Home Posts tagged Law

New England Employers Face New DEI in 2026

By Contributor
Law

Culture Shock

By Tanzi Cannon-Eckerle, Esq.

 

By now, most New England employers have heard the rumblings: the Equal Employment Opportunity Commission (EEOC) is taking a dramatically tougher stance on workplace practices it views as ‘DEI-motivated discrimination.’ What began as a political undercurrent in 2025 has become a fullscale regulatory pivot in 2026, and companies across Massachusetts, Connecticut, and Rhode Island are realizing that the DEI landscape they have operated in for a decade has shifted beneath their feet.

The message from Washington is blunt. EEOC Chair Andrea Lucas has made clear that any employment decision — hiring, promotion, training, or even internal programming — that factors in race, sex, or similar protected characteristics may trigger scrutiny in 2026. The agency is actively reviewing organizations with DEI policies, affinity groups, or diversity-focused hiring or marketing initiatives, signaling a broad and aggressive enforcement posture.

Tanzi Cannon-Eckerle

Tanzi Cannon-Eckerle

“Any employment decision that factors in race, sex, national origin, or other protected characteristics — even with the best of intentions — may now trigger scrutiny.”

That means any employment decision that factors in race, sex, national origin, or other protected characteristics — even with the best of intentions — may now trigger scrutiny. Hiring pipelines, mentorship programs, employee resource groups (ERGs), and even internal messaging are being examined through a new, far more conservative lens.

For New England employers who have long prided themselves on inclusive cultures and progressive workforce strategies, the shift is more than a compliance headache. It is a strategic reckoning.

And increasingly, companies are turning to an unexpected ally to navigate it: fractional general counsel.

 

A New Enforcement Era Arrives

The EEOC’s 2026 enforcement strategy is rooted in a strict interpretation of Title VII, one that treats DEI initiatives as potential sources of ‘reverse discrimination.’ The agency is signaling heightened attention to:

• Hiring or promotion practices referencing demographic goals;

• Diversity-focused recruiting pipelines;

• ERGs organized around protected characteristics;

• Training or leadership programs aimed at specific demographic groups;

• Public DEI commitments that imply preferential treatment; and

• Workplace policies tied to national origin, religion, or COVID19 vaccination.

According to reporting, the agency is even reviewing companies’ websites and public statements to identify DEI-related language. In other words, if it is on your website, it is fair game.

This is particularly relevant in New England, where employers — from Boston’s tech corridor to Springfield’s manufacturing base to Providence’s healthcare systems — have spent years building DEI programs as part of their brand identity. Many now find themselves asking the same question: what does compliance look like in 2026?

 

The New England Challenge: Values vs. Liability

New England companies tend to be values-driven. They care about fairness, community, and workplace culture. They have invested in DEI not because it was trendy, but because it aligned with who they are.

But the EEOC’s new posture means that even well-intentioned programs can create legal exposure. A mentorship program for women in leadership? Risky. A hiring initiative aimed at increasing representation? Risky. An ERG for employees of color? Risky unless structured carefully.

The challenge is not abandoning inclusion — it’s modernizing it. And that’s where fractional general counsel has stepped into the spotlight.

 

Why Fractional General Counsel Is Suddenly in Demand

Most midsized companies in New England don’t have a fulltime general counsel. They rely on outside firms for litigation and occasional advice, but they don’t have someone embedded enough to understand their culture, operations, and risk profile.

Fractional general counsel (GC) fills that gap. It’s a model that gives companies ongoing, strategic legal support, without the cost of a full-time executive. And in a regulatory environment that is shifting monthly, that combination of expertise and affordability is proving invaluable.

Fractional GCs are helping companies:

• Audit DEI-adjacent programs;

• Redesign policies and training;

• Reframe initiatives around neutral, business-driven goals;

• Strengthen documentation and decision making;

• Respond to EEOC inquiries;

• Coordinate with outside litigators when needed; and

• Keep leadership informed as the legal landscape evolves.

In short, they are giving companies a way to stay compliant without abandoning the values that define them.

 

What Fractional General Counsel Actually Does in This Moment

The role goes far beyond reviewing handbooks. In the context of the EEOC’s 2026 crackdown, fractional GCs are functioning as strategic advisors, risk managers, and operational partners. Their roles include:

Conducting DEI Risk Audits. Fractional GCs review everything from hiring practices to ERGs to training modules. They identify where language, structure, or intent may now be interpreted as discriminatory. This includes subtle issues — like job postings that reference ‘diverse candidates’ — that once signaled inclusion but now raise red flags.

Rebuilding Programs Around Legally Defensible Principles. Instead of demographic targets, companies are shifting toward skills-based leadership development, equal-access mentorship programs, workplace civility and respect initiatives, and culture building open to all employees. The goal is to preserve the spirit of inclusion while eliminating legal exposure.

Training Leadership and HR. Managers and HR teams are often the ones making decisions that later get scrutinized. Fractional GCs provide practical training on objective hiring criteria, documentation standards, avoiding demographic preferences, handling complaints, and responding to employee concerns. This reduces risk and increases consistency.

Strengthening Documentation. Documentation is everything. Fractional GCs help companies standardize interview processes, build defensible evaluation frameworks, ensure that promotion and discipline decisions are job-related, and create clear, consistent records. This protects against both traditional and reverse discrimination claims.

Managing EEOC Inquiries. When the EEOC (and their state counterparts MCAD, CHRO, and RICHR) come calling, companies need a steady hand. Fractional GCs coordinate responses, manage communication, gather documents, work with outside litigators if necessary, and keep the business’s perspective front and center. This prevents the operational disruption that often accompanies regulatory investigations.

Providing Ongoing Monitoring. The 2026 enforcement shift is not a one-time event. Fractional GCs stay on top of new guidance, court decisions, agency priorities, and state-level developments.

 

The New England Advantage: Culture Without the Liability

New England companies do not need to abandon inclusion. They simply need to express it in ways that comply with the evolving legal landscape.

The employers who will thrive in this 2026 anti-DEI environment are those who maintain strong workplace cultures, avoid demographic preferences, focus on equal access and opportunity, build legally defensible programs, and stay ahead of regulatory shifts.

 

Attorney Tanzi Cannon-Eckerle is principal and chief legal officer at General Counsel by Cannon, PLLC. Based in Western Mass. and serving companies across the region, the firm focuses on labor and employment law, business law, and fractional general counsel services. With deep experience advising organizations on DEI-related compliance, regulatory risk, and workforce strategy, General Counsel by Cannon helps businesses modernize their policies, strengthen their culture, and stay ahead of the EEOC’s evolving enforcement priorities, without the cost of a full-time legal department; www.gcbycannon.com; [email protected]

What a Recent Decision Means for Restaurant, Bar Owners

By Contributor
Law

A Liquor License Lesson

By Joshua M. Goldstein, Esq.

 

Operating a restaurant, bar, event hall, or other business that utilizes a liquor license is hard enough without accidentally tripping over a clause in your lease that turns into a legal disaster. The Massachusetts Supreme Judicial Court’s recent decision in Nicosia, et al. v. Burn LLC, et al. (2025) is a good reminder that, when it comes to liquor licenses, contract terms still matter, and creative financing can come with some very sobering consequences.

 

How This All Started

This case arose out of a fairly common commercial setup and straightforward set of facts. N&M Trust VII (Nicosia) leased a commercial property in downtown Boston to Burn, LLC (Burn). As part of the lease agreement, Nicosia sold its liquor license associated with the property to Burn for the sum of one dollar. The lease terms included an ‘anti-pledge’ provision, which prohibited Burn from pledging the liquor license as collateral for a loan, and provided that any pledge in violation of such provision constituted a default under the lease. In addition, at the end of the lease term, Burn was required to transfer the liquor license back to Nicosia for one dollar.

Joshua M. Goldstein

Joshua M. Goldstein

“Pledging a liquor license as collateral may seem like an easy solution when money is tight, but if doing so violates your lease terms, it can lead to lease termination, an awkward conversation with your landlord, and very expensive consequences.”

Before the lease term expired or otherwise terminated, Burn pledged the liquor license to its principal, Brian Lesser, as collateral for a loan to Burn in the amount of $445,000. When Nicosia discovered this, it declared Burn in default of the lease, terminated the lease, and demanded the return of the license.

Nicosia initiated the lawsuit, and Burn challenged its claims, arguing that the lease’s anti-pledge provision is unenforceable as it violated public policy and Massachusetts General Laws c. 138 § 23, the statute which governs and expressly permits the pledge of liquor licenses.

 

The Court’s Holding

The court disagreed with Burn’s argument and upheld the anti-pledge provision as enforceable. The court reasoned that the clause did not violate public policy concerns as financing agreements among commercial sophisticated parties do not generally raise public policy concerns.

Further, the court distinguished this case from its decision in Beacon Hill Civic Assoc. v. Ristorante Toscano Inc. (1996), where it found that a private agreement not to apply for a liquor license was unenforceable because it thwarted public participation. In the case of Nicosia, et al. v. Burn LLC, et al., the anti-pledge provision does not interfere with public participation but rather is only a limitation on the licensee’s ability to use the liquor license as collateral to secure financing. No loopholes. No judicial sympathy for “but we needed financing.”

 

Why This Matters to Business Owners

Liquor licenses are often viewed as valuable assets, and they can be to a business. However, Nicosia makes it clear that their value can be tightly controlled by contract. Here are the key takeaways:

• A Liquor License is Not Always ‘Your’ Asset. Even if a license is technically in your business’s name, contractual restrictions can dramatically limit what you can do with it. If your lease says “no pledging,” that means no pledging no matter whether the lender is a bank, a private investor, or your own business partner.

• Courts Will Enforce Anti-pledge Provisions. This decision confirms that Massachusetts courts will uphold contractual limits on liquor licenses so long as they don’t limit a prospective licensee’s ability to participate in the licensing process or conflict with statute. Public policy is not a magic eraser for inconvenient lease terms.

• Financing Shortcuts Can Trigger Long-term Pain. Pledging a liquor license as collateral may seem like an easy solution when money is tight, but if doing so violates your lease terms, it can lead to lease termination, an awkward conversation with your landlord, and very expensive consequences.

 

Practical Advice for Local Restaurant and Bar Owners

If you currently operate, or plan to operate, a business that utilizes a liquor license, this case offers some practical lessons:

• Read the Entire Lease (Yes, Even That Section). Anti-pledge clauses are easy to overlook, especially when they’re buried in lengthy lease sections or among boilerplate provisions. But as this case shows, it is very important to read the entire lease, whether you have an existing lease or are considering entering into a new lease. Further, it is important to review the lease to ensure that any anti-pledge provisions apply to real property or personal property other than a liquor license.

• Coordinate Legal Advice Before Financing. Before pledging any business asset as collateral, make sure it doesn’t conflict with your lease or other applicable agreements. A quick legal review can be a lot less costly than litigating or defending a default of a lease.

