark case, Obergefell v. Hodges, in which the Supreme Court’s majority opinion boldly stated that “no union is more profound than marriage,” recognizing that it is so essential, in part, because it “safeguards children and families.” By accessing marriage, LGBTQ+ families can now access those automatic presumptions of parentage available to married people.

 

Sticky Situations

What if a child is born to an unmarried parent? In Massachusetts, the law views this family very differently. When the birth parent is unmarried, they have automatic sole legal and physical custody of the child. A second parent can establish their legal parentage by signing an acknowledgment of parentage or by asking a court to determine they are a parent. It was not until a 2016 case, Partanen v. Gallagher, that parents who were not the birth parent and not biologically related to the child (often the case for LGBTQ+ parents) could establish parentage under this law.

However, establishing parentage here in Massachusetts through either of these avenues is not the same as safeguarding parentage across jurisdictions, or across time in a changing legal landscape. Laws governing marriage and parentage are not necessarily entitled to comity — mutual respect and enforcement — between states or countries. A marriage or birth certificate that is recognized as valid in Massachusetts may not be recognized as valid in another jurisdiction. Parentage is only legally meaningful so long as the jurisdiction considering it agrees to give it meaning.

Future disputes with a co-parent and international travel pose two common points of risk when it comes to parentage.

Imagine you are in a committed relationship but haven’t gotten married. You and your partner decide to have a child together, and with the help of assisted reproductive technology, your partner carries a child. You present that child to the world and your family as your own and live together as a family raising the child. Eventually, your relationship breaks down, and your former partner now claims you are not a parent of your child and should not be awarded custody or parenting time. That was the scenario in Partanen v. Gallagher, where the ensuing argument involved years of contested litigation.

Occasionally, birth parents (married or not) have tried to take advantage of another state’s less LGBTQ+-friendly laws. By filing for divorce or custody in a state where the laws are not as inclusive, a birth parent may seek to interrupt the other’s legal parentage or gain an upper hand in custody or parenting time determinations.

In one infamous case, a birth parent residing in Vermont was dissatisfied with the state’s orders recognizing her former partner’s parentage of their child and filed a new case in a Virginia court, which denied the lesbian second parent’s legal parentage altogether. The resulting multi-state legal proceedings lasted years and involved multiple appeals. Ultimately, the birth parent kidnapped the child to Nicaragua and successfully remained in hiding until the child was 18.

The risks the accompany international travel can be even more surprising. Picture this: you’re on vacation with your family, and your child — born to your spouse during your marriage using reproductive technology — falls ill. Will the hospital allow you in the room? Give you information? Let you make vital medical decisions? Let you take your child home? “It depends” is hardly a comforting answer.

 

Adoption as an Answer

For those wishing to decrease that uncertainty, adoption may be the answer. A 1993 case, Adoption of Tammy, confirmed that an existing legal parent and their co-parent can together adopt their own child to secure their parentage in Massachusetts and across jurisdictions.

Sometimes called a confirmatory adoption, marital adoption, or second-parent adoption, this was one of the first tools available for LGBTQ+ families to establish parentage of their children and remains the most secure. Unlike a marriage or a birth certificate, an adoption is entitled to comity across jurisdictions. In Massachusetts, it is a widely available legal proceeding which can stand alone or in addition to an acknowledgement of parentage or marriage to secure a non-birthing parent’s parentage.

In an internationally varied and ever-evolving legal landscape, consider utilizing the law to protect your family so you know what to expect when the unexpected happens.

 

Julie Dick is an attorney at Bulkley Richardson, where she leads the firm’s family-law practice.

Law Special Coverage

Working in Concert

Managing Partner Seth Stratton with recently named Shareholder Andrea O’Connor.

Managing Partner Seth Stratton with recently named Shareholder Andrea O’Connor.

 

“Non-traditional.’

That’s not a term you hear often in reference to a law firm. That’s because … well, the vast majority of them would still be considered the opposite — traditional, operating pretty much the way law firms have operated for decades now.

But Seth Stratton uses the word quite liberally as he talks about the firm he serves as managing partner, Fitzgerald Law, P.C., which is based in East Longmeadow but also has an office in downtown Springfield.

He says it applies to the firm’s founder and still very active partner, Frank Fitzgerald — “he’s always marched to a different beat when it comes to the practice of law; he’s a businessperson first and lawyer second” — and also how the firm’s members go about team building. Most recently, it was at a Bruno Mars concert at MGM Springfield (Stratton formerly served as vice president and legal counsel of MGM Resorts’ Northeast Group, and still had the requisite connections to buy 40 seats to the show), preceded by some bowling in the casino’s alleys.

That term also applies, to one degree or another, to how the firm is expanding, adding lawyers, and even making them partners.

Indeed, Andrea O’Connor, a bankruptcy and insolvency specialist who joined the firm in 2020 (not long before Stratton left MGM and rejoined Fitzgerald), was recently made a shareholder, continuing a pattern of growth and what Stratton called “re-invention.”

“More people have gotten involved as shareholders in the firm,” he explained. “And we’ve also been bringing in mid-career lawyers who have considerable experience and a lot that they can bring to the firm. We’re bringing people in non-traditionally to grow our firm, and as we grow, we’ll talk out ownership opportunities in the firm.”

The addition of O’Connor, as well as Christina Turgeon, another bankruptcy specialist formerly in solo practice, and Daryl Johnson, who specializes in everything from commercial lending to zoning, further diversify a firm focused mostly on business advisory work, said Stratton, noting that it handles a wide array of legal issues, including commercial real-estate development, acquisition, and sale; zoning, permitting, and licensing; and business succession and estate planning.

Bankruptcy and restructuring are now part of that mix, and an important part, he said, because, while the economy remains strong and bankruptcies have generally been on the decline in recent years, businesses do fail, and such work is part of providing the full range of services that businesses might need.

“We’re trying to figure out a model that allows us to capitalize on talent but not be wed to a traditional law-firm model. We are a little different, and we think this is what many of our clients like about us.”

Meanwhile, there are few firms in this region that have such expertise, he went on, adding that this is a key component of the firm’s overall growth strategy.

As he talked about that strategy, Stratton said the broad plan is to continue to grow and diversify the firm — it has added several new lawyers over the past few years and now boasts 10 attorneys and five partners — and take its expertise to different markets.

The Fitzgerald firm has opened a satellite office in Worcester, he noted, enabling it to better serve clients and potential clients in that part of state, and O’Connor and other attorneys in the firm are serving a growing number of clients in Boston and other metropolitan areas, as clients take advantage of the firm’s deep portfolio of services — and at Springfield-area rates.

Overall, Stratton said the firm is still trying to determine the “sweet spot” when it comes to the desired size of the firm, and hinted strongly that it will essentially know what that size is when it gets there.

In the meantime, it will continue to look for opportunities to add some rock stars to the roster and continue to grow and diversify in a way that could, indeed, be called ‘non-traditional.’

 

Additions of Note

O’Connor told BusinessWest that she would consider her own career path non-traditional.

She started with the Springfield-based firm Hendel & Collins, which specializes in bankruptcy and related work, after graduating from law school. After six years there, she left to serve as a clerk for the bankruptcy court.

She then returned to the firm, which became Hendel, Collins & O’Connor, P.C. While her partners eventually started winding down their practices, she was looking to take hers to the next level. The question was … where?

She said she had a number of options, but eventually decided to join the Fitzgerald firm in August 2020, the height of the pandemic.

“I started my last firm when I was eight months pregnant, so I make bold choices sometimes,” she said with a laugh. “But when the opportunity comes, you have to seize it; it was a huge opportunity for me to come here and work with this team.”

Fitzgerald has been creating such opportunities for other mid-career lawyers, said Stratton, adding that the traditional path that lawyers took for years — one where they would join a firm as an associate; make partner after six, seven, or eight years; get a bigger office; and stay with that firm for the next several decades — is increasingly not the norm.

Especially at Fitzgerald, a firm that was founded in 1992.

“There is a sweet spot in terms of size, and we’re all trying to figure out what it is.”

“We’re trying to figure out a model that allows us to capitalize on talent but not be wed to a traditional law-firm model,” said Stratton, who was on the partnership track at a large regional law firm but ultimately rejected that path and left for Fitzgerald and ultimately returned to it after a six-year stint with MGM that eventually saw him become the face of the casino. “We are a little different, and we think this is what many of our clients like about us.”

And when he returned, as managing partner, he continued and accelerated that process of reinvention, adding that it involves expansion and diversification of the firm, while focusing on what it does well.

Elaborating, he said the firm moved on from the work it was doing in such areas as family law and personal injury, and focused all its talent and energies on serving businesses and their families in all the ways they need to be served, including areas such as bankruptcy and insolvency.

Work in that realm has been relatively slow in recent years, said O’Connor, adding that an expected surge — or wave, or tsunami — of personal and business bankruptcies, one that would accompany an end of COVID-related relief efforts, has yet to materialize, and now there are doubts that it will.

“We’ve had a really good economy for a very long time,” she told BusinessWest, adding that the high-water mark for bankruptcy work came at the height of the Great Recession, some 15 years ago, and has been fairly tepid ever since, to the point where she believes fewer people are entering this specific specialty.

But there is always work in this realm, she said, adding that most of hers involve businesses in distress. Recently, she was appointed a Chapter 7 panel trustee in Connecticut, administering bankruptcy cases, primarily in New Haven, but also in Bridgeport and Hartford.

This additional focus on bankruptcy and insolvency enables the firm to better navigate the cyclical nature of the economy, said Stratton, adding that it also helps separate it from many competitors.

“This allows us to be more diversified and recession-proof in our own business,” he explained. “When the economy is good, the bread and butter of our business — transactional work, real-estate development work, loans and financing — is busy. When the economy goes in the other direction, some of that work dries up, but then, bankruptcy and insolvency work picks up, so it allows us to diversify.”

The recent staff additions to the firm have enabled it to get both younger and more gender-diverse, said Stratton, adding that he anticipates this growth pattern to continue in the years to come.

“I expect that the approach we’ve taken over the past two years will continue over the next several years,” he said. “But there is a sweet spot in terms of size, and we’re all trying to figure out what it is. We want to have enough lawyers to service the business, without growing too big to where we take on additional overhead, which pushes rate structures higher and you feel less competitive with clients.

“We don’t know what that sweet spot is yet,” he went on, “but we will find it.”

 

Bottom Line

Getting back to the Bruno Mars concert, Stratton said he still has a few MGM employees on speed dial who were able to make it happen.