• Assume Enforcement, Not Flexibility. Courts generally assume that sophisticated parties mean what they sign and expect to be bound by the same. It is very important not to rely on hoping a judge will ‘balance the equities’ later.

 

Final Pour

Nicosia is not flashy, but it’s important. For local business owners, the lesson is straightforward: treat your lease like required reading, and don’t assume that creative financing will survive creative lawyering on the other side.

If you’re ever tempted to pledge a liquor license as collateral without reviewing your lease first, just remember: the hangover from that decision can far outlast the term of the loan.

 

Attorney Joshua M. Goldstein is an associate with Bacon Wilson, P.C. whose practice areas include banking and finance and business and corporate law, with additional specialties including liquor licensing and other licensing matters. He is administered to practice law in the state of Massachusetts and is an active member of the Hampden County Bar Assoc.

Employers Concerned About Broader Immigration Enforcement

By Contributor
Law Special Coverage

ICE at the Door

By Marylou Fabbo, Esq.

 

In 2026, employers across the U.S. are expected to continue to face intensified and broadened immigration enforcement efforts. Executive actions, regulatory shifts, agency‑level mandates, and recent events reflect aggressive enforcement within and outside of the work environment.

ICE (Immigration and Customs Enforcement) has become a household word. Restrictions on enforcement in certain areas, such as schools, hospitals, and places of worship, have been lifted. Unannounced visits to the workplace, expanded audits, and coordination between ICE and other enforcement agencies has strengthened.

In 2025, certain cities, states, and industries were affected more than others when it came to the Trump administration’s efforts to enforce immigration policies. The focus was on agriculture and farming, food processing, construction, healthcare workers, and cleaning and maintenance services because they often employ immigrant workers.

In 2026, efforts have been expanded, and are expected to continue to expand, to employers in all businesses of all types, sizes, locations, and number of employees. All employers, regardless of industry, size, or location, must be prepared for ICE visits to the workplace as well as other potential enforcement actions, such as unanticipated Form I-9 audits conducted by the U.S. Department of Labor.

Marylou Fabbo

Marylou Fabbo

“All employers, regardless of industry, size, or location, must be prepared for ICE visits to the workplace as well as other potential enforcement actions, such as unanticipated Form I-9 audits conducted by the U.S. Department of Labor.”

Importantly, employers must also be prepared for conflicts that may arise when employees or ICE agents engage in actions that may have unintended and serious consequences, such as personal injury.

 

ICE Visits to the Workplace

Immigration agents may go to a workplace to conduct a Form I-9 audit, a raid, or to detain specific people. ICE doesn’t always ring the bell before entering. ICE can enter the public areas of a business, such as the reception area, without permission. Still, ICE does not have the unrestrained authority to stop, question, or arrest someone, even if they are in a public area.

Rather, for access to the private areas of a business, ICE needs either company permission or a judicial warrant. A judicial warrant is from a court and is signed by a judge. Although some agents may present an administrative warrant, that type of warrant is insufficient. An administrative warrant usually says “Department of Homeland Security” or is from an immigration court, and it does not give ICE the right to enter private areas of your business without your permission.

Having a judicial warrant only gives ICE authority to enter the areas identified on the warrant to be searched. Be wary, however. While it is illegal for ICE to enter any private area without a judicial warrant, there have been many reports of ICE failing to adhere to legal standards when entering the workplace, and employees permitting ICE agents to do more than they would otherwise legally permitted to do. Such actions give rise to one of the newer concerns being discussed among employers: whether the deadly results of community enforcement actions having turned violent spread to the workplace.

 

Access to Employees

Attempts to arrest an employee may also lead to physical altercations between ICE agents, the employee at issue, or other employees protecting the employee who is being sought or employees who wish to aid ICE’s efforts.

The desire to assist ICE often derives from U.S. citizens’ concerns about losing employment opportunities to undocumented workers, regardless of whether an employer intentionally employs individuals who are not authorized to live and/or work in the U.S. There is a misconception that all employers who are employing an employee who does not have authorization to work or be present in the U.S. knowingly do so.

For Form I-9 purposes, employers are not required to be document review experts. If the document reasonably appears to be genuine and related to the employee, it is sufficient. Therefore, some employers are shocked when ICE arrives with a judicial warrant to arrest someone who has been a hardworking, long-term employee and who presented what appeared to be genuine Form I-9 supporting documentation.

If a judicial warrant is presented, employers must comply. If ICE has an administrative warrant identifying an employee, the employer does not have bring the agent to the employee or even have to let the agent know if the employee is working that day. That is, if ICE enters the employer’s property at all, it has become more common for immigration officials to stop employees before they pull into the employer’s parking lot. Employers must consider whether they want to have a plan in place if such a circumstance arises.

 

Employers’ Right to Legal Advice

Human resource personnel, the company president, and all other employees can ask to speak to a specific attorney or ask the immigration officer for a list of pro bono lawyers before speaking to immigration authorities or answering any questions. It’s not certain, however, that the request will be granted.

Still, no one is required to speak at all. No one must state where they were born or whether they are in the U.S. legally, sign anything, or group according to country of origin. Employees do not have to show identification or other papers to ICE agents. However, if someone does not cooperate, it is not out of the realm of possibility that ICE would claim that the person is ‘impeding’ their efforts and arrest them. Employers should communicate to employees their position on ICE cooperation even whether or not ICE’s actions appear to be legally supported.

 

Difficult Choices

Employers who violate immigration-related employment laws or lawful enforcement actions can be subject to fines, large penalties, the inability to work on government contracts, and even criminal liabilities. But in today’s immigration landscape, there’s been much contention that even lawful activities can be penalized. An even greater concern is increasing violence.

If an ICE agent demands action that you believe to be illegal, what do you do? Efforts to assert an individual’s rights in the face of an improper action may lead to unexpected — and even dangerous — situations. Most employers do not know what their employees will do who take offense to ICE’s action, whether right or wrong, and also lack action plans when circumstances begin to present a risk of harm to one more people involved.

Regardless of the position employers take on Minnesota’s enforcement-related deaths, they must recognize that similar situations could occur in their workplaces and should consider having a plan in place to address them.

 

Attorney Marylou Fabbo is a senior partner at Skoler Abbott and heads the firm’s immigration team. She has successfully represented the firm’s clients in state and federal courts, as well as the Equal Employment Opportunity Commission, Massachusetts Commission Against Discrimination, Connecticut Commission on Human Rights and Opportunities, and other forums.

How to Make the Most of Your Charitable Giving

By Contributor
Law

Choosing a Cause That Matters

By Gina M. Barry, Esq.

 

As we come to the holiday season, charitable giving comes to the fore. Do you donate money to charity each year? Perhaps you donate to an organization dedicated to finding a cure for an awful disease. Perhaps you choose to benefit organizations that support and encourage positive growth in our youth. Perhaps you decide to support the local animal shelter or abuse prevention.

To reap the most benefit from charitable giving, you must first choose an appropriate charity to benefit from your generosity. There are thousands of charities working within a huge variety of causes from which to choose. Thus, you can be certain there is a charity working to bring positive change in a way that you would love to support. Of course, the causes touched upon above are just a few examples of where your donation can make a difference.

Once you have decided that you would like to support a charitable cause, it is important to determine how you will contribute. Most will choose to donate cash; however, you might also consider donating highly appreciated securities, which would allow you to avoid paying the capital gains tax on those assets. Likewise, the charity also would avoid paying this tax due to its charitable status.

Aside from a monetary donation, you may also donate goods. When purging your household to make way for new holiday items, you can donate those that are gently used, but no longer desired. For example, you may have a pantry full of uneaten, non-perishable food that your family is not eating. Consider filling a couple of grocery bags with this food and donating to your local food pantry.

Gina M. Barry“Donations claimed as tax-deductible contributions for 2025 must be actually paid to the charity on or before Dec. 31, 2025, and it is best always to obtain a receipt for your donation regardless of the amount.”

Likewise, children often grow out of clothes and get bored with their toys while they are still in good repair. Many charities that benefit children would be delighted to receive these clothes and toys to help the children that they serve. Similarly, when you and your old vehicle finally part ways, you do not have to send the vehicle to a junkyard. Many charities accept any vehicle, working or not, as a donation.

If making a monetary contribution or a donation of goods is not possible at this time, consider volunteering your time to your favorite cause. Elder services, animal shelters, hospitals, and soup kitchens are all wonderful places to volunteer. While the time you volunteer is not tax-deductible, any out-of-pocket expenses associated with volunteering are usually deductible. For example, travel expenses to and from the volunteer site, as well as parking fees and tolls, may be deducted.

 

Next Steps

When you have decided which cause you would like to help and in what manner, you are almost ready to make a donation. Be certain the charity has received approval from the Internal Revenue Service (IRS) as being eligible to receive tax-deductible contributions. You can determine the tax-exempt status of an organization either by contacting your local IRS office or by asking the organization for a copy of its ‘letter of determination,’ which is the formal notification the organization receives from the IRS once its tax-exempt status has been approved. Also, IRS Publication 78, Cumulative List of Organizations, is an annual listing of thousands of organizations that can accept tax-deductible donations.

Donations claimed as tax-deductible contributions for 2025 must be actually paid to the charity on or before Dec. 31, 2025, and it is best always to obtain a receipt for your donation regardless of the amount. When considering donating to charity, it is also important to check in with your tax advisor, as there have been some important changes.

For example, starting in 2026, even taxpayers who take the standard deduction (i.e., don’t itemize) can claim a modest ‘above-the-line’ deduction — up to $1,000 for singles and $2,000 for married couples filing jointly. For those who do itemize, deductions for charitable contributions will apply only to the portion that exceeds 0.5% of adjusted gross income. That means the first 0.5% of adjusted gross income in charitable gifts each year will not reduce taxable income. Further, in 2026, the tax benefits of itemized charitable deductions will be capped at 35%, even for those in the 37% marginal tax bracket. Thus, to make the most of your charitable giving, be sure to consult your advisor before making your donations.

Charitable giving is extremely rewarding. You will not only reap the benefit of knowing that you are helping to make a difference in this world, but when tax season comes, you may enjoy a beneficial tax deduction as well.

 

Gina M. Barry is an attorney in the Springfield office 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. She concentrates her practice in the areas of estate and asset protection planning, probate administration, guardianships, conservatorships, and residential real estate.

Why Training, Investigations, and Fair Discipline Are Essential

By Contributor
Law

Strengthening the Workplace

By Kayla Snider, Esq.

 

Coldplaygate, from this past July, serves as a stark reminder that, in an era where the internet, social media, and memes reign supreme, businesses face heightened accountability and more scrutiny than ever.

Unfortunately, you don’t often hear about businesses doing right by their employees. Instead, employers typically make the news when things go wrong and the consequences become significant. And in this day and age, that could mean becoming the next big meme sweeping across the internet.