The concert, bowling, and dinner in the sports bar before the show was a decidedly different course for the firm’s annual summer outing, and one that provided another example of how Fitzgerald is different and — here comes that word again — non-traditional.

Thus far, that character trait is serving it well, and Stratton and his growing team are committed to staying on this course moving forward.

Where it will take them is a question to be answered later — when they find that aforementioned sweet spot. For now, it’s a path toward continued growth and diversity, in every sense of that word.

 

Law

Managing Hybrid or Remote Workers

By John S. Gannon, Esq.

 

Prior to the COVID-19 pandemic, working remotely and other flexible work models like hybrid schedules were fairly uncommon. Now, allowing employees to work remotely at least a few days a week has become the norm for jobs that can be done from home.

One research summary suggested that 74% of U.S. companies are using, or plan to implement, a permanent hybrid work model in 2023, and 55% of employees want to work remotely at least three days a week. With remote work becoming more and more common, businesses need to be aware of employment-related legal issues that can bubble up when employees are working from home (and probably in their pajamas).

 

Wage and Hour Issues

One of the biggest challenges for businesses with teleworkers is compliance with wage and hour laws, which are laws that govern issues like payment of wages and meal breaks. Federal and state laws can differ considerably on these topics.

For example, federal law, and many state-law equivalents, do not require that an employer provide employees with meal breaks. Here in Massachusetts; however, state law requires employers to provide a 30-minute unpaid meal break to those who work more than six hours in a work day. In New Hampshire, workers are required to get a meal break after working five hours, unless it’s feasible to eat while working. Massachusetts does not have this ‘feasibility’ exception to its meal-break statute.

“With remote work becoming more and more common, businesses need to be aware of employment-related legal issues that can bubble up when employees are working from home.”

Similarly, some states (including Massachusetts) require the payout of accrued, unused vacation time upon separation from employment. Most states do not have this requirement. Other states require employers to reimburse employees for home-related business expenses, such as a laptop, upgrading home internet, or phone service.

Although this is type of reimbursement is technically not required in Massachusetts, the state attorney general’s office has suggested that employers should reimburse expenses that are “unavoidable and necessary” (whatever that means). Bottom line, businesses need to be familiar with the wage and hour laws of each state where employees live if remote work is allowed.

One wage and hour issue that does not vary from state to state is the requirement to pay non-exempt workers for all hours worked. This can be a problem with remote workers, regardless of where they live. Consider an hourly employee who answers a few emails from home during non-core working hours. This is working time, even if the employee has signed out for the day.

Employers need to have policies and practice in place to make sure all working time at home is recorded and paid for. Otherwise, they might be looking at a costly failure-to-pay-wages lawsuit.

 

Family and Medical Leave Laws

Similar to wage and hour laws, employee family and medical leave entitlements can vary considerably from state to state. As readers are likely aware, in Massachusetts, employees are allowed to take up to 20 weeks of paid leave per year to care for their own medical condition. Full-time employees also earn an additional 40 hours of sick time to use during the year. Employees working from home who live outside of Massachusetts may not be entitled to this leave. However, if they live in Connecticut or New York, they would be entitled to paid medical leave and sick time required by their home state’s laws. Because this issue can be confusing for employees, leave entitlements absolutely need to be addressed in your company handbook and/or policy and procedure manual.

 

Poster and Notice Requirements

Numerous labor and employment laws, including wage and hour laws and family and medical leave laws, require employers to put a poster up in the workplace and provide informational notices to employees in places like a handbook. This obligation does not vanish when employees are working from home. If employees rarely visit the office, the required postings need to be distributed via email or posted on an employee-accessible intranet.

 

Health and Safety Requirements

Even for remote employees, businesses must ensure a safe and secure working environment. This means identifying risks and hazards associated with working in the home and requiring employees to report any work-related injuries or incidents. Even employees working from home are entitled to workers’ compensation for job-related injuries.

 

Consider an Employment-practices Audit

An employment-practices audit is a complete risk-and-liability assessment of your human-resources and compliance operations. Audits are a cost-effective way for employers to confirm that they are meeting their legal requirements under federal, state, and local laws and regulations. Employers with a hybrid or remote workforce should consider engaging labor and employment counsel to conduct an employment-practices audit to detect and fix any of the problems identified in this article (and more).

 

John Gannon is a partner with the Springfield-based law firm Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including family and medical leave laws, the Americans with Disabilities Act, the Fair Labor Standards Act, and the Occupational Health and Safety Act; (413) 737-4753; [email protected]

Law

Case in Point

By Mary Jo Kennedy and Briana Dawkins

 

A recent decision by the National Labor Relations Board (NLRB), McLaren Macomb, has employers in both union and non-union settings reviewing non-disparagement and confidentiality provisions used in their employee-separation agreements for possible legal challenges.

Mary Jo Kennedy

Brianna Dawkins

Brianna Dawkins

In February of this year, the NLRB held that the severance agreements at issue in McLaren Macomb violated the National Labor Relations Act. The employer, a hospital, offered severance agreements to union employees being furloughed that required them to waive certain rights under the act. The agreements included provisions that prohibited furloughed union employees from making statements that could disparage or harm the image of the hospital and prohibited employees from disclosing the terms of the agreement.

The NLRB found that those provisions were overly broad, unlawfully restrictive, and coercive on the employees’ ability to exercise their rights under Section 7 of the act. Section 7 protects the ability of employees and former employees to discuss terms and conditions of employment with co-workers. More broadly, Section 7 affords employees a wide range of protection, including communications with third parties “where the communication is related to an ongoing labor dispute and when the communication is not so disloyal, reckless, or maliciously untrue.”

The NLRB’s decision in McLaren Macomb makes clear that a severance agreement that has a reasonable tendency to interfere, restrain, or coerce the exercise of Section 7 rights by employees is unlawful. An employer that proffers a severance agreement with provisions that would restrict employees’ exercise of their rights under the act may be found in violation of the act. The decision states that it is immaterial whether an employee accepts the agreement. It remains uncertain whether any courts will uphold McLaren Macomb.

“The NLRB’s decision in McLaren Macomb makes clear that a severance agreement that has a reasonable tendency to interfere, restrain, or coerce the exercise of Section 7 rights by employees is unlawful.”

One month after issuance of the McLaren Macomb decision, the NLRB’s general counsel issued a guidance in response to inquiries about the McLaren Macomb decision, which responded to some inquiries regarding the decision’s impact. While not binding or controlling, some key points referenced in this guidance are:

• The McLaren Macomb decision applies to existing separation agreements. The general counsel suggests employers should proactively consider contacting those subject to severance agreements with overly board provisions in order to advise them that the provisions are null and void and that the employer will not seek to enforce the agreements or pursue any penalties;

• Because of the inequality of bargaining power between employees and their employers, it is the role of the NLRB to act “in a public capacity to protect public rights to effectuate the public policy of the act.” Even if the employees agree to broad confidentiality or non-disparagement provisions, the rights of the public may not be waived in a way that precludes the future exercise of Section 7 rights;

• Provisions in any employer communication to employees that tend to interfere with, restrain, or coerce employees’ rights under Section 7, if not narrowly tailored, may also be prohibited under Section 7 of the act;

• Confidentiality provisions that are narrowly tailored to restrict the disclosure of proprietary or trade-secret information, and include a time frame on such a restriction, may be considered lawful; and

• Non-disparagement clauses that are narrowly tailored and limited to employee statements about the employer that meet the definition of defamation, as set forth in McLaren Macomb, may be lawful.

With regard to supervisors who are generally not protected under the act, the guidance notes that they would be covered in situations in which an employer retaliates against a supervisor for refusing to act on the employer’s behalf in committing an unfair labor practice under the act. Supervisors, as defined by the act, are individuals who have authority requiring independent judgment to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees in the interest of the employer, or to adjust their grievances, or to effectively recommend such action.

Accordingly, to ensure enforceability of its severance agreements, it is important for employers to classify its employees appropriately with respect to their responsibilities and not solely based on their job titles. Nonetheless, employers may continue to negotiate broader non-disparagement and confidentiality agreements in communications with supervisory employees, which remains unaffected by the McLaren Macomb decision.

Although McLaren Macomb involves union employees, the risk of non-compliance following this decision extends to all employers subject to the act, including non-union employers. Small businesses with non-union employees, while least likely at risk of a claim of unfair labor practices, are also subject to this decision. While employers may choose not to follow the proactive advice of the NLRB general counsel, employers should consider reviewing their current severance agreements and consider revising the non-disparagement and confidentiality clauses to avoid possible non-compliance.

Employers with questions regarding the enforceability of their non-disparagement and confidentiality clauses may wish to seek advice from their legal counsel.

 

Mary Jo Kennedy is a partner, and Briana Dawkins is an associate, with the law firm Bulkley Richardson, which has offices locally in Springfield and Hadley.

Law Special Coverage

Return-to-office Mandates and Related Woes

By Trevor Brice

As pressure increases on companies to have an in-person presence post-pandemic, many companies have issued return-to-office mandates. Some of these, if they are not heeded by employees currently working remotely, can result in severe penalties, including loss of compensation, bonuses, even termination.

While these companies can impose these penalties on their wayward employees, it is now the time to remember one of the reasons why employees request to work from home: as a disability- or age-related accommodation.

On March 28, the Equal Employment Opportunity Commission (EEOC) announced suit against an employer who disciplined an employee in relation to one of these policies. This serves as a reminder of what employers’ responsibilities are to employees with age- or disability-related accommodation requests, despite being able to pressure employees to come back to the office.

 

COVID-19 Policies and Protected Class

In general, employers can impose any sort of discipline or policy on their employees. However, there are exceptions to this general rule, specifically that employers cannot discipline or impose policy that is either directly or indirectly based on the employee’s protected class (e.g., race, color, disability, age, sex, or ancestry).

“When an employee requests a reasonable accommodation, the employer has a duty to engage in an interactive dialogue with the employee and attempt to come up with a reasonable accommodation that does not impose an undue hardship on the employer.”

As we come out of the COVID-19 pandemic, most employers are setting up policies mandating that employees come back to the office, some of them with penalties attached if employees do not comply. For example, Apple recently threatened disciplinary action for employees that are not coming into the office at least three days per week. Policies like these are facially neutral and non-discriminatory in their purpose. Every employer has a legitimate business interest in enforcing attendance, and policies like these have become more commonplace.

However, these policies run the risk of disability or even age discrimination. Some employers might ask why this is the case if they are enforcing a neutral policy. The usual issue will be that a policy like this will be imposed on an employee who is older or has disabilities that make them more at risk of contracting COVID-19. As such, when a policy like this is imposed, the employee will ask, due to their disability or age, to continue to work from home as a reasonable accommodation. If and when this happens, employers have a duty to engage in an interactive dialogue with the requesting employee and try to fashion an accommodation that will allow the worker to continue their work without undue hardship to the employer.