Between changing laws, evolving social norms, and rising employee expectations, businesses are under constant pressure to get things right. While having written policies and procedures on hand are important, what is more important is how employers practically handle and implement their policies and procedures. Does your employee handbook sit on the shelf and collect dust year after year? Or are you taking a proactive approach to employee relations that truly reveals the integrity of your organization?

Kayla Snider

Kayla Snider

“Does your employee handbook sit on the shelf and collect dust year after year? Or are you taking a proactive approach to employee relations that truly reveals the integrity of your organization?”

It is important to ensure that you handle processes effectively through the entire employee life cycle. This involves adequate training, robust investigations, and fair, business-based reasons for employee discipline.

 

Do Not Treat Training Like a Checkbox

It’s tempting for businesses to treat employee training like a one-and-done requirement, especially when it comes to harassment prevention or workplace ethics. But this line of thinking is dangerous. Training is almost always the first line of defense in preventing workplace misconduct. Moreover, being able to present evidence of proactive training in the workplace can bolster an employer’s defense if a business faces litigation.

Training isn’t just about legal compliance; it’s also about the culture of your business. It’s your first and best chance to set expectations, prevent problems, and show employees you take their rights and responsibilities seriously.

Training should not be limited to avoiding harassment claims. In today’s diverse workplaces, training on unconscious bias, workplace civility, and professional ethics can strengthen team cohesion, reduce conflict, and demonstrate your commitment not only to following the law, but also to being culturally aware and inclusive. Good training should be regular, interactive, and tailored to your workforce. Don’t just focus on what’s illegal — help your people understand what’s respectful, ethical, and expected in your business.

 

Investigations: Not Just a Legal Duty, But a Trust-building Opportunity

When something goes wrong, whether it’s a harassment complaint, bullying, or a policy violation, how an organization responds says a lot. Massachusetts courts have consistently emphasized the need for prompt and impartial workplace investigations when allegations of misconduct arise. But prompt and fair investigations aren’t just about protecting the business; they’re about protecting the people who show up to work for you and support your business day in and day out.

Whether you use an internal HR professional or an outside investigator, the process must be fair, objective, and well-documented. Above all, employees need to know their concerns will be taken seriously. If you address employee concerns promptly and fairly, then it is more likely that employees will feel confident in your reporting system. This helps ensure that employees bring issues to your attention — rather than suffering in silence until they cannot take it anymore and quit, then file a hostile work environment lawsuit in court.

 

Fair Discipline: the Overlooked Cornerstone of Integrity

Let’s talk about discipline. Now, I am sure you are all familiar with the ‘big stuff’ (the formal write-ups or terminations), but what I want to focus on, and what I think really matters, is consistency. Is everyone being treated the same way? If two employees break the same rule and only one is disciplined, that’s a lawsuit waiting to happen.

Businesses should have a clear process for addressing misconduct and should give employees a chance to respond. This isn’t just best practice; it helps demonstrate that the business operates with integrity. Discipline should also be consistent, proportional, and grounded in clearly established policies. This means that anyone who is responsible for disciplining employees should know your policies.

If your business has a policy of progressive discipline, then you should follow that progressive process and, if you are going to skip steps, make sure that you have a good reason to do so that is well-documented.

This leads me to my next point: documentation is also key. Document, document, document. Strong documentation is important not only to create a record for the organization, but also for the employee because they may have questions that are harder to answer if you do not have a record of what happened and why.

 

Bottom Line: Get These Three Things Right

At its core, a strong workplace culture is one that aligns with legal compliance. Training, investigations, and discipline are the three pillars of a responsive and responsible employment environment. And while training, investigations, and discipline sound like dry HR topics, they’re anything but. These practices are where the law meets workplace culture, and they say more about your business than any mission statement ever could.

When employers commit to doing these things right — not just to avoid lawsuits, but because it’s the right thing to do — they create stronger, safer workplaces for everyone.

 

Kayla Snider is an associate attorney with Skoler, Abbott & Presser, P.C., a Springfield-based law firm exclusively practicing labor and employment law for more than a half-century, focusing on litigation avoidance, employment litigation, and labor law and relations.

A Haunting Look at Unexpected Real Estate Problems

By Contributor
Law

Ghosts, Goblins, and Disclosure Laws

By Ryan K. O’Hara, Esq.

 

It’s 9:53 p.m. on Oct. 31. You’ve just shut off the porch lights after an evening of greeting trick-or-treaters. You’d have expected they’d be a bit more excited about the full-sized candy bars you have sprung for, but most kids seemed nervous to approach and quick to leave. One even mentioned he couldn’t believe you’d bought the old Carpenter place. What was that about? No matter — a successful first Halloween in the new neighborhood.

Bone-tired, you slump onto the couch with a sigh. What a week! Closing on a house and moving mid-week with kids and a cat in tow: now, that’s scary. But now, with the costumed hordes dispersed and your own little monsters comatose from the sugar-high crash, there’s nothing between you and some quality time alone with a good movie (and, of course, the leftover candy).

Why can’t you relax, then? Sure, there’s that nagging feeling of being watched you’ve had since you moved in. That’s just adjusting to a new place, though. So what if a lamp or two has turned itself on and off? Old homes have funky wiring. Granted, the rattling chains and heavy footsteps you’ve heard the first few nights have been … interesting, but surely, it’s just the house settling.

Ryan K. O’Hara

Ryan K. O’Hara

“Massachusetts law generally allocates these risks to the buyer. The rule of ‘caveat emptor,’ or ‘buyer beware,’ remains the driving principle in determining liability between buyers and sellers for undisclosed property issues.”

Having rationally dispelled childish thoughts of ghosts and goblins, you settle in to press play — just as a ghoulish apparition manifests, its pallid flesh inches from your face, its abyssal mouth moaning nine terrifying words: “what, the sellers didn’t tell you about the tenants?”

So, who’s to pay the Ghostbusters’ bill? As unlikely as this haunting scenario may seem, the Massachusetts Legislature has, in fact, enacted a statute to dispel any specter of doubt as to a seller’s potential liability for an undisclosed haunting. Under Massachusetts General Laws, Chapter 93, Section 114, “the fact or suspicion that real property may be or is psychologically impacted shall not be deemed a material fact required to be disclosed in a real estate transaction.”

As used in the statute, ‘psychologically impacted’ includes any suspicion “that the real property has been the site of an alleged parapsychological or supernatural phenomenon.” The statute prohibits any “cause of action … against a seller or lessor of real property or a real estate broker or salesman … for failure to disclose to a buyer or tenant that the real property is or was psychologically impacted.”

 

Ghost of a Chance

Though Massachusetts property buyers might not often confront this exact issue, unwelcome surprises with newly purchased real estate are unfortunately common. Disappointed purchasers facing unexpected (and often costly) problems with their property frequently ask who is legally responsible to fix the issue.

Massachusetts law generally allocates these risks to the buyer. The rule of ‘caveat emptor,’ or ‘buyer beware,’ remains the driving principle in determining liability between buyers and sellers for undisclosed property issues. Massachusetts common law puts the burden on prospective buyers to ask questions, seek inspection, and generally conduct whatever due diligence they desire before proceeding to purchase a property.

Sellers do not have an affirmative duty to disclose known or potential issues with property before selling, except in limited instances required by statute or regulation (such as the presence of lead or a septic system). And generally, sellers have no obligation to fix issues with a property that come up after closing (with notable exceptions such as the implied warranty of habitability for new homes sold by builder-vendors).

Of course, this does not mean sellers have carte blanche in selling a property with known issues. If asked a question about their property and choosing to answer, sellers must answer honestly. If a seller makes a representation of a material fact regarding the property that a buyer reasonably relies on in choosing to purchase, and that representation is false, the seller may be liable for negligent or intentional misrepresentation.

For example, if a seller is aware of a flooding issue, is asked about whether there is a history of flooding, and falsely states there is none, they may be liable for damages incurred to remedy future flooding. Sellers also cannot conceal issues and prevent prospective buyers from discovering them without exposing themselves to potential liability for doing so. And for sellers who are selling in the conduct of their trade or business (or for agents representing sellers), different obligations and liabilities could arise under the Massachusetts consumer protection law, Massachusetts General Laws Chapter 93A, if known issues are not disclosed.

Still, in the great majority of scenarios, the risk of undisclosed latent property issues lies with the buyer. Accordingly, it is incumbent on buyers to have appropriate caution in pursuing their purchases.

Buyers can take steps to minimize — but not eliminate — this risk. These include being clear on the inspections and due diligence to which they will be entitled, consulting with seasoned professionals (such as real estate agents, inspectors, and attorneys), ensuring material questions they have regarding the property are asked of sellers, and otherwise thoroughly investigating the property they are purchasing before entering binding agreements or proceeding to close.

 

Bottom Line

Every piece of real property is unique. So is every real estate transaction. If you are buying or selling real estate, or dealing with an issue post-closing, seek advice from trusted professionals to ensure your interests are protected. Otherwise, you may be in for a fright — no matter the time of year.

 

Attorney Ryan K. O’Hara is an associate in the Northampton Office of Bacon Wilson, P.C. He serves on the board of directors for the Hampden County Bar Assoc. and is a participating member of the Hampshire County Bar Assoc., and is licensed to practice law in the state of Massachusetts. The foregoing was presented for information purposes only, is not legal advice, and does not create an attorney-client relationship.

Contested Estates Can Cause Turmoil Within Families

By Contributor
Commercial Real Estate
Law

Trouble in Margaritaville

By Hyman G. Darling, Esq.

 

Over the past couple of years, you may have read about all the famous people who passed away either with no estate planning documents or perhaps documents that were not up to date or complete enough to avoid contest.

In the past two months, there have been several notorious people in the news that are causing lawyers and judges to deal with litigious matters regarding estates. The first estate was Jimmy Buffett’s. In this brewing legal battle, Jane Buffett (his wife) filed a petition to remove her co-trustee of the marital trust, Jimmy’s longtime business manager. It was estimated that the estate was worth approximately $275 million. This trust was to continue for Jane’s lifetime, but she now alleges that the business manager was charging excessive fees, mismanaged the trust, and has become adversarial and hostile toward her.

It is unfortunate this has occurred because now the funds are going to be scrutinized and her legal fees, the trustee’s legal fees, and potentially backup and independent trustees’ fees will be taken from the trust, thus diminishing the funds available to Jane.

Hyman G. Darling

Hyman G. Darling

“It is very important to think clearly about what will happen if the children cannot agree. Perhaps the documents should have a provision stating that, before litigation ensues, the trustees or beneficiaries should be forced to mediate the matter in an attempt to resolve the conflicts without litigation.”

This situation is not uncommon. Clients often wish to name two or more children co-trustees or perhaps powers of attorney, personal representatives (formerly called executors), or healthcare proxy agents. The clients believe the children would get along and make decisions together. However, when one decision maker does not agree with the other, it places the client or their family in a precarious situation because, if they cannot agree, there is a stalemate until such time as either a mediator or court makes a decision as to what is correct or who should make the appropriate decisions.

Some clients feel that the oldest child should serve, some clients feel that the child who is in business should serve, and others believe they should have an independent trustee so that this situation does not occur.

Oftentimes, however, the children cannot agree as to what is best for the parent or for the ultimate beneficiaries of the trust. Therefore, it is very important to think clearly about what will happen if the children cannot agree. Perhaps the documents should have a provision stating that, before litigation ensues, the trustees or beneficiaries should be forced to mediate the matter in an attempt to resolve the conflicts without litigation. Often, once litigation is filed, there is a line drawn in the sand and no turning back, which causes perpetual disharmony in the family.

 

Dollars and Sense

Another significant celebrity in the news is Jeff Bezos, with his prenup and recent Venice wedding. Since the Amazon founder did not have a prenuptial agreement with his first wife, it was clear to him that he should have a prenuptial agreement for this marriage to Lauren Sanchez.

Although there were somewhat disparaging comments regarding her wedding gown, the location, the cost of the wedding, and the numerous celebrity guests, the reporters did not pay much attention to the prenuptial agreement, the details of which are not public. However, the prenuptial agreement presumably would provide that, if the marriage were to be dissolved or he were to pass away first, his wife would receive a portion of the assets based on how many years he was married to her, or perhaps based on the size of his estate.

While most of you who are reading this do not have an estate the size of Bezos’s (although his estate is reduced by $36 billion in Amazon stock he paid to his first wife), it is important to consider what would happen to your assets if you die leaving assets to your children. Perhaps your children’s marriages are not the most sound, and you wish to be sure that the children or their children will receive assets. Therefore, perhaps a trust should be established for them, or maybe leave some assets to your children and some assets to the grandchildren in order that the in-law (sometimes referred to as the out-law) would not receive this unintended inheritance.

 

Bottom Line

The lessons here are not only that documents need to be prepared, but significant thought should be given to the language in the documents, the individuals who are named or not named, and the distribution of those assets. Also to be considered are long-term care issues and tax issues to maximize the amount that will be passing to the next generation.

Of course, charities should also considered in estate planning documents, not only to minimize taxes, but also to carry on the legacy built during one’s lifetime.

 

Hyman Darling works in the Springfield office of Bacon Wilson. He is licensed to practice law in Massachusetts and the U.S. District Court District of Massachusetts. He is an active member of the National Academy of Elder Law Attorneys and is a certified elder law attorney. Additionally, he is a member of the Special Needs Alliance and the Hampden County Bar Assoc.

The Ins and Outs of a Legally Compliant Reduction in Force

By Contributor
Law

Avoiding Layoff Pitfalls

By John Gannon, Esq.

 

Last month, on Independence Day, President Trump signed into law the One Big Beautiful Bill Act (OBBB), a nearly 1,000-page bill addressing significant federal tax and spending policies. According to the White House, the OBBB will act “as a catalyst for job creation, domestic investment, and long-term growth.”

But critics are not so sure the legislation will boost job growth. Indeed, many are concerned that deep spending cuts to social safety net programs such as Medicaid and food stamp benefits, coupled with the end of tax credits tied to clean energy, will cause many Americans to lose their job. One study estimates that 1.22 million jobs could be lost in 2029 due to Medicaid and SNAP cuts.

Given these deep spending cuts, coupled with what seems like daily (and sometimes hourly) uncertainly over foreign tariffs, the Trump administration is leading many businesses to consider cutting labor costs, even if only for the short term. In light of this, employers need to understand the legal and practical ramifications when implementing a reduction in force (RIF), which is a more formal term for layoffs. Key aspects include understanding the relevant legal risks, selecting employees fairly, and providing proper communication and support.

John Gannon

John Gannon

“Employers need to be able to provide legitimate, business-based reasons for implementing a workforce reduction. These typically involve economic considerations, such as the loss of key contracts or higher material costs, but could also be the product of a department or company-wide reorganization.”

Legal Issues

To start, employers need to be able to provide legitimate, business-based reasons for implementing a workforce reduction. These typically involve economic considerations, such as the loss of key contracts or higher material costs, but could also be the product of a department or company-wide reorganization. Whatever the reason(s), businesses need to be able to explain in crystal-clear terms why people are losing their jobs.

There are also a host of employment laws that businesses need to be cognizant of when implementing a RIF. In a large-scale workforce reduction, the most important of these laws is the Worker Adjustment and Retraining Notification (WARN) Act, which requires 60 days notice to all affected employees in the event of a mass layoff or plant closing.

The penalties for failure to comply with WARN are steep. WARN Act violations include back pay and benefits for up to 60 days for each affected employee, civil penalties of up to $500 per day of violation, and potential attorneys’ fees for successful lawsuits. Needless to say, determining whether the WARN Act applies is always step number one when businesses are considering a RIF.

Next, employers must ensure that the selection criteria used to determine who will be included in the RIF are non-discriminatory and based on legitimate business needs. This means reasons for selecting an employee for the RIF cannot be tainted by bias based on age, race, gender, or other protected characteristics, including use of Paid Family and Medical Leave or sick leave protected by the Massachusetts Earned Sick Time law.

To that end, employers should develop an documented selection criteria plan for the decision makers prior to announcing the end result to employees. Establish selection factors with the company’s legitimate business needs in mind, trying to keep the selection process focused on objective, legal criteria as much as possible (such as seniority, elimination of unnecessary categories such as part-time and temporary, elimination or consolidation of unnecessary positions. etc.).

Taking this one step further, employers should consider conducting a detailed analysis of the potential for disparate impact discrimination in a workforce reduction. Disparate impact discrimination occurs when a policy, practice, or decision-making process of an employer that appears to be neutral has a negative impact on a protected group of employees.

For example, if a high percentage of those selected for layoff are over age 40, and a significant amount of those retained are under 40, there is a risk that someone will file an age discrimination claim and argue that the method used to evaluate employees had a disparate impact on those over 40, and, therefore, led to their separation.

Disparate impact testing helps organizations recognize and address biases that might exist within their decision making process, even when there’s no intent to discriminate. We suggest that any disparate impact analysis be conducted by an attorney so that any problematic data that is discovered would be protected from disclosure in lawsuit by the attorney-client privilege.

Finally, employers need to be aware of wage payment obligations for those who are laid off. Under the Massachusetts Wage Act, employees who are laid off as part of a RIF must be paid all earned wages — including pay for all accrued and unused vacation — on their last day of employment. Also, if a worker is subject to the terms of an employment contract (as opposed to be employed at-will), that employee might be entitled payout if the employment relationship ends prior to the expiration of the term set out in the employment contract.

 

Practical Considerations

Employees who are let go as part of a RIF are likely going to expect severance pay to help pay the bills while they look for new employment. That said, there is nothing that requires employers to offer separation agreements to at-will employees being laid off (note that this might be different if the employee is subject to the terms of an employment contract).

However, most employment lawyers and HR professionals will tell you that offering at least some severance, while not legally required, is a best practice. This is because, as noted above, it provides departing employees with some level of financial stability while they are in between jobs. Severance packages also often include payments for continued health insurance or other benefits, easing the transition and potentially reducing out-of-pocket medical expenses for departing employees.

Finally, obtaining signed severance agreements from departing employees mitigates legal risk, as the agreement should include a legally compliant release of claims against the employer. Stated otherwise, employees accept the severance payments, and in exchange, they agree not to bring a legal action against the company. We see this as a win-win for the employee and the employer.

Finally, as far in advance as possible, businesses need to start developing a clear and transparent communication strategy that will be used to explain the RIF to the workforce. This strategy should involve two messages — one for the entire workforce that explains the business needs for the RIF, and another message that is tailored to those who are affected by the RIF.

For those who will be losing their jobs, conduct private meetings to deliver the news and discuss next steps. This meeting should go over the terms of the severance package, if one is being offered. While the meeting should be brief, employees should be given some time to discuss the positives and negatives of their employment experience, as well as ask questions related to post-employment issues such as unemployment and health insurance continuation.

As for the remaining employees, the business should have a plan in place to discuss how the RIF will affect their day-to-day duties. Is there a plan in place to replace the departing workers if business circumstances improve? Will the RIF lead to longer days and more demands for the remaining employees? Does the company plan to lay off more employees within the next few months?

These types of questions, as well as the psychological impact associated with many co-workers (and friends) losing their jobs, is often referred to as workplace survivor syndrome. Leaders in the organization must be prepared to answer questions from remaining employees about their ‘new normal,’ as well as listen and respond to their concerns and fears, in order to avoid workplace survivor syndrome causing more negative workplace ripples than the RIF itself.

Implementing a RIF is no small task. There are serious legal and practical considerations that businesses need to consider as soon as potential layoffs are a topic of conversation during leadership meetings. Be sure to engage experienced employment counsel early on in the process so businesses leaders do not get caught in traps for the unwary during a workforce reduction.

 

John Gannon is a partner with Springfield-based law firm Skoler, Abbott & Presser, P.C., a law firm exclusively practicing labor and employment law for more than a half-century, focusing on litigation avoidance, employment litigation, and labor law and relations. He specializes in employment law and regularly counsels employers on compliance with state and federal laws; (413) 737-4753.

Consider These Common Myths That Get Employers Sued

By Contributor
Law Special Coverage

Can I Fire Someone for That?

By Michael Lewis, Esq.

Employers regularly wonder: “can I fire someone for that?” You might assume the answer is simple, especially in an at-will state like Massachusetts. But the reality is more complex. Missteps can land your business in court. Here’s how to avoid them and keep your company focused on growth, not litigation.

 

Myth: At-will Means Any Reason Goes

At-will employment allows termination without contractual cause. Yet, anti-discrimination laws and retaliation protections still apply. Even a valid reason, like poor performance, becomes risky if the employee recently complained about harassment, requested an accommodation, or reported a safety issue. Terminating soon after a complaint invites legal trouble.

For example, you want to fire Sarah for repeated tardiness. But what if she reported sexual harassment a few weeks earlier? Timing alone can create exposure. So document performance issues as they arise.

Also, check if the employee recently returned from Family and Medical Leave (FMLA) or Paid Family and Medical Leave (PFML). A Springfield auto repair shop faced a claim after firing a worker the day after he returned from PFML to care for his newborn. The company blamed tardiness, but the timing triggered months of legal headaches.

Michael Lewis

Michael Lewis

“At-will employment allows termination without contractual cause. Yet, anti-discrimination laws and retaliation protections still apply. Even a valid reason, like poor performance, becomes risky if the employee recently complained about harassment, requested an accommodation, or reported a safety issue.”

Myth: No Documentation Needed

Some employers assume that no paperwork is necessary under at-will rules. That approach creates unnecessary risk. Without records, even lawful firings appear questionable. Weak evidence damages credibility.

Imagine Tom, a low performer who never received formal feedback. If you fire him after years of positive reviews, expect scrutiny. Always provide timely written warnings and accurate performance evaluations. Keep emails, attendance records, and coaching notes. Would your records persuade a jury that the termination was justified?