As long as this conversation, the interactive dialogue, is had with the requesting employee, it will be difficult for the employee to say that they have been subject to discrimination or that the employer failed to provide a reasonable accommodation. However, the problem arises when the employer does not initiate this conversation.

 

The EEOC Lawsuit

On March 28, the EEOC sued a company for allegedly denying repeated requests by an employee for remote work as a reasonable accommodation due to the increased risk of COVID-19 and further was alleged to violate the law by retaliating against the employee for taking medical leave to avoid exposure.

The facts in the case, EEOC v. Total Systems Services Inc., involve a customer-service representative who repeatedly requested to work remotely as a reasonable accommodation starting at the beginning of the pandemic in 2020 to decrease the risk of her exposure to COVID-19. The employer, in response, without engaging in an interactive dialogue with the disabled employee, repeatedly denied the requests despite granting remote-work requests to other employees.

While there has not been a ruling in this case yet, it is clear why the EEOC sued the company in question. As a reminder, when an employee requests a reasonable accommodation, the employer has a duty to engage in an interactive dialogue with the employee and attempt to come up with a reasonable accommodation that does not impose an undue hardship on the employer. Here, the employer did not attempt to engage in an interactive dialogue, denying the request (in this case, repeatedly) outright.

Further, even if the company had attempted to engage in an interactive dialogue with the disabled employee (which it did not), the employer would still potentially be liable because it would be more than likely that the employer could not show that the accommodation request was an undue hardship.

As the EEOC’s lawsuit notes, most of the employee’s department was allowed to work remotely, despite denying the employee’s request to also work remotely. The company could have possibly shown that the employee’s request was an undue hardship if other employees in the employee’s department were not allowed to work remotely or if a compelling reason was given why the employee and other employees in her department needed to be on site. However, this was not the case here.

 

Conclusion

As it becomes more and more commonplace for employers to require their employees to come into the office post-pandemic, there will increasingly be more litigation from employees who suffer from disabilities or are older, who ask to be given accommodation to work from home in order to avoid COVID-19 exposure.

As shown above, employers, once a reasonable accommodation has been made, must engage in an interactive dialogue with the employee to see if there is a reasonable accommodation that can be granted without undue hardship. It is possible to show that the employee’s request is an undue hardship, but there needs to be an interactive dialogue with the employee first.

If your company is imposing these return-to-work policies and it is questionable whether there is an undue hardship with an employee’s request for a reasonable-accommodation request, it is prudent to seek out representation from employment counsel.

 

Trevor Brice is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Law Special Coverage

Change at the Top

Jeff Fialky

Jeff Fialky

It’s called Service at the Pleasure of My Partners: Advice to the New Firm Leader.

And as that title might suggest, this book by Patrick McKenna and Brian Burke is intended for those lawyers who have, or soon will have, the title ‘managing partner’ affixed to their business card.

Jeff Fialky, a partner at Springfield-based Bacon Wilson, bought a copy of the book, which presents content built around real-life issues and questions, several weeks ago, after initial talks with Ken Albano, longtime managing partner at the firm, about passing the torch.

He said he’s read it, marked several passages, and dog-eared several of the pages, an exercise he described as just part of the transition process at the firm, one that should be completed by the spring.

“It’s a good resource to hear from other managing shareholders about coping with some of their challenges — what they encountered and what they had to overcome,” he said of the book.

As he takes the helm at Bacon Wilson, Fialky said he believes the firm is well-positioned for the future. It has what all firms this size — roughly 40 lawyers — are looking for in a solid mix of young lawyers, those at the mid-career stage, and several older, veteran lawyers. It also has an established presence in the region through its main office in Springfield and smaller locations in Westfield, Amherst, Northampton, and Hadley.

“The firm is in a phenomenal place,” he said. “We’ve been here for 135 years, and we have a solid foundation for the firm to succeed well on into the future — for another 135 years.”

There are challenges, though, especially when it comes to hiring young lawyers and maintaining that mix of talent. Indeed, there are fewer people graduating from law schools, and the competition for those who do is considerable and becoming more intense with each passing year.

“I felt the time was right for some new leadership, some younger leadership. Jeff is respected by everyone in the firm, and he’s the one that take the firm to the next level.”

“We’ve had significant challenges in retaining and identifying new talent,” he said. “The past few years have been really difficult to find people; it’s been very competitive, with all forms of employees, be it staff members, legal secretaries, administrative assistants, and lawyers. It’s all about supply and demand.”

Fialky said he is looking forward to leading the firm through these intriguing times and continuing a pattern of strong leadership that has enabled Bacon Wilson to continue to grow and expand its presence over the past few decades.

“I’m really excited for the opportunity,” he said. “My first reaction was just humility and comprehending the enormity of the responsibility and feeling really honored and humbled by it. When I came back to Springfield to Bacon Wilson, I was a mid-career transfer; I’d been practicing for a number of years at that point. I was so fortunate to be given an opportunity to start a career, and to think that, all these years later, I’d be in this position is something I would never have contemplated.

“But now that I’m here, I’m really appreciative for the level of responsibility that’s been given to me by my partners and my colleagues,” he went on. “And it’s something I take very seriously, but also with great energy and enthusiasm; I’m really excited.”

For this issue and its focus on law, BusinessWest talked at length with Fialky about his new role and what comes next for one of the most venerable firms in the region.

 

Firm Resolve

As he talked about his practice and large case load, his work in the community, the additional burdens that come with managing partner, and how he will manage it all, Fialky summoned that time-honored axiom ‘if you want to get something done, ask a busy person, and they’ll get it done.’

He has certainly been busy in recent years as chair of the firm’s corporate and commercial department, and also a member of the municipal department. He has also been involved in the firm’s governance and was one of the founders of its executive committee.

Overall, he specializes in sophisticated business, financing, and commercial real-estate transactions, representing the interests of business owners and lending institutions, as well as municipalities and landowners.

A BusinessWest Forty Under 40 honoree in 2008 and consistent finalist for the Alumni Achievement Award established several years later, Fialky joined Bacon Wilson in 2006 after nearly a decade in Eastern Mass., where he held senior attorney positions with some of the country’s most prominent Fortune 100 telecommunications and cable-TV companies. Prior to that, he served as an assistant district attorney in Hampden County after earning juris doctor at Western New England School of Law in 1994.

Albano told BusinessWest that, after six years as managing partner, including the three long and very challenging years defined by the pandemic, he felt it was time for a change at the helm. And he considers Fialky to be a logical and well-qualified successor.

“I felt the time was right for some new leadership, some younger leadership,” he explained. “Jeff is respected by everyone in the firm, and he’s the one that will take the firm to the next level.”

Fialky acknowledged that he takes the helm at an intriguing and challenging time for law firms, which are coping with everything from a difficult hiring market to transitioning to new ways of doing work in the wake of the pandemic, to new technology that tempts consumers to find their legal answers online instead of from a trained attorney.

“Technology, as it pertains to the law, is really interesting and difficult to predict,” he noted. “The legal industry is a trailing indicator of technology; we’re never at the forefront of innovation. The next big question is what happens with artificial intelligence down the road. There’s been quite a bit of recent press of artificial intelligence and service professions like the law and accounting. What’s so interesting about the law is that technology is a platform to accomplish the outcome, and how personal the law is relative to an attorney-client relationship.

“With so many of our clients … while they can pick up the phone, while we can Zoom from 15 miles away, they want to come in, they want to sit down, and they want to talk to their attorney,” he went on. “These are relationships that last decades, throughout people’s lives … you can’t replace that with technology.”

When asked about the management style he will take as he addresses these and other issues, Fialky said it will be one grounded in collaboration.

“That’s how I’ve engaged in our commercial department, where we ask for many opinions before we make a decision,” he explained. “But then, when decisions need to be made, we make a decision and stand by it. That’s how I intend to manage.”

 

Case in Point

Getting back to that book he’s been reading, Fialky said it’s a collection of thoughts from managing partners on subjects ranging from following a successful leader to keeping up morale when a firm is under duress; from creating performance standards to managing one’s time.

Soon, he won’t be reading about such matters, but coping with them in real time.

It’s a challenge he’s looking forward to, one he’s spent a career preparing for, and he knows he will take it on not by himself, but in collaboration with others.

Law

Sound Advice

 

By Trevor Brice, Esq.

 

Trevor Brice

Trevor Brice

On Jan. 24, the Equal Employment Opportunity Commission (EEOC) released new guidance for employers on how and when to accommodate applicants and employees with hearing disabilities.

The guidance covers when an employer may ask an applicant or employee questions about a hearing condition and how it should treat voluntary disclosures of a condition, what types of reasonable accommodations applicants or employees with hearing disabilities may need, how an employer should handle safety concerns about applicants and employees with hearing disabilities, and how an employer can ensure that no employee is harassed because of a hearing disability or any other disability.

This guidance is an update to the original guidance that the EEOC released regarding accommodations for deafness and hearing disabilities in the workplace on May 7, 2014.

 

Questioning Employees and Applicants on Hearing Disabilities

In general, before offering an individual a job, avoid asking the applicant about hearing disabilities or any disabilities or requiring an applicant to have a medical examination before a conditional job offer. However, the limited exception to this general rule is if an applicant has an obvious impairment or has voluntarily disclosed an impairment, and the employer reasonably believes that the applicant will require an accommodation to complete the application process or to perform the job because of the condition.

If this is the case, the employer may ask if the applicant will need an accommodation and what type. However, as a best practice in the pre-offer stage, it is prudent for an employer to stick to questions about the applicant’s ability to perform the position’s essential functions, with or without reasonable accommodation, such as whether the applicant can respond quickly to instructions in a noisy, fast-paced work environment.

After making a conditional job offer, an employer may ask questions about the applicant’s health (including questions about an applicant’s disability, including deafness and hearing disabilities) and may require a medical examination as long as all applicants for the same type of job are subjected to the same requirement.

For current employees, an employer may ask disability-related questions or require an employee to have a medical examination when the employer knows about a particular employee’s medical condition, has observed performance problems, and reasonably believes that the performance problems are related to a medical condition. However, the EEOC notes that employers should take precautions in this situation, as performance problems often are unrelated to a medical condition, and the problems should be handled in accordance with the employer’s existing policies regarding performance.

Regarding hearing conditions for current employees, an employer also may ask an employee about a hearing condition when it has a reasonable belief that the employee will be unable to safely perform the essential functions of the job because of it. Further, an employer may ask an employee about their hearing to the extent necessary to support the employee’s request for accommodations, to enable the employee to participate in a voluntary wellness program, or to verify the employee’s use of sick leave related to a hearing condition if the employer requires all employees to submit a doctor’s note to justify their use of sick leave.

 

Possible Accommodations and Safety-Related Exclusions

The EEOC suggests several reasonable accommodations that could be suggested or employed for hearing-disabled individuals. This non-exhaustive list includes a sign-language interpreter for use in interviews or during employment, assistive technology (including video relay or video remote interpreting services, hearing-aid-compatible telephone headsets, etc.), appropriate written memos and notes, note-taking assistance, work-area adjustments (moving a desk away from a noisy area, for example), time off, altering non-essential job functions, and reassignment to a vacant position.

Employers should remember that there is no magic word for requesting a reasonable accommodation; an individual simply has to tell the employer that he or she needs an adjustment or change at work because of an impairment. Employers do not have to provide reasonable accommodations if doing so would be an undue hardship, meaning that providing reasonable accommodation would result in significant difficulty or expense. Additionally, employers do not have to eliminate an essential function of a job, tolerate poor performance, or excuse violations of conduct to provide reasonable accommodations.

There is another consideration for employees with hearing disabilities. Employers may also exclude an individual with a hearing disability from a job for safety reasons when the individual poses a direct threat, which is defined as a significant risk of substantial harm to the individual or others because of a disability that cannot be eliminated or reduced through reasonable accommodations. If an employer believes there is such a direct threat, the employer should conduct an individualized assessment of the individual’s present ability to perform the essential functions of the job.

Considerations should include the duration of the risk, the nature and severity of potential harm, the likelihood that the potential harm will occur, and the imminence of the potential harm. The harm must be serious and likely to occur, not remote and speculative. Finally, the employer must consider whether any reasonable accommodations, such as the ones above, would reduce or eliminate the risk of direct threat. The EEOC provides examples of how this balancing test should work.

If employers have questions relating to this balancing test, or regarding the new guidance for hearing disabilities or disabilities and reasonable accommodations in general, it is prudent to contact legal counsel in order to avoid any potential liability.

 

Trevor Brice is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Law

Five Important Things to Know Going into 2023

By Amelia J. Holstrom, Esq. and John S. Gannon, Esq.

 

Massachusetts employers are used to the ever-changing employment-law landscape. As we close out another year and ring in a new one, it is clear that 2023 will bring new challenges and new requirements for employers throughout the Commonwealth.

AMelia Holstrom

Amelia Holstrom

John Gannon

John Gannon

We’ve rounded up the top five things employers need to know and keep an eye on as we turn the page to 2023.

 

Decision on Micro-units May Be Troubling for Employers

When a union attempts to organize a group of employees at a business, it files a representation petition with the National Labor Relations Board (NLRB), identifying the proposed bargaining unit, which is the group of employees the union seeks to represent and who will be eligible to vote on whether it gets to do so. Sometimes, employers will seek to add additional employees to the union’s proposed bargaining unit, as larger proposed bargaining units may be favorable for employers in representation elections.

In a recent decision, American Steel Construction, the NLRB, which interprets and enforces the National Labor Relations Act (NLRA), gave a powerful tool to unions by clearing the way for small bargaining units, often called ‘micro-units.’ Specifically, the board decided that it will approve a smaller subdivision of employees as a bargaining unit if they meet certain criteria.

Under this standard, unions are likely to be very successful in getting the NLRB to approve micro-units. As a result, employers are placed at risk of having to bargain with several small units of employees in one workplace.

 

NLRB to Surveil Employers’ Surveillance Measures

Businesses regularly monitor employees in the workplace. For example, employers may monitor telephone calls for quality-assurance purposes, install cameras in the workplace or dashcam systems in vehicles, or monitor communications sent and received on employer-owned devices. Such monitoring appears be under attack by the NLRB.

In early November 2022, the general counsel of the NLRB issued a memorandum regarding employee surveillance, in which she urges the NLRB to adopt a “new framework” for determining whether employer surveillance violates the law. Under this framework, violations may occur when the surveillance would tend to interfere with an employee’s rights under the NLRA or “prevent a reasonable employee from engaging” in activity protected by the NLRA.

“In a recent decision, American Steel Construction, the NLRB, which interprets and enforces the National Labor Relations Act (NLRA), gave a powerful tool to unions by clearing the way for small bargaining units, often called ‘micro-units.’.”

This could involve employee surveillance of suspected organizing activity. The employer will then get the opportunity to explain their legitimate, business-based reasons for the surveillance. At that point, the new proposed framework would require the NLRB to weigh the employer’s business needs for the surveillance against the rights afforded to employees under the NLRA. If the NLRB determines that the employer’s reasons outweigh the rights of employees, the NLRB will require the employer to disclose all electronic monitoring, the reasons for doing so, and how the employer uses the information it obtains. This crackdown on employee surveillance impacts unionized and non-unionized workplaces alike.

 

Update That Handbook for New Protected Characteristics

Massachusetts law prohibits employers from discriminating against employees based on a number of protected characteristics, including but not limited to race, color, sexual orientation, and gender identity. Effective Oct. 24, 2022, Massachusetts added natural and protective hairstyles to the list of protected characteristics under the law.

Accordingly, employers need to update their handbooks and other policies to reflect the additions. Your handbook should also include language on many other employment laws, including the state Paid Family and Medical Leave Act.

 

Changes to Paid Family and Medical Leave

Speaking of the Massachusetts Paid Family and Medical Leave Act, last month the Department of Family and Medical Leave released updated model notices reflecting new contribution rates effective January 1, 2023. If you have not already done so, those new notices need to be distributed to your entire workforce as soon as possible. Employers should also ensure that their payroll providers are planning to implement this change.

The department also updated the mandatory PFML workplace poster, which should be posted in a location where it can be easily read by your workforce. The poster must be available in English and each language which is the primary language of five or more individuals in your workforce, if these translations are available from the department.

The department is also considering changes to the PFML regulations intended to clarify employer obligations to maintain employment-related health-insurance benefits while employees are out on leave. Stay tuned in 2023 for developments on these proposed regulations.

 

Speak Out Act Requires Changes to Employment Agreements

On Dec. 7, 2022, President Biden signed the Speak Out Act into law (see story on page 27). The new law prohibits employers from including non-disclosure and non-disparagement provisions applicable to sexual-assault and sexual-harassment allegations and claims in agreements executed before the allegation or claim arises. It does not impact agreements with those provisions entered into after such a claim arises.

Although it may seem insignificant because it only applies to pre-dispute agreements, employers need to carefully review their confidentiality, employment, and other agreements executed by employees and ensure that the non-disclosure and non-disparagement paragraphs in those agreements do not prohibit the employee from disclosing or discussing sexual-assault or sexual-harassment allegations or claims. Employers would be prudent to include language carving out those claims.

Businesses are encouraged to continue to consult with counsel regarding these changes in labor and employment laws. The team at Skoler Abbott also wishes readers a happy and prosperous new year.

 

Amelia Holstrom and John Gannon are attorneys at Skoler, Abbott & Presser, P.C. in Springfield; (413) 737-4753; [email protected]; [email protected]

Law

Talking Points

By Briana Dawkins, Michael Roundy, and Mary Jo Kennedy

 

Effective Dec. 7, 2022, a new federal law, the Speak Out Act, limits the enforceability of pre-dispute non-disclosure and non-disparagement agreements relating to sexual-harassment or sexual-assault disputes in the workplace. Such agreements that were entered into before an actual dispute arises are now unenforceable.

Brianna Dawkins

Brianna Dawkins

Michael Roundy

Michael Roundy

Mary Jo Kennedy

Mary Jo Kennedy

The Speak Out Act defines a pre-dispute agreement as one that is entered into between an employer and an employee before a sexual-harassment or assault dispute ‘arises’ — that is, before an allegation of sexual assault and/or harassment is made. Often, employers require employees to sign non-disclosure and non-disparagement agreements upon commencement of employment in order to protect confidential or otherwise private employer information. Under the Speak Out Act, these clauses can no longer be enforced with respect to any sexual-harassment or sexual-assault claim that may arise in the future.

A non-disclosure clause is defined in the act as “a provision in a contract or agreement that requires the parties to a contract and/or agreement not to disclose or discuss conduct, the existence of a settlement involving conduct, or information covered by the terms and conditions of the contract or agreement.” A non-disparagement clause is “a provision in a contract or agreement that requires one or more parties to the contract or agreement not to make a negative statement about another party that relates to the contract, agreement, claim, or case.”

A sexual-harassment dispute involves “conduct that is alleged to constitute sexual harassment under the applicable federal, tribal, or state law.” A sexual-assault dispute involves a “non-consensual sexual act or sexual contact, as such terms are defined in [federal criminal law] or similar applicable tribal or state law, including when the victim lacks capacity to consent.”

The act’s protections apply not only to complaints of sexual harassment or sexual assault towards an employee, but also to complaints about sexual harassment and assault involving other individuals. The act’s provisions do not prohibit an employee and an employer from entering a non-disclosure or non-disparagement agreement after a complaint of sexual harassment or assault has arisen. Thus, the act does not prohibit such clauses, for example, in agreements settling sexual-harassment or sexual-assault claims after they are asserted. However, employers should exercise caution, as such clauses in settlement agreements may have significant tax implications for employers under the 2017 Tax Cuts and Jobs Act.

“The act’s protections apply not only to complaints of sexual harassment or sexual assault towards an employee, but also to complaints about sexual harassment and assault involving other individuals.”

The congressional rationale expressed through the language of the act is clear. Many women who experience sexual harassment in the workplace are forced to leave their jobs or their industries, or to pass up opportunities of advancement. According to the congressional findings identified in the act, one in three women face sexual harassment or assault in the workplace, approximately 90% of whom never file a formal complaint.

The congressional findings also state that non-disclosure and non-disparagement agreements between employers and current and former employees, prospective employees, and independent contractors can perpetuate illegal conduct by silencing survivors of illegal sexual harassment and assault. Therefore, Congress finds that prohibiting such non-disclosure and non-disparagement clauses will empower survivors to speak out, hold perpetuators accountable, improve transparency around illegal conduct, and make workplaces safer and more productive for everyone.

The Speak Out Act complements the enactment earlier this year of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFASASHA). That act, which applies to employers subject to the Federal Arbitration Act, prohibits mandatory arbitration agreements between employers and employees for sexual-harassment and sexual-assault disputes. It also applies retroactively to arbitration agreements between employers and employees that have already been entered into containing such mandatory arbitration provisions.