 

Myth: We Treated Everyone Fairly

Fair treatment requires consistency. If one employee is fired and another is only warned for the same violation, questions follow.

Consider two salespeople, Mike and Jose, both caught inflating sales numbers. Mike receives a warning. Jose gets fired. If Jose claims racial bias, inconsistent discipline strengthens his argument. Review prior disciplinary decisions. Can you show a clear record of equal treatment?

 

Myth: We Can Share the Reason Widely

Managers sometimes explain a termination too broadly, believing transparency protects the company. In reality, public disclosure creates legal risk.

An employee fired for theft sued his employer after leadership announced it to the entire staff. Even truthful statements, shared excessively or with ill will, can spark defamation claims. A local example: a Chicopee retailer emailed all employees, naming a worker fired for alleged cash shortages. That email became exhibit A in court. Limit disclosure to those who truly need to know.

 

Avoiding Retaliation Claims

Retaliation is the most common Equal Employment Opportunity Commission claim. Firing someone after they complain about discrimination, request leave, or raise pay concerns often leads to lawsuits. Subtle actions can count, too — cutting hours, assigning undesirable shifts, or excluding them from meetings.

Did Lisa report a wage issue last week? If she now gets the worst shifts, her attorney will call it punishment. Train managers to pause and ask: “does this look like payback?” In one Springfield restaurant, a server who complained about tips was fired days later for “attitude.” The Massachusetts Commission Against Discrimination viewed the timing as retaliation, and the case settled quickly.

 

Managing the Termination Meeting Professionally

How you fire someone matters. Keep the meeting short and calm. Speak plainly. Avoid debate. Bring a neutral witness, usually HR. Disable system access and collect company property immediately. For remote workers, coordinate IT to end access during the call.

Have you prepared your team to stay composed when an employee gets angry or upset? A concise, professional exit reduces emotion and litigation risk.

“You can prevent most legal problems with proactive steps. Train managers to document consistently. Encourage employees to raise concerns early, and respond appropriately when they do.”

Reducing Risks Before They Occur

You can prevent most legal problems with proactive steps. Train managers to document consistently. Encourage employees to raise concerns early, and respond appropriately when they do.

Also, follow Massachusetts requirements: final wages and accrued vacation must be paid promptly, sometimes the same day. Missing or delaying a payment can trigger penalties. Review whether your managers apply standards uniformly. Track disciplinary trends by department or supervisor. In one Holyoke warehouse, inconsistent discipline across shifts led to multiple claims that could have been avoided with routine audits.

 

Quick Pre-termination Checklist

• Document the issue in writing.

• Confirm whether the employee recently exercised protected rights (complaint, FMLA, PFML, workers’ compensation).

• Ensure similar cases were handled consistently.

• Complete a fair investigation and allow the employee to respond.

• Prepare final pay and unused vacation in compliance with Massachusetts law.

 

Bottom Line

Employee terminations happen. Legal trouble does not have to. Careful documentation, consistent actions, and thoughtful communication protect your business. Before acting, stop and ask: “have we done this right?”

Taking these steps helps you confidently answer, “can I fire someone for that?” That answer should never rest on guesswork.

 

Michael Lewis is an attorney at the Royal Law Firm who helps employers resolve workplace challenges. He counsels and defends businesses across Massachusetts and Connecticut, handling matters involving discrimination, harassment, retaliation, wage and hour claims, restrictive covenants, and breach of contract. His practice includes litigation in state and federal courts and before administrative agencies.

Understand the Ins and Outs of Automobile Insurance

By Contributor
Law

Collision Course

By Mark Tanner, Esq.

 

We help a great many people who have been involved in automobile collisions, including those who have been injured in automobile collisions through no fault of their own. One of the first questions we ask our clients is, “what insurance coverage do you have?” You would be amazed at how many people don’t know or understand their automobile-insurance coverage.

To better understand your coverage, start with your insurance broker. Ask your broker to provide you with your coverage selections page, a document that outlines the types and amounts of insurance coverage you have.

A number of different types of automobile insurance are available. Comprehensive protects your vehicle from damage caused by events other than a collision, such as vandalism and theft. Collision pays for damage to your vehicle when you collide with another car. The amount of coverage you need for these types of insurance depends largely on the value of your car.

Mark Tanner

Mark Tanner

“If you really think about it, the minimum coverage mandated by Massachusetts is probably insufficient to cover a serious auto accident. It would be smart to speak with your broker about increasing this coverage over the minimum.”

Since we’re talking about collisions, let’s discuss some important types of coverage that often come into play after an automobile accident, are highly variable, and can often be increased or decreased depending on your personal situation.

 

Personal-injury Protection (PIP)

PIP coverage pays up to $8,000 of your medical expenses and lost wages you suffered as the result of a collision and is mandatory in Massachusetts policies. You should know that, to reduce policy premiums, some insurers offer an $8,000 ‘PIP deductible,’ which means you have to pay the first $8,000 of PIP coverage out of pocket. This effectively means you have no PIP coverage, since you must pay the $8,000 deductible, and the coverage limit is $8,000. Think long and hard before you agree to this deductible to decrease the cost of your policy.

 

Bodily Injury to Others (BI)

BI coverage insures you against injuries you cause to others. In Massachusetts, the minimum BI limits are $20,000/$40,000, meaning there is $20,000 in coverage per injured person, up to a maximum of $40,000 if more than one person is hurt in the accident. This coverage pays for medical bills, lost wages, pain and suffering, and the like. If you really think about it, the minimum coverage mandated by Massachusetts is probably insufficient to cover a serious auto accident. It would be smart to speak with your broker about increasing this coverage over the minimum.

 

Damage to Someone Else’s Property

Property damage is coverage that insures you for damage you cause to another person’s property. In Massachusetts, the mandatory coverage is $5,000. Like BI coverage, it is possible to increase the limits of your property-damage coverage. With the ever-increasing cost of cars, and the real possibility that a serious collision might involve more than one car, a house, or who knows what, you should discuss this coverage with your broker to make sure you have adequate coverage.

 

Under/Uninsured Motorist Coverage (UM)

UM coverage often comes into play when we represent people injured in a collision through no fault of their own. UM coverage protects you against injuries, medical bills, lost wages, and the like caused by a driver who is uninsured or underinsured. Like BI, the minimum limits for UM coverage are $20,000/$40,000.

Here’s where it gets tricky. If you and the at-fault driver each have the minimum $20,000/$40,000 coverage, then you effectively have no UM coverage, since the amount of coverage available is determined by subtracting the at-fault driver’s BI coverage from your UM coverage. For example, if the at-fault driver has $20,000/$40,000 BI, and you have $100,000/$300,000 UM, then you have $80,000 per person (or $260,000 per collision if multiple people are injured). You can access your UM coverage once you have received the policy limits of the at-fault driver’s policy.

Given the number of drivers who carry only the mandatory $20,000/$40,000 BI coverage, it would be smart to speak with your broker about increasing this coverage.

 

More Words to the Wise

Make sure your car is garaged at the address shown on your insurance policy. If you have moved, or the car is regularly kept in a different location than is listed on your policy, and you do not tell your insurance company, the insurance company can deny coverage if you are in an accident.

Next, make sure anyone who regularly drives your car is named as an insured on your policy. If you don’t, and they are involved in a collision, your insurer may deny all or a portion of your claims.

Car accidents are never good and always unexpected. Reviewing and adjusting your coverages now can help make sure you are in the best possible position if you are involved in a collision. Your insurance broker can help you determine the types and levels of coverage you need. If you are in a collision, Bacon Wilson can help you navigate this complex process and make sure you receive full and fair compensation for your injuries. If you cause a collision and need help understanding your insurance coverage or need to deal with your insurer, we can help with that as well.

This article is presented for information purposes only, is not legal advice, and does not create an attorney-client relationship. Note that all mandatory coverage limits are increasing effective July 1, 2025.

 

Mark Tanner is a shareholder with the law firm Bacon Wilson, P.C. and chairs the firm’s Litigation department. He is an active member of the Hampden and Hampshire County bar associations as well as a board member for Community Involved in Sustaining Agriculture Inc., People’s Institute, and Franklin County Community Development Corp. He is licensed to practice law in Massachusetts and New York; (413) 781-0560; [email protected]

Massachusetts Pay Transparency Act Poses New Requirements

By Contributor
Law

Good Advice for Employers

By Trevor Brice, Esq.

 

On July 31, 2024, Massachusetts Gov. Maura Healey signed into law “An Act Relative to Salary Range Transparency” in an effort to increase equity and transparency in pay in the Commonwealth. The act puts different requirements on Massachusetts employers depending on the size of their organization.

By signing the act into law, Massachusetts joins 19 other state efforts to bring transparency to job applicants and current employees when it comes to pay in their applied-for and current roles. The states that already have such laws in place include Alaska, California, Colorado, Connecticut, Hawaii, Illinois, Kentucky, Maine, Maryland, Missouri, Montana, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia.

While other states have different requirements regarding pay transparency, Massachusetts has its own set of requirements that must be followed, and employers must be aware of these requirements when posting positions during their hiring seasons.

 

Who Must File EEO-1 Reports

As of Feb. 1, 2025, Massachusetts employers with 100 or more employees who are subject to federal filing requirements must submit their most recent EEO-1 reports that were filed with the Equal Employment Opportunity Commission (EEOC) through the Office of the Secretary of the Commonwealth of Massachusetts. Employers having this requirement must submit the EEO-1 reports through an online portal, which started to accept these reports on Feb. 3 in PDF, JPEG, or PNG format.

Trevor Brice

Trevor Brice

“By signing the act into law, Massachusetts joins 19 other state efforts to bring transparency to job applicants and current employees when it comes to pay in their applied-for and current roles.”

The Commonwealth has provided clarification that information on ‘Component 2’ of the EEO-1 form that has not been collected by the federal government since 2018 is not required to be provided. This information would include W-2 income earnings data by race/ethnicity, sex, and job category. By this clarification, the state is mirroring current EEOC requirements as to the EEO-1. However, this information could be required in the future if the EEOC again requires it to be submitted.

 

Who Must Disclose Wage Ranges for Positions

Starting Oct. 29, 2025, the act requires employers with 25 or more employees to disclose wage ranges in job posts to applicants and to current employees upon request. If a current employee requests a wage range for a position, they are protected under the act from being retaliated against due to this request, and employees have an individual right to sue for retaliation.

The penalties for employers that do not disclose pay ranges (or do not submit EEO-1 reports as required above), are a warning for the first offense, a fine of not more than $500 for the second offense, and a fine of not more than $1,000 for the third offense; a fourth and any subsequent offense can be subject to civil citations. Within the first two years (until Oct. 29, 2027), employers are granted a two-business-day grace period to cure a violation before a fine is imposed.