Following the enactment of the Speak Out Act and the earlier EFASASHA, employers are encouraged to be proactive about compliance and should review their template releases and agreements to ensure that pre-dispute non-disclosure and non-disparagement agreements do not violate these laws.

It bears noting that the Speak Out Act does not invalidate non-disclosure and non-disparagement agreements relating to claims which do not involved sexual harassment or sexual assault. Thus, employers may consider including ‘carve-out’ language for pre-dispute non-disclosure and non-disparagement agreements to make clear that the pre-dispute agreements do not apply to later-arising sexual-harassment or sexual-assault claims.

Employers should review their arbitration agreements and any language pertaining to future mandatory arbitration agreements to ensure sexual-harassment and assault claims are carved out from those provisions as well. Such agreements may be revised to include clear language indicating that, with regard to claims of sexual harassment or sexual assault, employee signatories will have a choice — they are not required to submit to arbitrations and may bring their claims in court. Employers may also wish to consider updating sexual-harassment policies in their employment handbooks to include similar clarifications.

In reviewing such employment agreements, confidentiality agreements, arbitration agreements, and employee handbook policies as they relate to sexual harassment and sexual assault for compliance with the Speak Out Act and the EFASASHA, it is recommended that employers seek legal advice and guidance from an experienced employment-law attorney.

 

Briana Dawkins, Michael Roundy, and Mary Jo Kennedy are attorneys in Bulkley Richardson’s Employment Law practice.

Law Special Coverage

Processes, Procedures, Practices, and Protocols Are Kings

By Tanzania Cannon-Eckerle, Esq.

In this new, enlightened era of increased employee rights and employee shortages, many employers are scared to terminate employees in fear of litigation — or of not having enough staff to enable the company to produce at the desired level.

The second question we can save for later, but I will mention now that additional widgets will most likely never justify the havoc that a toxic employee will create.

In my opinion, the answer to the first question is simple: do not fear what you cannot control. You cannot control who goes down to the courthouse to file a complaint. Just be prepared for the battle. So, yes, you can fire that guy (or girl, or them). The question is, should you?

 

Don’t Shoot Before Aiming — Consider Your Goal First

Don’t respond emotionally or consider someone else’s emotional response. Stop and think. Ask, why is this employee on the chopping block (i.e., what did they allegedly do)? How did they get there (was the proper process followed)? Who placed them there (who is bringing this up? Does the person have the authority to raise this issue? Anything nefarious here)?

Notice that I did not ask ‘who’ this employee is. We don’t assess the ‘who’ on the chopping block. It doesn’t matter who did it. It matters what was done, why it was done, whether it was actually done, and whether it rises to the level of termination.

Essentially, assess the conduct. What do you hope to attain by terminating this employee? A safer workplace? Good. To stop disruptions in operations or the beginnings of a hostile work environment? Good. Now prove it.

 

Prove It (in Preparation for the Battle)

If you can’t prove it, abort the mission. Go back to the drawing board. Go to plan B. Joking aside, preparing for appropriate employee terminations is a long game. It starts with consistent application of procedures, processes, policies, and practices. Probably the most important thing is documentation.

Consistent application of the ‘four Ps’ over time may take an investment of time and money into creating them if you don’t already have them, and training managers and supervisors in the art of holding employees accountable.

“Preparing for appropriate employee terminations is a long game. It starts with consistent application of procedures, processes, policies, and practices. Probably the most important thing is documentation.”

Tanzania Cannon-Eckerle

Tanzania Cannon-Eckerle

Among other things, there should be consistent application of all conduct and performance-related policies. There should be consistent application of all of the policies, procedures, and practices associated with managing human-resources functions such as leaves of absence and request for accommodations, as well as employee complaints made and investigated.

All of these should contain a component that enables tracking the underlying data and providing the ability to obtain and distribute the underlying information that supports assertions made. So you want to terminate an employee because he has been to work only seven out of 19 days, and on the seventh day he violated a safety policy and then stole your candy bar? You should be able to show documentation of these occurrences that were created in real time — including, of course, when the company had the initial conversation with him for being absent the first few times, checking to make sure it wasn’t actually a protected leave of absence.

Once you have the documentation, sit him down and tell him that he is being terminated from the job because of his inability to perform and because of his violation of the attendance policy. Have a witness. If you don’t have the documentation, sit him down, put him on notice that he is in the line of fire, and start documenting. Provide him with expectations, and then document it thereafter. Most likely, this will just delay the inevitable, but you never know. Regardless, at least you will have something to take with you into battle.

Make the Business Decision Informed by the Data, and Document It

Please know, you can terminate an employee for any reason at any time so long as it is not an illegal reason. That means you cannot terminate because of an employee’s protected status or activity or in a manner inconsistent with a collective bargaining agreement or other employment agreement.

As such, if you want to terminate a person for business reasons that have nothing to do with the person and everything to do with your business needs, that is OK too. But you should prove it. Do you have the data to back up your decision? You don’t have to have it, but if that person files a complaint, you will want it, and you will want to be able to attest that the business analysis was done prior to the termination. Otherwise, they will scream ‘pretext,’ meaning you just made that up. Plus, doing the analysis first may help you assess the risks of terminating an employee for business reasons.

There are always risks. Is it cheaper to keep him after assessing those risks, or not? That is a legitimate fiscal business concern. There are risks associated with not terminating employees as well. Be sure to document those, too — not just in the business case (e.g., budget concerns), but also in the ‘do I have enough to terminate this employee for conduct?’ case. Some examples: if I don’t terminate, there will be allegations that I did not maintain a harassment-free workplace; or, I terminated another employee for this same behavior last year, and there is no legitimate reason distinguishing this employee from being terminated for the same; or, he keeps violating safety procedures, and someone may get hurt.

 

Terminate with Grace and Pay What You Owe

Be respectful to all employees, including those who are coming and going. He knows what he did to get terminated (if you have done it right). There is no legitimate reason to be rude about it.

Terminating with dignity or grace does not mean that you should not terminate an employee. Once an employee gets to termination, he should have already had an opportunity to cure the conduct or behavior for which he is getting terminated. As such, by the time the writing is on the wall, he should not be surprised. If he is, that might partly explain why he is getting terminated.

Next, make sure you reach out to your employment counsel for assistance with properly preparing a termination package (necessary correspondence, pay requirements, and timing considerations). A misstep here can get you in hot water — triple hot water. Failure to pay an employee what is due at termination has no defense, and the remedy to the employee includes three times the wages due. Call your counsel before terminating.

I know this article is not going to make me popular among some folks. I am not trying to be cold. I am just being practical. Your employees are your life force. I get it. I am one. But they are also human capital. If you manage your human capital like you manage your non-human capital, then you should be able to terminate employees without fear.

Processes, procedures, practices, and protocols are kings. Remember, keeping a toxic employee is more costly, in a variety of ways, than the cost of defending a claim — that is, if you have your ducks in a row. So get your ducks in a row. Plus, the remainder of your staff will appreciate the decision. Heck, the terminated employee may appreciate it in time; sometimes it just isn’t a good fit. Cut them free to find their better role. In the case of the business decision, your shareholders or business partners will appreciate your fiscal responsibility.

 

Tanzania Cannon-Eckerle, Esq. is chief legal and administrative officer for the Royal Law Firm; (413) 586-2281.

Law

A Heads Up

By Briana Dawkins

 

Effective Oct. 24, Massachusetts joined 17 other states in passing the Creating a Respectful and Open World for Natural Hair (CROWN) Act, which bans discrimination against employees, students, and other individuals on the basis of natural or protective hairstyles historically associated with race.

The act applies to Massachusetts employers as well as all Massachusetts school districts, school committees, public schools, non-sectarian schools, and places of public accommodation. At the federal level, CROWN Act legislation has passed the U.S. House of Representatives and is pending in the U.S. Senate.

The Massachusetts version of the CROWN Act amends the definition of ‘race’ contained in the state’s Fair Employment Practices Act, as well as other Massachusetts laws specifically applicable to schools, to include protection against such discrimination on the basis of traits historically associated with race, including, but not limited to, hair texture, hair type, hair length, and ‘protective styles,’ which include braids, locks, twists, Bantu knots, hair coverings, and other formations.

Briana Dawkins

Briana Dawkins

“To ensure compliance with the CROWN Act, employers and schools may want to consider avoiding language in their grooming or personal appearance policies that categorizes specific hairstyles or textures as ‘unkempt’ or, in the alternative, ‘socially acceptable.’ Such choice of words can create a presumption that some hairstyles or textures are less socially acceptable than others.”

The enactment of the CROWN Act in Massachusetts was founded in an incident that occurred at a Greater Boston charter school. In 2017, two Black 15-year-old sisters, Deanna and Mya Cook, were reprimanded at the Boston-area high school in Massachusetts for wearing braided hair extensions. At the time, the school had a hair and makeup grooming policy that prohibited hair extensions. The Cook sisters faced several hours of detention, were threatened with suspension, and, among other reprimands, were even barred from participating on the school’s sports teams after they refused to take down their protective hairstyles.

Thanks to the tenacity and grace of the Cook sisters, the issue reached a very public audience. The Massachusetts attorney general wrote a letter to the school informing the school that the grooming policy was discriminatory and in violation of state and federal law. The Cook sisters’ case also caught the attention of the American Civil Liberties Union of Massachusetts, as well as the NAACP. Then California state Sen. Holly Mitchell drafted the first CROWN Act legislation in 2019, empowering California to take the lead as the first state to enact this legislation.

Massachusetts Gov. Charlie Baker signed the CROWN Act into Massachusetts law earlier this year. While Massachusetts has not yet been confronted with a suit under the CROWN Act, a violation under the expanded protection may result in liability under the state’s anti-discrimination statutes (which provides for the award of lost wages, emotional distress, punitive damages, and attorney’s fees).

Going forward, the Massachusetts Commission Against Discrimination (MCAD) has been tasked with promulgating rules or issuing guidelines regarding the discrimination protections expanded by the CROWN Act. In addition, the Massachusetts Department of Elementary and Secondary Education (DESE) has been authorized to provide written guidance interpreting the Act. Nonetheless, employers and schools should not wait for the MCAD or DESE guidelines and should amend their equal employment opportunity policies, anti-discrimination policies, and any grooming or other appearance-related policies to ensure that the language appropriately reflects the added protections to race as a protected class.

To ensure compliance with the CROWN Act, employers and schools may want to consider avoiding language in their grooming or personal appearance policies that categorizes specific hairstyles or textures as ‘unkempt’ or, in the alternative, ‘socially acceptable.’ Such choice of words can create a presumption that some hairstyles or textures are less socially acceptable than others.

Instead, employers can enforce grooming requirements specific to a certain position or function of the job that apply to all employees regardless of race, hairstyle, or texture, such as a requirement to keep hair away from the face or pulled back. This same approach can apply to school grooming and uniform policies as well. Employers and schools should make efforts to ensure that the policies are enforced equally to all employees, students, and other individuals rather than selectively.

Employers and schools should also inform their managers, teachers, and other employees regarding policy changes and provide training on how to address potential policy violations. These preventive measures will help to ensure a welcoming environment for all hairstyles, textures, and the like that are historically associated with race in the work and school settings as required by the CROWN Act.

 

Briana Dawkins is an associate in Bulkley Richardson’s Employment and Litigation practices.

Law

This Developing Trend Is Moving in the Wrong Direction

By John Gannon, Esq.

 

Quiet quitting is a term many employers are familiar with — it involves a situation where an employee disengages from work and does only the bare minimum in order to get fired and collect unemployment.

Now, employers are firing back with quiet firings.

Quiet firing involves intentionally creating a difficult work environment and/or cutting pay or hours in a way that encourages people to leave voluntarily. In theory, the employee will quickly realize they need to get out and try to find alternate work elsewhere.

On the surface, ‘quietly firing’ a problematic or difficult employee might sound like a good idea. For starters, the manager or supervisor gets to avoid an uncomfortable conversation that will certainly lead to bad feelings and possibly boil over into a confrontation. Second, if the employee who is getting quietly fired is not meeting performance expectations, managers and supervisors avoid needing to coach them and give feedback.

John Gannon

John Gannon

“Managers and supervisors may prefer this method so they do not feel guilty about the end of the employment relationship. And quiet firing can be more easily accomplished in a remote or hybrid environment, as disengaging is easier when you do not have to see someone in the office.”

They can also avoid discussions about the consequences of continued poor performance. Managers and supervisors may prefer this method so they do not feel guilty about the end of the employment relationship. And quiet firing can be more easily accomplished in a remote or hybrid environment, as disengaging is easier when you do not have to see someone in the office.

Finally, some employers may see this as an opportunity to avoid unemployment compensation claims or claims of unlawful termination because employees who resign normally have trouble succeeding with such claims.

Despite what may appear to be advantages for employers who quietly fire employees, employers should resist the urge to utilize use this strategy for a number of reasons. First, creating a hostile work environment could lead to a lawsuit. It is unlawful for an employer to create a hostile work environment that is tied to an employee’s protected characteristics, such as gender or race. Creating a hostile work environment or reducing an employee’s hours could also be considered an adverse employment action, which can lead to claims of discrimination or retaliation.

Employees who are successful with these claims can sometimes recover big damage awards. For example, back in 2018, a jury awarded $28 million in damages to a nurse who succeeded in a retaliation claim against her employer. Part of her claim was that she was being verbally abused by her supervisor. The jury agreed, and the employer had to pay — a lot — for this supervisor’s mistake.

Employees who feel as though they are being squeezed out might resort to avenues other than the courtroom to air their grievances. It is not hard to leave damaging feedback on Glassdoor, a website where current and former employees anonymously review companies. Employees can (and probably will) share their negative feedback with co-workers, which could serve as the catalyst for good employees to start looking for a new job. It’s no secret that hiring and retaining qualified employees seems to be getting harder and harder each day.

Moreover, quiet firing is often the byproduct of a poor manager or supervisor who is unwilling to do one of the more difficult parts of their job — performance management.

So what should employers do? First, leaders should insist on managers and supervisors using traditional methods to address problematic behavior, such as coaching and progressive discipline. Should those efforts prove unsuccessful, managers and supervisors need to be ready to have the difficult conversation necessary to terminate the employee.

HR leaders should also be stepping in to prevent quiet firing from becoming a thing. This should involve regular check-ins with managers to talk about difficult employees and proactively asking how they are trying to solve the problem. Hopefully, the answer is performance management. If it’s not, maybe the manager is the one who needs some coaching and/or discipline. u

 

John Gannon is a partner with the Springfield-based law firm Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including family and medical leave laws, the Americans with Disabilities Act, the Fair Labor Standards Act, and the Occupational Health and Safety Act; (413) 737-4753; [email protected]

Law Special Coverage

A 2022 Year-end Wrap Up and a Look Ahead to 2023

By Justin Goldberg, Esq.

Within the broad realm of employment law, this past year was marked by increased protections to employees through changes to independent-contractor classifications, raising of minimum and service wages, increasing benefits for family and medical leave, safeguarding hairstyles of protected classes, and other changes.

Looking ahead to 2023, it certainly appears to be headed down a similar path, with employee safeguards continuing to solidify. Employee security and compensation guarantees to be a highly litigated issue in the coming year.

Here is a look back — and ahead:

 

U.S. Department of Labor Publishes Independent Contractor Proposed Rule

On Oct. 11, the Biden administration, via the U.S. Department of Labor (DOL), proposed to modify Wage and Hour Division regulations so as to revise its analysis for determining employee or independent-contractor classification under the Fair Labor Standards Act.

This was done with the aim to be more consistent with judicial precedent and the act’s text and purpose. This will mark the administration’s second attempt at undoing the Trump-era standard, which it claims denies basic worker protections such as minimum wage and overtime pay.

Justin Goldberg

Justin Goldberg

“Operating costs will undoubtedly increase if they are required to reclassify their independent contractors as employees, due to the tax liabilities and minimum-wage, labor, safety, and other legal requirements that apply to employees.”

Secretary of Labor Marty Walsh was quoted as saying, “while independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” and that “misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages.”

Industries such as gig companies, construction, trucking, home care, janitorial services, delivery, personal services, hospitality, and restaurants that use independent contractors as staff should pay close attention to this anticipated development. Their operating costs will undoubtedly increase if they are required to reclassify their independent contractors as employees, due to the tax liabilities and minimum-wage, labor, safety, and other legal requirements that apply to employees.

The Trump-era rule outlined a multi-factor test (five total) to determine if the worker is an independent contractor or an employee; however, it gave far greater weight to two core factors: the nature and degree of the worker’s control over the work, and the worker’s opportunity for profit or loss based on personal initiative or investment.

The Biden administration’s proposal would consider those two factors, but include four others for a total of six: investments by the worker and the employer, the degree of permanence of the working relationship, the extent to which the work performed is an integral part of the employer’s business, and the degree of skill and initiative exhibited by the worker.

These six factors guide the analysis of whether the “economic realities of the working relationship” show a worker to be either dependent on the employer for work or in business for themselves based on a “totality of the circumstances.”

Under the proposed modification, no one factor or set of factors is presumed to carry more weight, and the DOL may also consider additional factors beyond those six, if they indicate the worker may be in business for themselves.

 

Increases in the Minimum Wage and Service Rate

Massachusetts employees making minimum wage are going to see a pay increase of 75 cents per hour, effective Jan. 1, 2023, bringing their pay to $15 per hour. This does not include agricultural workers, whose pay remains at $8 per hour. Workers under the service rate (those who provide services to customers and make more than $20 a month in tips) will see an increase of 60 cents per hour, beginning in 2023, as the service rate is now $6.75.

 

Changes to Massachusetts Paid Family and Medical Leave

In 2022, the maximum weekly benefit for Massachusetts Paid Family and Medical Leave is $1,084.31; however, in 2023, it will increase to $1,129.82. Also beginning in 2023, the contribution rate for employers with 25 or more covered individuals will decrease from 0.68% of eligible wages down to 0.63% of eligible wages. Employers should ensure that their wage deductions and contributions are adjusted accordingly. This is the second straight year the contribution rate has decreased.

Employees are still not permitted to use their accrued sick or vacation leave to ‘top off’ their weekly benefit. While there may have been rumors that Massachusetts was planning to change this in 2023, no such change appears forthcoming.

 

The CROWN Act

In 2022, Massachusetts enacted the Creating a Respectful and Open World for Natural Hair (CROWN) Act, making it the 18th state to pass similar legislation (see related story on page XX). This law is aimed at quashing discrimination on the basis of “traits historically associated with race, including, but not limited to, hair texture, hair type, hair length, and protective hairstyles.”

The law further defines “protective hairstyles” to include “braids, locks, twists, Bantu knots, hair coverings, and other formations.” Employers who violate the CROWN Act will be liable for compensatory damages, as well as possible punitive damages and attorneys’ fees.

The CROWN ACT was inspired by two teenage twin sisters’ alleged violation of a school hair and makeup policy that prohibited extensions.

 

Bottom Line

Given the changes that have taken place — and the changes to come — it is a good idea to have your business schedule a check-in with an employment-law firm as we approach 2023.

 

Justin Goldberg is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.

Law

Giving Them the Business

By Gina M. Barry, Esq.

 

More often than not, a family business is doomed by the failure of the owners to plan for its continuation. Currently, only 30% of family-run companies succeed into the second generation, and only 15% percent survive into the third generation. Fortunately, with proper planning, most business owners can ensure the continued operation of their business should they become incapacitated or pass away.

Contemplating one’s mortality is not a pleasant activity. Most believe they have plenty of time to plan. Some business owners identify so closely with their business that they simply cannot comprehend the idea of their business being operated by anyone other than themselves. However, when a business owner becomes incapacitated or passes away without a plan in place, the business always falters and often fails.

Gina Barry

Gina Barry

“Currently, only 30% of family-run companies succeed into the second generation, and only 15% percent survive into the third generation.”

The general recommended time to plan for business succession is between the ages of 55 and 65. This timeframe is recommended because most successful business-succession plans include several steps carried out over time. Some succession consultants recommend a three- to five-year plan, while others advocate a five- to 10-year plan. Adequate planning time allows a business owner to test potential successors in different roles and to evaluate their maturity, commitment, business acumen, and leadership abilities. Further, once a successor is chosen, adequate lead time allows the successor to gain expertise so that the business does not falter when the former business owner leaves the business.

More often than not, the head of a family-owned operation chooses a child as a successor. Commonly, more than one child is competent to step into the parent’s shoes, which makes the selection process even more difficult. When a family member is not available, a key employee often fits the bill. Typically, these employees have already displayed the abilities necessary for operating the business.

The business owner should begin by determining three things: when they want to step away from the business, for how long they want to remain active in the company thereafter, and in what capacity they wish to remain involved. Next, the business owner needs to discuss their ideas about the future with their family, senior management team, and key employees. Thereafter, the business owner should begin working with the successor to revise their business plan, thereby allowing them to include any future new products, plans for expansion, growth, or new investment, as well as a candid assessment of the company’s current environment and competitive positioning.