The wage range that must be disclosed for employers meeting the above requirements is the annual salary range or hourly wage range that the employer reasonably and in good faith expects to pay for the position at the time of the job posting. This wage range does not include an obligation to provide a range as to other forms of compensation than base salary or hourly wages, such as bonuses, commissions, deferred compensation, stock options, or other forms of equity or benefits.

A ‘posting’ is any advertisement or job posting intended to recruit job applicants for a particular or specific employment position, whether directly or indirectly through a third party, such as a recruiter. Employers must provide the same information to an internal employee who is offered a promotion or transferred to a new position with different job responsibilities.

 

Takeaways

The act, while applying only to larger employers, does impose strict penalties for non-compliance and an individual right to sue for employees who feel they have been retaliated against for inquiring into a wage range. To get ahead of the disclosure requirement of the act, employers should be pulling together ranges for salary and hourly pay of all positions.

The act does provide a safe harbor for employers that have undertaken a reasonable analysis of the wages connected with a position in the last three years and either remedied the issues or didn’t identify any issues. As with any analysis, however, an employer’s analysis of pay can become public record, so employers should undertake this effort under the direction of counsel to help maintain privilege and prevent the analysis from being discoverable by the state, federal government, or private litigants.

Employers should also make active efforts to educate their management as to the retaliation provision of the act in order to avoid potential litigation.

 

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.

Handling Workplace Investigations in the Right Way Matters

By Contributor
Law Special Coverage

Cooling the Drama

By Tanzi Cannon-Eckerle, Esq.

We all know about workplace investigations, right? At least from TV. Much TV these days is some form of investigation-related drama — Law & Order, Suits, Jack Reacher, and, for you history drama fans, The Law According to Lidia Poët.

And from real life as well, as nearly every organization conducts (or should conduct) investigations from time to time. Heck, technically, trying to find your missing red stapler is a workplace investigation. “Where did I last see it? Where is it supposed to be? Who used it last? Ah — there it is!” Investigation concluded.

Of course, most investigations are not quite that simple. But no matter how serious or trivial the allegation, the approach should be consistent. The scope may change — but the method should not.

 

What Is a Workplace Investigation?

Merriam-Webster defines “investigate” as “to study by close examination and systemic inquiry.” An effective investigation allows a company to identify and analyze workplace issues in an organized way, leading to meaningful, rule-compliant solutions.

In practice, a workplace investigation is a tool — carried out through trained investigators and appropriate policies — that helps an organization stay compliant with laws and industry regulations, maintain a safe and productive workplace, support a healthy company culture, boost employee morale and decrease employee turnover, troubleshoot efficiency and/or productivity issues, maintain a positive company brand, and, importantly, save money.

 

Is an Investigation Really Necessary?

As a labor and employment attorney, I often hear, “do I really need to do an investigation?” Usually, this question arises when the allegation seems minor, the employee has a history of complaints, it is a repeat issue (or the company thinks the issue has been addressed and is moot), the employee is about to quit, or all of the above.

The answer? Yes. Every time.

If there is an incident report, a complaint, or even a hallway conversation that raises concern, it should be addressed. Investigations are necessary for allegations involving harassment, discrimination, or retaliation; misconduct (such as theft or fraud); policy violations or safety concerns; whistleblower complaints; performance issues; and production mishaps.

Once an employer is on notice of a potential issue, the obligation to investigate kicks in — regardless of whether the employee stays or leaves. The company has a duty to maintain a safe, lawful, and equitable workplace.

Tanzi Cannon-Eckerle

Tanzi Cannon-Eckerle

“Beyond litigation risk, investigations signal to employees that the company takes concerns seriously, the workplace is safe and fair, and inappropriate behavior has consequences.”

The Risk of Inaction or Poorly Executed Action

Well, aside from avoiding lawsuits (kidding … but not really), a timely, impartial investigation can help resolve internal issues, prevent escalation, and demonstrate a commitment to a respectful workplace.

According to the Equal Employment Opportunity Commission (EEOC), workplace investigations are a crucial tool in addressing and preventing claims of harassment, discrimination, and retaliation. In 2024, the EEOC received more than 88,500 claims, while the Massachusetts Commission Against Discrimination (MCAD) received more than 3,500 claims (with approximately 70% of them moving beyond administrative dismissal in one form or another).

A well-executed investigation can provide a solid defense in legal matters — and even help companies avoid them altogether. Side note: 22% of the MCAD claims are retaliation claims, and 21% are disability-related. These types of issues are more preventable than most, but we can talk about that next time; there is no room in this article for me to stand on my soapbox to discuss those issues.

But beyond litigation risk, investigations signal to employees that the company takes concerns seriously, the workplace is safe and fair, and inappropriate behavior has consequences. All of this contributes to employee engagement — and engaged employees are productive employees. Conversely, failure to act can lead to chaos, disengagement, and liability.

The average cost of a workplace harassment lawsuit? About $75,000 to get to pre-trial settlement, while pre-trial to trial defense costs average $125,000 to $250,000. That does not even include a potential jury award for the plaintiff, reputational damage (64% of consumers have stopped purchasing a brand after hearing news of a company’s poor employee treatment), or regulatory scrutiny. A poorly handled (or non-existent) investigation can make matters worse, opening the company, and sometimes individual managers or executives, to further legal exposure.

So, yes, it is necessary to conduct timely investigations using skilled investigators that utilize a productive investigation process that can later be defended.

 

Who Should Conduct the Investigation?

Good question. The wrong investigator can create a problem all by themselves. Is the person too close to the issue? Do they have a conflict of interest? Have they been trained?

I have recently had several conversations (be still my investigator-geek heart) about who should investigate and whether hiring an outside consultant is always necessary. Some argue, “if I can run the company, I can run an investigation.” Technically? Probably.

But should the owner or a C-suite executive do it? Absolutely not. That is a recipe for accusations of bias, and also, don’t they have better things to do — like, I don’t know, running the company? Others say every investigation should be outsourced. That is a bit extreme, too. You wouldn’t hire a consultant to find your red stapler.

“Though external investigators may be more costly, the cost is likely less than a poorly handled investigation, and external experts likely have no motive for bias.”

The right answer is the classic lawyer fallback: it depends. On the issue. On the people involved. On the scope. Investigating is a learned skill. If your team is trained, and you have a solid policy and process, many internal investigations can be managed in-house.

For higher-risk matters, or for investigations that are broad in scope, bringing in an external, independent expert is often the better move. Though external investigators may be more costly, the cost is likely less than a poorly handled investigation, and external experts likely have no motive for bias. And because of their expertise, which includes being skilled interviewers, they often investigate efficiently, create less workplace disruption, and make better witnesses if a lawsuit were to be filed.

In the words of Reacher, “you do not mess with the special [external] investigators!”

 

What Should a Typical Investigation Involve?

Not all investigations are the same, but there should be a consistent procedure. Depending on the type of issue being investigated and the scope, some procedural steps may not be necessary, but it is best to leave that to the investigator to determine.

Generally, the company should receive and respond to the complaint or allegation; this is usually someone in human resources. At this point, the ‘timeliness’ clock starts ticking, which is important to a defense of a claim.

The initial response to the complaint should briefly state that the concern has been received, and next steps are being taken, ensuring confidentiality (to the extent practicable). Next, the company should take immediate interim action to prevent further harm, if applicable (such as separate employees, administrative leave, or temporary accommodations). It is also a best practice to remind stakeholders about the rules governing retaliation.

Then the company chooses an investigator. Once this is done, the investigator should do a preliminary review of the allegations, do initial fact gathering, and determine the scope of the investigation. At this stage, the investigator should decide whether it is necessary to use an external expert.

Next, the investigator should develop an investigation plan, outlining the objectives, scope, and timeline of the investigation. The investigator then collects evidence, such as gathering relevant documents, records, and witness statements, reasonably ensuring confidentiality and maintaining a chain of custody.

Next, impartial, thorough witness interviews should be conducted using active listening skills and open-ended questions. Then the investigator should analyze the evidence, identifying patterns, inconsistencies, and credibility issues, and draw conclusions based on the findings. Then the investigator must compile a comprehensive report detailing the findings, conclusions, and recommendations for corrective action or remedial measures.

Lastly, the investigator should counsel the company on implementing the recommended actions, and the company should ensure accountability and provide employee support. If a lawyer is used as an external investigator, the lawyer may counsel the company about legal risks and make recommendations.

Best practices include using trained, impartial investigators; avoiding conflicts of interest; maintaining confidentiality and proper documentation; being thorough and prompt; and keeping accurate records and reports that can stand up to scrutiny.

One of the most overlooked areas? Record keeping. Even the best investigation won’t help in court (or with regulators) if there is not adequate documentation. Investigators must maintain accurate and detailed records of the investigation, including notes, documents, and evidence, and must know how to draft accurate investigation reports in a manner that will withstand opposing counsel, agency, or judicial scrutiny.

 

Final Thoughts

Workplace investigations aren’t just for TV dramas; they are essential risk-management tools for every organization. When done right, they protect your business, your people, and your reputation. And if you happen to find your red stapler along the way? Even better.

 

Tanzi Cannon-Eckerle is the principal attorney at General Counsel by Cannon, PLLC, a fractional general-counsel law firm that focuses on labor, employment, and business law. She is also a certified workplace investigator and equity and inclusion officer. For more information about workplace investigations or to seek legal assistance for business matters or labor and employment concerns, schedule a free, 30-minute consultation by emailing [email protected], or visit gcbycannon.com and fill out the contact form.

A New Posting Requirement for Massachusetts Employers

By Contributor
Law

Salary Transparency

By Michael McAndrew, Esq.

 

In an effort to increase transparency and equity in wage payment, the Massachusetts Legislature passed, and Gov. Maura Healey signed into law on July 31, H. 4890, “An Act Relative to Salary Range Transparency.”

The act is an extension of employee protections provided in the 2018 Massachusetts Equal Pay Act, a statute that made it unlawful for employers to discriminate on the basis of gender in the payment of wages and to prohibit employers from preventing, discouraging, or reprimanding employees who share wage information. Under the new act, covered employers no longer can keep secret from their employees and prospective employees pay information for positions within their company. The act has wide-ranging reporting and disclosure requirements of salary ranges.

The act’s provisions are twofold. First, it requires that employers disclose pay-range information to current and prospective employees. The act applies to ‘covered employers,’ which are defined as “any employer, public or private, that employs 25 or more employees within the Commonwealth.”

Michael McAndrew

Michael McAndrew

“Under the new act, covered employers no longer can keep secret from their employees and prospective employees pay information for positions within their company. The act has wide-ranging reporting and disclosure requirements of salary ranges.”

Under the act, an employer must disclose the pay range for positions listed in job postings, disclose the pay range for positions offered to current employees as promotions or transfers, and disclose pay-range information to current employees upon request. The act prohibits employers from discharging or retaliating against employees for exercising their rights under the act.

Employers will be required to start complying with these provisions on Oct. 29, 2025. The attorney general is required to conduct, within six months of the act’s passage, a public-awareness campaign regarding the requirements of the act.