The business owner will also want to develop a financial strategy for actually stepping fully away from the business. A financial strategy, which is perhaps the most significant activity associated with succession planning, protects the company, the family, and the employees against a monetary burden that could doom the entire process to failure. For example, if a business owner intends to leave the business to their children, they must consider any estate taxes their estate may face upon their passing that may require the liquidation of the business, despite best intentions.

It is also critical to obtain an accurate valuation of the business regardless of who will take over or inherit the enterprise. Such a valuation encompasses tangible assets, such as real estate, buildings, machinery, and equipment, as well as intangible assets, such as employee loyalty, manufacturing processes, customer base, business reputation, patents on products, and new technologies. Employing a professional valuation company is recommended, as there are many different factors that affect the value of a business.

Once the business has been valued, it is necessary to determine the method of transferring the business. Some options for transferring a business include gifting, the use of a trust, buy-sell agreements, and life-insurance-funded plans. The choice of successor will strongly influence this decision. Surely, a plan that gives the business to children or family members would differ greatly from a plan that requires a third party to purchase the business owner’s interest. When transferring to a child or related party, the business owner may gift some of the company’s value, whereas, when transferring to an independent third party, the business owner would most likely want to be paid the full fair market value of the business.

As various plans may be established and the specifics of the business must be considered, each different plan must be reviewed on its own merits. The process of choosing a succession plan involves numerous factors, and there are many pitfalls along the way. Thus, it is best to consult with the necessary professionals, such as attorneys, financial advisors, and accountants, to assist with the transition and to allow as much time as possible to plan and make the transition. By doing so, business owners can ensure the vitality of their business for many years to come.

 

Gina M. Barry is a partner with the law firm of Bacon Wilson, P.C. She is a member of the National Academy of Elder Law Attorneys, the Estate Planning Council, and the Western Massachusetts Elder Care Professionals Assoc., and concentrates her practice in the areas of estate and asset-protection planning, probate and trust administration, guardianships, conservatorships, and residential real estate; (413) 781-0560; [email protected]

Law

Case in Point

By Justice Mary-Lou Rup and Briana Dawkins, Esq.

A recent decision from the Massachusetts Supreme Judicial Court (SJC), Commonwealth v. K.W., clarifies the standard for persons seeking to expunge records of criminal court appearances and dispositions from their state criminal records (known as Criminal Offender Record Information, or CORI) and court and criminal justice agency records.

By way of background, it is important to first understand that in Massachusetts, individuals may seek to clear their CORI in one of two ways: through sealing or expungement. If sealed, the record still exists but is unavailable to the general public. If expunged, the record no longer exists.

Petition to Seal Record (Mass. General Laws, Ch. 276, Secs. 100A-100D)

With some exceptions, one can petition the commissioner of Probation to seal disposed cases after a period (three years for misdemeanors and seven years for felonies) beginning on the later of the date of a guilty finding or release from incarceration, with no intervening criminal convictions. A judge can allow immediate sealing if the charge ends with a finding of not guilty or no probable cause, dismissal, or nolle prosequi, and must allow a petition to seal for first-offense convictions (with successful completion of probation), not-guilty findings, dismissals, or nolle prosequi of possession of marijuana or Class E controlled substances or in the presence of a person in possession of heroin, as well as decriminalized offenses.

For other offenses, sealing is discretionary, and the petitioner must show ‘good cause’ — that continued public availability of the record creates a current or foreseeable future disadvantage. If sealed, the courts will report ‘no record’ to criminal background checks, and the individual, if asked (such as on an employment application), can report having no record as to the sealed offense. However, courts, police, criminal-justice agencies, and certain other entities still have immediate access to sealed records.

Petition to Expunge Record (Mass. General Laws, Ch. 276, Secs. 100F-100P)

In 2018, as part of the Criminal Justice Reform Act, the state Legislature created two pathways for individuals to seek expungement. Following the first pathway (referred to as ‘time-based’ expungement), individuals who, before age 21, committed certain low-level offenses may apply to expunge those records.

Following the second pathway (known as ‘reason-based’ expungement), an individual can seek expungement of juvenile and adult criminal court appearances and dispositions by presenting ‘clear and convincing evidence’ that the record was created as a result of false identification or unauthorized use or theft of identity of the petitioner; fraud perpetrated on the court; ‘demonstrable’ error by law enforcement, witnesses, and/or court employees; or an offense that is no longer a crime.

There is a ‘strong presumption’ in favor of expungement of records created as a result of one of the statutory factors. That said, expungement is not automatic. A judge has discretion and must still balance that presumption against any ‘significant countervailing concern’ that may be raised when deciding if expungement is ‘in the best interests of justice.’ If none are raised, the judge must order expungement.

An expungement order results in permanent erasure and destruction of the record of the qualifying offense. Expungement of the record for a qualifying offense will have no effect on the existence of other records related to the same or other incidences.

Sealed or Expunged Records

It is important to understand the policy reasons that support the sealing and expunging of records. As the SJC noted in its recent decision, whether to seal a record ultimately relies on a defendant’s and the Commonwealth’s interests in keeping the information private, which includes “reducing recidivism, facilitating reintegration, and ensuring self-sufficiency by promoting employment and housing opportunities for former criminal defendants.”

With regard to expungement, the SJC stated that by specifically creating the qualifying reason-based factors, the Legislature itself had identified a good cause basis for expungement. Records created as a result of one of those factors “have virtually no bearing on whether the petitioner might commit a criminal act in the future, and their value to society therefore is vanishingly small.”

Once sealed or expunged, a record cannot disqualify a person from examination, appointment, or application for employment with any government agency, or in determining if that person is suitable for the practice of any trade or profession requiring a license.

Any application for employment that seeks information concerning prior arrests or convictions must contain the statements required by the statutes relating to sealing records and expungement of records regarding the applicant’s ability to answer ‘no record’ when records have been sealed or expunged. Employment applications should be reviewed to ensure compliance with the required language.

This article gives a general description of sealed and expunged criminal records. However, procedures for and the effects of sealing and expungement are complicated. Therefore, interested individuals should carefully review Massachusetts General Laws, Chapter 276, sections 100A-U, or seek advice from an attorney.

Justice Mary-Lou Rup is a retired Massachusetts Superior Court judge and now senior counsel at Bulkley Richardson. Briana Dawkins is also an attorney at Bulkley Richardson, where she practices in the employment and litigation groups.

Law Special Coverage

Recent Case Shows the Danger Lurking with ‘Stray Remarks’

 

A recent Massachusetts Appeals Court decision, reversing a lower-court decision to dismiss an age-discrimination complaint, may have repercussions for businesses of all kinds facing a transition in their workforce. The issue — and the ruling — go deeper than just the perceived discrimination itself, however, delving into questions about how much exposure an employer attracts by simply discussing matters of age in the workplace.

By Erica Flores, Esq. and John Gannon, Esq.

 

Erica Flores

Erica Flores

John Gannon

John Gannon

It is common knowledge that older workers are a major part of this country’s workforce. According to U.S. Census Bureau statistics, more than 35% of all essential workers are over age 50, and nearly 15% are over age 60. As the Baby Boomer generation approaches retirement age, employers often wonder whether they can talk to their employees about their retirement plans. Is this allowed, or does it run afoul of age-discrimination laws?

The short answer is that general discussions about retirement plans are fair game. However, the conversation should always be about succession planning and/or transitioning of job duties. And, of course, suggestions about needing “younger” workers must be avoided.

A recent decision from the Massachusetts Appeals Court demonstrates the risks associated with subtle remarks about an aging workforce population coupled with an organizational need to make room for “junior-level talent.”

In Adams v. Schneider Electric USA, the Appeals Court reversed a lower-court decision that dismissed an age-discrimination lawsuit of a 54-year-old employee. The plaintiff in that case was an employee who worked for his employer for many years as an electrical engineer. In January 2017, the employer laid off the employee as part of a larger reduction in force (RIF) related to cost-cutting strategies. The RIF laid off a total of eight employees, all of whom were over age 50. In fact, the employer conducted a series of RIFs over a period of just 10 months that, when combined together, cut 24 employees, all but two of whom were over age 50.

“General discussions about retirement plans are fair game. However, the conversation should always be about succession planning and/or transitioning of job duties. And, of course, suggestions about needing “younger” workers must be avoided.”

The employee sued, claiming his employer terminated him on the basis of his age in violation of Massachusetts law. The lower court dismissed the case before trial, but a divided Appeals Court reversed that decision, concluding that the employee had pointed to enough evidence of age discrimination to require a jury to decide the case.

 

Evidence of Age Discrimination

The majority opinion, joined by three of the five judges who decided the case, found that the Trial Court should not have dismissed the case for multiple reasons. First, the court concluded that there was evidence of a high-level plan to replace aging employees with “early-career” talent and recent college graduates, “from which a jury could find that the RIF itself was tainted even if the person who selected the employees for the RIF [did so] neutrally.” Among this evidence was an October 2015 email from a vice president in the IT department telling an HR professional that the employer needed “age diversity” and “young talent.”

Notably, the comments relied on by the court — including the references to “creating space” for “junior-level talent” and a potential early-retirement program — did not reflect age bias on the part of the person who actually made the decision to include the employee in the RIF. The decision maker had completely neutral, business-based reasons for laying off the plaintiff. In fact, there was evidence in the record that suggested the decision maker and the plaintiff were long-term friends.

Even so, the court felt that there was also evidence demonstrating that, although the decision maker himself did not harbor discriminatory motives, he did have meetings with higher-level managers who were the supposed “architects” of employer’s plan to clear out older employees. Finally, the court pointed to the all-to-obvious fact that all of the employees selected for the January 2017 RIF were over age 50. This fact alone suggested the decision maker “understood the company strategy to discriminate.”

 

Takeaways

Interestingly, the Adams decision was the subject of a strong dissenting opinion joined by two members of the five-judge Appeals Court panel. Among other things, the dissent argued that the majority had departed from the long-standing legal rule that “stray remarks” are insufficient to prove discriminatory bias by holding that the rule can never apply to a manager who has the power to make employment decisions. The dissent also took issue with its apparent intolerance for modern succession planning in industries dominated by aging employees.

For now, though, the majority opinion remains the law, and it will certainly be relied upon by attorneys trying to avoid dismissal in employment cases. What does this mean for employers? For one, it means that management-level employees who have the authority to hire, discipline, promote, terminate, or make other employment decisions must be even more careful about remarks they make in the workplace. Comments that may have previously been brushed aside by courts as nothing more than “stray remarks” may now be considered evidence of a high-level corporate strategy to discriminate against employees in all manner of employment decisions, not just RIFs.

Also, employers who are thinking about succession planning need to be extra careful about the rhetoric they use to describe their concerns, needs, wants, and strategies, especially if their plans involve eliminating jobs. Partnering with employment counsel at an early stage can help reduce legal risk and shield sensitive conversations from being used in any ensuing litigation.

 

Erica Flores and John Gannon are partners with the Springfield-based law firm of Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including the Age Discrimination in Employment Act; (413) 737-4753; [email protected]; [email protected]

Law

Use with Caution

By Amelia J. Holstrom, Esq. and Trevor Brice, Esq.

 

Over the past several years, employers have turned to various software-based recruitment and employment screening tools to evaluate applicants and employees. The software, which uses artificial intelligence and various algorithms to make decisions, often helps employers evaluate more applicants in a shorter period of time, select individuals for interviews, or evaluate current employees for raises or advancement at the business.

But could the use of this software be creating legal liability for your business? Maybe.

In May, the Equal Employment Opportunity Commission (EEOC), the federal agency that enforces federal anti-discrimination in employment laws, issued guidance to employers, titled “The Americans with Disabilities Act and the Use of Software, Algorithms, and Artificial Intelligence to Assess Job Applicants and Employees.” The guidance addresses three main areas, or ways, in which software-based screening tools may violate the Americans with Disabilities Act (ADA), if employers are not careful.

First, the EEOC guidance reminds employers that if their software-based screening tool does not have a process for individuals to request accommodations that may be necessary for an individual with a medical condition to be fairly and accurately rated by the software or use the software, it may violate the ADA. Under the ADA, employers are required to provide reasonable accommodations to applicants and employees. For example, it may be a reasonable accommodation to allow a visually impaired applicant or employee to be evaluated through a non-computer-based screening tool.

Amelia J. Holstrom, Esq.

Amelia Holstrom

Trevor Brice

Trevor Brice

“The EEOC warns employers that without proper safeguards, a software-based screening tool may unintentionally (or intentionally) screen out individuals with disabilities.”

Second, the EEOC warns employers that without proper safeguards, a software-based screening tool may unintentionally (or intentionally) screen out individuals with disabilities. The EEOC specifically referenced ‘chatbot’ screening tools, which are designed to engage in communications online through texts and emails. A chatbot might be programmed with an algorithm that rejects all applicants who mention in conversation with the chatbot that they have a gap in their employment history. If this gap in employment is due to a medical condition, then the chatbot may function to screen out the applicant unlawfully due to their disability, even though the individual would be capable of performing the essential functions of the position for which they were applying with (or without) an accommodation.

Finally, the EEOC guidance reminds employers that if a software-based screening tool asks questions that require employees to disclose medical conditions or other disability-related information, it may be an unlawful, disability-related inquiry that violates the ADA.

The guidance also cautions employers that they can be liable for discrimination caused by software-based screening tools, even if the employer did not create the tool. In other words, utilizing software developed by an outside vendor does not insulate an employer from liability.

Although the EEOC highlighted several issues that might make the use of software-based screening tools problematic under the ADA, it also provided employers with guidance on steps they can take to help mitigate their risk, including, but not limited to: making it clear how an individual may request an accommodation related to the screening tool or the use of the software; promptly and appropriately responding to all requests for such accommodations; thoroughly questioning the methodology used by the software the businesses uses, including asking the software provider whether it was developed with individuals with disabilities in mind and what the software provider did to make the interface accessible to individuals with disabilities; and asking the software provider if it attempted to determine if any algorithm used by the software disadvantages individuals with disabilities.

Employers should not expect the concerns raised by the EEOC over the use of software-based screening tools to stop at the ADA. Just weeks before the EEOC issued this guidance, the EEOC filed a lawsuit against iTutorGroup Inc., Shanghai Ping’An Intelligent Education Technology Co. Ltd., and Tutor Group Ltd., alleging that the companies’ online recruitment software was programmed to automatically reject female applicants over age 55 and male applicants over age 60 in violation of the Age Discrimination in Employment Act.

Given the growing use of software-based screening tools, it is imperative that employers thoroughly evaluate their own software and their vendor-provided software for any possible discriminatory bias and seek legal advice with regard to their evaluation whenever appropriate. u

 

Amelia Holstrom is a partner with the Springfield-based law firm Skoler Abbott, and Trevor Brice is an associate with Skoler Abbott; (413) 737-4753.

Law

Rallying Cry

On July 13, the Massachusetts State Senate unanimously passed a bipartisan bill protecting providers, residents, and visitors to the Commonwealth who engage in legally protected reproductive and gender-affirming healthcare.

“An Act Expanding Protections for Reproductive and Gender-affirming Care” includes provisions preventing the Commonwealth’s cooperation with ‘bounty-style’ anti-abortion and anti-gender-affirming care laws in other states, mandates health-insurance coverage for abortion and abortion-related care with no cost sharing, ensures access to emergency contraception, and provides confidentiality to providers of reproductive and gender-affirming care.

“We cannot let other states threaten Massachusetts pregnant and transgender people or the providers who take care of them,” said Senate President Karen Spilka. “Massachusetts will not waver in protecting our residents’ rights. The Legislature prepared for the end of Roe v. Wade by passing the ROE Act in 2020, which ensured the continuation of reproductive healthcare services when we could no longer count on the federal government. Now, we must prepare our Commonwealth for the potential further erosion of our rights and protections at the federal level. I want to thank my colleagues in the Senate for their swift and decisive action.”

The bill, filed by state Sen. Cindy Friedman, expands on her amendment to the Senate FY 2023 budget, which was filed in response to the leaked U.S. Supreme Court opinion on Dobbs v. Jackson and adopted by the Senate in late May.

Friedman, Senate chair of the Joint Committee on Health Care Financing and the lead sponsor of the bill, called the legislation “a monumental step forward in Massachusetts, as we are seeing increasingly more anti-abortion and anti-gender-affirming care legislation rise across the country. We must do everything to protect the rights of our providers, patients, and visitors to the Commonwealth. As we further realize the impact of the U.S. Supreme Court’s decision in Dobbs v. Jackson in our Commonwealth, we will continue to fight these attacks on reproductive and gender-affirming care with meaningful action.”

State Sen. Adam Gomez added that the bill sends a clear message: “we will not let the rights of pregnant or transgender people be threatened in our state. The decision handed down a few weeks ago from the United States Supreme Court means the criminalization of a deeply personal healthcare decision made between a child-bearing person and their doctor. This criminalization will disproportionately impact low-income communities, communities of color, and single parents. This legislation will ensure that these vulnerable groups will not have to worry in our state when it comes to their reproductive health.”

Under the legislation, physicians, nurses, physician assistants, pharmacists, psychologists, genetic counselors, and social workers are insulated from legal action in Massachusetts courts as a result of providing healthcare services that are legal in Massachusetts. This language specifically protects reproductive and gender-affirming healthcare, which has been the target of laws passed in states like Texas and Oklahoma that seek to limit this critical care beyond their states’ borders. This bill also allows anyone who faces abusive litigation in another state for providing legally protected reproductive and gender-affirming care services to sue in Massachusetts court to obtain a judgment, including actual damages, expenses, costs, and reasonable attorney’s fees.

The governor would be prevented under the legislation from extraditing someone to another state to face charges for an abortion, gender-dysphoria treatment, or another protected service, except when required by federal law or unless the acts forming the basis of the investigation would also constitute an offense if occurring entirely in Massachusetts. Law-enforcement agencies in Massachusetts would also be prohibited from assisting any investigation by federal authorities, another state, or private citizens related to legally protected reproductive and gender-affirming healthcare provided in the Commonwealth.

Courts would similarly be barred from ordering anyone in Massachusetts to testify or produce documents for lawsuits involving those practices, and judges could not issue any summons in a case concerning those healthcare services unless the offense in question would also violate Massachusetts law.

An amendment was adopted during debate requiring public higher-education institutions to work with the Department of Public Health (DPH) to create a medication-abortion readiness plan which must provide medication abortion at a health center on campus or provide a referral to a nearby healthcare facility offering abortion care. It also creates a trust fund for public higher-education institutions to support the implementation of their medication-abortion readiness plans.

“The Senate has taken important steps to confront the threats posed reproductive and gender-affirming healthcare in our state posed by new, draconian laws being passed across the nation,” said state Sen. Michael Rodrigues, chair of the Senate Committee on Ways and Means. “Though these changes are unprecedented, we in Massachusetts are continuing to demonstrate that we are prepared to defend the rights of all of our residents.”

In response to stories about women not receiving access to abortion care in Massachusetts currently allowed under the existing state law, an amendment was adopted to clarify the circumstances that treating physicians must consider when determining whether to provide later-in-pregnancy abortion care. The amendment requires such determinations to be made by the treating physician and patient. To ensure hospitals are complying with the law, the amendment also requires healthcare facilities providing these services to file their procedures and processes for providing services consistent with the law with DPH.

Additional amendments would identify areas of the state with limited abortion access to increase care to those areas and allow pharmacists to prescribe and dispense hormonal contraceptive patches and self-administered oral hormonal contraceptives. The bill implements a statewide standing order to ensure that emergency contraception can be dispensed at any pharmacy in the Commonwealth.

In addition, the legislation requires the Group Insurance Commission and commercial health-insurance carriers to cover abortions and abortion-related care and ensure Massachusetts patients are not charged a cost-sharing amount, such as deductibles, co-payments, or similar charges, for such coverage. It also requires MassHealth to cover abortion and abortion-related care and ensures enrollees are not charged a cost-sharing amount for prenatal care, childbirth, postpartum care, abortion, or abortion-related care.

The bill also allows individuals engaged in the provision, facilitation, or promotion of reproductive and gender-affirming healthcare to enroll in the Secretary of the Commonwealth’s Address Confidentiality Program. This action will increase the safety of those who may face threats or violence outside of the workplace in their personal lives or at their residences.

With a version of a bill expanding protections for reproductive and gender-affirming care having passed both branches of the Legislature, a conference committee will be appointed to resolve differences between the bill’s two versions.

“I was proud to vote yes on comprehensive legislation to strengthen reproductive and gender-affirming protections in Massachusetts,” state Sen. Jo Comerford said. “Safe, legal, and affordable reproductive and gender-affirming healthcare are public-health necessities. I’m grateful to Senate President Spilka, Senator Cindy Friedman, and Senate colleagues for leading a robust response to the national assault on reproductive and trans rights, and I look forward to beginning work on the Senate Reproductive Health Working Group with a strong focus on equity.”