Second, the act sets forth a system whereby employers are required to submit annual wage-data reports to the state secretary. The exact type and timing of the report that must be filed with the secretary depends on the size and type of the employer.

For private employers that employ 100 or more employees in the Commonwealth at any time during the prior calendar year that are subject to federal filing requirements of EEO-1 data reports, the employers must submit a copy of the EEO-1 data report to the secretary annually by Feb. 1. Massachusetts employers that are required to file EEO-1 data reports will be required to make their first report under the act by Feb. 1, 2025. Other types of employers, such as public employers, face different filing deadlines and requirements under the act.

 

Next Steps

After employers submit copies of their EEO data reports, the secretary has until April 1 to report this information to the Executive Office of Labor and Workforce Development. The Executive Office is then required to aggregate the information it receives from the secretary and post it on its website. It is important to know that, while aggregated salary information regarding certain professions will be available on the Executive Office’s website, individual employers’ EEO data reports will not be published. In fact, the act expressly provides that these records are not to be considered ‘public records.’

While this is administratively tedious, employers in Massachusetts must ensure that they comply with both the disclosure and reporting requirements of the act, or they will face heavy administrative fines. The attorney general has exclusive jurisdiction to enforce the wage-disclosure and annual reporting provisions in the act and can impose fines for an employer’s violation of the act and may obtain injunctive or declaratory relief for this purpose.

For a first offense, the employer will be given a warning. For a second offense, the attorney general can impose a fine of up to $500, and for third offenses, fines can be up to $1,000. For fourth and subsequent offenses, penalties are issued pursuant to Massachusetts General Laws chapter 149, section 29C, a violation of which can result in fines between $7,500 and $25,000.

For the first two years that the act is in effect, prior to levying fines for violation of the act, the attorney general is required to provide notice of the violation and give the subject employer two business days to cure the violation. For purposes of the attorney general’s enforcement of job postings, if multiple job postings are made after an initial job posting that violates the act, all posts for the same position that violate the act that are posted within 48 hours of the initial post will be considered a single violation.

Unlike the Massachusetts Equal Pay Act, “An Act Relative to Salary Range Transparency” does not provide for an employee’s private right of action for their unlawful discharge or retaliation by their employer for exercising their rights under the act. An employee may be able to assert such a claim under other discrimination laws or other causes of action. Further guidance on this and many other questions raised by the new law may be given once the provisions of the act become fully effective.

 

Michael McAndrew is an attorney in the Litigation and Employment Law practices at Bulkley Richardson.

Life Insurance, Stock Redemption, and Your Business

By Contributor
Law

A New Wrinkle from the Supreme Court

By Benjamin M. Coyle, Esq. and Isabelle Fergus

 

A recent Supreme Court case ruling may have you making some important changes to life-insurance policies owned by your company. In early June, the Supreme Court unanimously ruled that proceeds from life-insurance policies used to buy out a deceased owner’s shares of a business are not offset by redemption obligations, which effectively results in the value of the company being increased.

In Connelly v. United States, the Supreme Court affirmed the lower court’s ruling that the obligation of the company to redeem shares at fair market value does not offset the value of life-insurance proceeds and that life-insurance proceeds must be included in the company’s valuation. The decedent’s estate argued that this decision made by the court will make succession planning increasingly difficult for closely held corporations, and he is right.

Benjamin Coyle

Benjamin Coyle

“The question here is whether Crown’s contractual obligation to redeem Michael’s shares at fair market value offsets the value of life-insurance proceeds committed to funding the redemption. The answer is no.”

In summary, Thomas Connelly, as executor of the estate of Michael P. Connelly Sr., sued the U.S. for a refund of the estate taxes assessed against Michael Connelly’s estate. Michael and Thomas Connelly owned a building-supply corporation known as Crown C Supply (“Crown”). Michael owned a 77.18% stake in the company, while Thomas owned the rest. The brothers had a buy-sell agreement that required the company to be valued as of the date of death of a shareholder.

Crown purchased a $3.5 million life-insurance policy on each brother’s life. The life insurance was to be used by Crown to buy the deceased brother’s shares if the other brother did not want to buy the shares personally. Thomas determined that he did not want to buy Michael’s shares, and therefore Crown was obligated to do so. This is where the valuation of Crown comes into play.

Thomas argues that Crown was worth $3.86 million before the redemption, and Michael’s shares were worth $3 million. He also claims that Crown was worth $3.86 million after Michael’s shares were redeemed. In the court’s eyes, both of Thomas’s claims cannot be true.

In granting summary judgment to the IRS, the lower court reasoned that it found that the stock-purchase agreement did not affect the valuation and, furthermore, that a proper valuation of Crown must include the life-insurance proceeds that were used toward redemption because it is seen as significant asset of the company, making Crown not worth $3.86 million, but $6.86 million.

The question here is whether Crown’s contractual obligation to redeem Michael’s shares at fair market value offsets the value of life-insurance proceeds committed to funding the redemption. The answer is no. The Supreme Court affirms that Crown’s contractual obligation to redeem Michael’s shares did not diminish the value of those shares because redemption obligations are not seen as liabilities that reduce a corporation’s value for federal estate tax.

 

Impact of the Ruling

So, how does this recent decision affect companies that have existing stock-redemption agreements? It means that the business must review their existing agreements and the manner in which the company and shareholders are obligated pursuant to its terms.

It is essential to review these agreements with your advisors, including your accountant and attorney. There are various options that may be utilized, each of which have significant consequences, and should not be done without consultation with your advisors, as the decisions will have an impact on the business and estate planning.

When looking into life-insurance policies, you may want to consider a cross-purchase agreement where the shareholders will purchase life insurance on each other. In doing so, this ensures insurance proceeds will go right to purchasing the deceased shares without the estate’s tax values rising. Although this was the better option for Thomas and Michael’s situation, this type of agreement requires each shareholder to pay premiums for the insurance policy, creating a risk that one may not be able to pay it. While this type of arrangement may be beneficial in some respects, it may have negative consequences as well.

Another key step is to regularly get valuations to see potential tax impacts and to see current market values and tax regulations. Consulting tax and legal experts on this matter will help to ensure that your corporate agreements align with all current laws and regulations. Along with talking to legal experts, you should also expect to plan for future tax obligations, whether that means setting aside funds and/or developing financial strategies to cover potential tax liabilities that could potentially rise from share redemptions or corporate obligations.

By taking steps to review agreements and evaluate life-insurance policies by consulting with experts, business owners can manage their estates better and minimize tax liabilities, all while establishing effortless ownership transitions within their business.

 

Ben Coyle is a shareholder with Bacon Wilson who focuses much of his practice in the areas of municipal law and litigation, while also handling probate and business matters. Isabelle Fergus is an intern at Bacon Wilson who is attending the Isenberg School of Management at UMass Amherst.

Prepare for the Rise of AI in the Workplace

By Contributor
Law Special Coverage

Attention, Employers

By Sabba Salebaigi-Tse, Esq.

Artificial Intelligence (AI) is rapidly changing how we live and work. To keep up with this technological revolution, both federal and state governments are introducing new rules to ensure AI is used responsibly in the workplace. Here’s an overview of what you need to know about recent federal, state, and local AI developments.

 

The White House’s Executive Order

In October 2023, President Biden issued a groundbreaking executive order on the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” This order pushed federal agencies to create guidelines ensuring AI is used responsibly, especially at work. The goal is to make sure AI helps improve workplaces without causing unfair treatment or discrimination.

Sabba Salebaigi-Tse

Sabba Salebaigi-Tse

“Ensure transparency by clearly communicating to employees and applicants about the use of AI in employment decisions and their rights related to AI.”

Department of Labor’s New Guidelines

Wage and Hour Division’s Bulletin: On April 29, the Department of Labor (DOL) Wage and Hour Division released a bulletin explaining the risks of using AI at work. This bulletin emphasizes the inherent risks associated with AI use and underscores that AI should not replace human oversight. According to the guidelines outlined in FAB, employers must ensure that responsible human oversight accompanies the deployment of AI technologies.

Given the various challenges associated with AI technologies, it is crucial for employers to navigate the complexities while adhering to laws like the Fair Labor Standards Act (FLSA) and others, which stipulate that employers remain accountable for legal issues arising from the use of AI. Even if AI systems autonomously take adverse actions against employees, such actions could potentially constitute retaliation under FLSA and related statutes.

 

Guidance of Federal Contractors: On April 29, the DOL Office of Federal Contract Compliance Programs issued guidelines aimed at federal contractors utilizing AI, which are valuable for all employers to consider.

These guidelines emphasize several critical practices for the ethical and effective deployment of AI tools in the workplace. Employers are advised to ensure that AI technologies are not only fair and job-related, but also regularly monitored for biases that could inadvertently impact decision-making processes. Additionally, keeping employees well-informed about the use and implications of AI systems fosters transparency and helps mitigate potential concerns or misunderstandings.

“As AI continues to evolve and integrate into the workplace, new and expanded laws will emerge to govern its use. Employers must proactively adapt to these changes to harness AI’s benefits while ensuring compliance with legal standards.”

These proactive measures not only enhance compliance with federal regulations, but also promote a more inclusive and equitable work environment where AI technologies are used responsibly to benefit both employers and employees alike.

AI Principles for Employers: On May 16, the DOL introduced a comprehensive set of principles aimed at guiding the development and implementation of AI technologies in the workplace. These principles underscore the importance of ethical considerations and employee welfare in AI deployment. They stress the need to keep workers informed about how AI is utilized, ensure transparency in AI decision-making processes, and safeguard worker data throughout the entire AI life cycle.

These guidelines aim to foster a fair and secure work environment where AI enhances operations while upholding privacy and ethical standards. Adhering to these principles helps employers build trust, mitigate risks, and integrate AI technologies responsibly for the benefit of all stakeholders.

 

State-level Developments

New York: Since July 5, 2023, New York city has a law regulating automated employment decision tools (AEDTs). Employers must conduct annual audits to check for bias, publish the results, and let applicants know when AEDTs are used. In addition, a new bill introduced this past February aims to regulate AEDTs across New York State. This bill requires annual bias analyses and public summaries of the findings.

New Jersey: In February, two bills were introduced in New Jersey to manage AI in hiring. One bill requires annual bias audits for AEDTs. The other regulates AI-enabled video interviews, demanding transparency and consent from applications.

Other States: California is working on regulations to prevent algorithmic discrimination and ensure AI tools are used transparently and responsibly. Starting Feb. 1, 2026, Colorado will require AI developers and users to protect against discrimination with high-risk AI systems. And both Illinois and Maryland have laws in place requiring employers to notify and get consent from applicants before using AI in hiring.

 

What Should Employers Do?

To navigate these new regulations and ensure compliance, employers should:

• Stay informed. Regularly review federal and state guidelines on AI use in the workplace.

• Conduct regular audits of AI tools to detect and mitigate bias or inequitable outcomes.

• Ensure transparency by clearly communicating to employees and applicants about the use of AI in employment decisions and their rights related to AI.

• Provide training to HR and management teams on the ethical and responsible use of AI tools.

• Consult with legal experts to say ahead of regulatory changes and implement best practices tailored to your organization.

 

Conclusion

As AI continues to evolve and integrate into the workplace, new and expanded laws will emerge to govern its use. Employers must proactively adapt to these changes to harness AI’s benefits while ensuring compliance with legal standards. If you have questions about any of these developments, it is prudent to consult with labor and employment counsel.

 

Sabba Salebaigi-Tse 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.

Non-compete Agreements May Be in Jeopardy

By Contributor
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.

EEOC Takes Action Against Associational Discrimination

By Contributor
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 Marketing, Now Essential, Continues to Evolve

By
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.

When Are Alcoholism, Drug Addiction Considered Disabilities?

By Contributor
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.

Representatives Must Navigate the Many Ways to Probate an Estate

By Contributor
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.

Decision Restricts on Non-Disparagement, Confidentiality Clauses

By Contributor
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.

Suit Shows That Employers Must Engage in Interactive Dialogue

By Contributor
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.

EEOC Releases New Guidance on Hearing Disabilities

By Contributor
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.

Changes to Employment

By Contributor
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.

A Smart Move? You Bet

By
Opinion

Editorial

 

It took a few years longer than it should have, but sports gambling finally seems to be a reality in the Bay State.

The Massachusetts Legislature recently approved a sports-betting bill, and Gov. Charlie Baker has signed it into law. If all goes well — something that doesn’t happen often in this state — systems should be in place for sports betting for later this year and certainly by the time the Super Bowl rolls around next February.

This news is cause for celebration in the state’s three casinos, which have been pushing hard for such a measure, and for good reason. Gaming revenues have certainly not been what they were projected to be nearly four years after MGM Springfield opened its doors to great pomp and circumstance. And the lack of sports betting has given gamblers one more reason to cross the border and go to facilities in New Hampshire, Rhode Island, Connecticut, and New York. Sports betting seemed to always make sense as a way to help these casinos improve traffic, bring more revenue to the state, and add some jobs. But that didn’t stop the Legislature from doing what it does all too often: sit on its hands.

Indeed, state lawmakers tend to overthink these things, if that’s even the right term, and this leads to indecision. It happened with gaming for several years, and it happened with sports betting as well.

After four years of “painstaking work and research,” as state Sen. Eric Lesser called it, the Legislature was able to come to an agreement on a bill providing for both retail and mobile sports wagering, one that will allow betting on college sports, with some restrictions, and also comes with a number of consumer protections. These include a provision whereby, for online and mobile betting, bets cannot be linked to credit cards — a measure implemented to make sure consumers are wagering with funds on hand and not borrowing.

Projections of revenues vary, but the measure is expected to bring in more than $35 million annually. That’s not a huge number, but right now, it’s money that’s going elsewhere, and that the state could put to good use in areas ranging from workforce development to public health.

The state is once again late to the party. But late is better than never — or even later. v

 

Skoler, Abbott & Presser to Stage Labor and Employment Law Briefing

By
Daily News

SPRINGFIELD — Skoler, Abbott & Presser, P.C., a labor and employment law firm serving employers in the greater Springfield and Worcester areas, will stage a breakfast briefing on June 29 from 8:30 to 10 a.m. at the Sheraton Springfield Monarch Place Hotel, One Monarch Place, Springfield.

Attorneys John Gannon and Meaghan Murphy will discuss important decisions from the Mass. Supreme Judicial Court involving payment of wages and a new type of employment claim related to personnel files. They will also talk about several significant labor and employment law cases including:

  • Cases that address mandatory vaccination and other COVID-related issues;
  • Amazon and Starbucks unionization cases; and
  • A few (not-so) fun cases that involve strange and unusual discrimination claims

 

“Due to the pandemic, it’s been two years since we last held one of our live breakfast briefings,” said Gannon, a partner at Skoler Abbott. “We are happy to be able to return to our regular format for this popular event designed to help business owners, managers and human resources professionals stay up-to-date with employment and labor law mandates.”

The cost for the briefing is $35 per person, which includes a continental breakfast and parking. For more information or to register, email [email protected] with the attendee’s name and company, or register online at bit.ly/SAPJuneBreakfastBriefing.

It’s Important to Understand the Rules of this Intriguing Road

By Contributor
Accounting and Tax Planning

Cryptocurrency Taxation

By Jonathan Cohen-Gorczyca, CPA, MSA and Tyler Pickunka

 

Jonathan Cohen-Gorczyca

Jonathan Cohen-Gorczyca

Tyler Pickunka

Tyler Pickunka

Cryptocurrency has become ever more popular over the past few years, so much so that there are athletes being paid in it, sports arenas are changing names to cryptocurrency exchanges and platforms, and even commercials are being aired during the big football game; it has transcended into everyday culture.

Now, cryptocurrency is more accessible than ever, and with so many new phone and computer applications, anyone can buy and sell the digital currency at any time. As it has become more popular, government and regulatory agencies have taken notice and are dedicating more time and funds to changing laws, issuing notices for non-reporting and tax avoidance, and closing the gap in treating it like any other tradable security.

What follows are some basic, but frequently asked, questions to assist you with your cryptocurrency, tax filings, and common treatment for taxation.

 

How do I obtain cryptocurrency?

Cryptocurrency can be purchased on numerous online platforms whether on your computer or phone. Some of these platforms are strictly cryptocurrency only, while others also allow the trading of publicly traded securities. Certain traditional investment companies have created funds to allow you to purchase, hold, and sell shares of cryptocurrency with your regular investments. This can remove some of the perceived risk of buying and selling on the online platforms.

 

How is cryptocurrency taxed?

Cryptocurrency is taxable when a taxpayer sells virtual currency for U.S. dollars, exchanges one type of virtual currency for another, receives virtual currency for services, and mines virtual currency. While trading, exchanging, receiving, or giving virtual currency for services are considered capital gains or losses for tax purposes, mining virtual currency is considered ordinary income.

Mining virtual currency is the actual process where new cryptocurrency is created and enters into markets.

 

Can I gift cryptocurrency?

Yes, but cryptocurrency is not exempt from gift-tax filing requirements if you want to transfer holdings to someone else. The fair market value at the time of the gift, and not the basis, is the value used for gift tax purposes. Your existing basis of the Cryptocurrency transfers to the giftee; this treatment is like stocks. The holding period is transferred as well when determining short- or long-term capital gains if the giftee is to sell or transfer the gift.

 

When do you check the box on the tax return?

In recent years, the Internal Revenue Service (IRS) has added a question to page 1 of the Form 1040 regarding cryptocurrency to better regulate the taxation of cryptocurrency and hold taxpayers accountable for reporting their taxable transactions. The box on the tax return should be checked for all taxpayers who received, sold, exchanged, or disposed of any financial interest in any virtual currency. If you buy and are holding onto virtual currency and have not done any of the above, you do not need to check this box. If you select “No” and are involved in the active buying and selling of cryptocurrency, this could be considered perjury on an official government form.

 

Do you have recommendations that make tax reporting easier?

Dissimilar to publicly traded securities, most cryptocurrency platforms do not issue a Consolidated 1099 statement tracking gains or losses. A taxpayer will most likely receive a 1099 MISC or 1099-K. These two tax forms do not provide enough information to make determinations such as if the cryptocurrency was held short-term or long-term, but rather just an aggregate of all activity. One option is to find an online platform that provides this report at year-end.

Another option is to use a third-party software where you can consolidate your trading activities and can generate a report at year-end to hand to your accountant. If you are just provided with multiple ledgers, it is very difficult (almost impossible) to decipher your activity throughout the year.

Understanding the tax implications for cryptocurrency is a must if you have or plan to have it. Contact your accountant for additional information about cryptocurrency and what that may mean for your specific tax situation.

 

Jonathan Cohen-Gorczyca, CPA, tax manager, has been with Melanson for 10 years andspecializes in individual and business tax returns, compilations, and review engagements; Tyler Pickunka is a recent graduate from Westfield State University who has been a part of the Melanson tax team since 2020.

Recent Case Displays Threats Facing Those in the Cannabis Industry

By Contributor
Law

Risky Business

By Michael Roundy and Scott Foster

 

Michael Roundy

Scott Foster

Scott Foster

Running a business in the legalized cannabis space is something in which hundreds of owners around the Commonwealth are now engaged. On most days, the fact that cannabis remains illegal federally is not on the top of the minds of these owners. However, a recent decision by the First Circuit Court of Appeals reminds us that the cannabis industry is not entirely free of the risks of federal prosecution and provides useful guidance on how best to avoid those risks.

Maine legalized medical marijuana in 2009, subject to stringent conditions and governed by detailed regulations. While state law permitted the medical use of marijuana, the federal Controlled Substances Act does not. However, each year since 2015, Congress has attached a rider to its annual appropriations bill that prohibits the Department of Justice from using appropriated federal funds to prevent any of the states “from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.”

In United States v. Bilodeau and two related cases, the two individual defendants and the companies they owned operated sites in Auburn, Maine, where they grew marijuana purportedly for use as medical marijuana. The operations were carried out under the color of facially valid paperwork as a Maine Medical Marijuana operation, and state inspectors found the site to be in compliance with Maine’s law.

Following an investigation by federal law enforcement, the defendants were indicted for knowing and intentional violation of the Controlled Substances Act. The government asserts that the illegal marijuana-distribution operation merely used the Maine Medical Marijuana program as a cover for its illegal, black-market marijuana operations, which included distribution of marijuana to individuals in several other states who were not qualifying medical-marijuana patients under Maine’s law.

“On most days, the fact that cannabis remains illegal federally is not on the top of the minds of these owners. However, a recent decision by the First Circuit Court of Appeals reminds us that the cannabis industry is not entirely free of the risks of federal prosecution and provides useful guidance on how best to avoid those risks.”

The defendants challenged the prosecution on the grounds that the government was prohibited from using federal funds to prosecute them, because of Congress’s appropriations rider, and sought an injunction from the District Court. The court denied the request because the Maine medical-marijuana law did not authorize the sort of conduct alleged. The defendants appealed.

The Court of Appeals considered the arguments raised by both parties. The government advocated for a view of the appropriations rider that would permit any prosecutions unless the defendants were in full, strict compliance with the state’s medical-marijuana laws. Any minor non-compliance would bring the case outside the rider and permit the Department of Justice to prosecute.

The court rejected this approach, finding that federal prosecution would hang as a sword of Damocles over participants in Maine’s medical-marijuana market, ready to drop at the occurrence of any minor, “even tiny” non-compliance or unintentional violations, and would likely deter market participation, which might also lead the state to water down its regulatory scheme and otherwise serve to thwart the state’s implementation of its laws relating to medical marijuana.

The defendants argued that the rider should prevent prosecutions of those who have valid state licenses to participate in the state’s medical-marijuana industry. The court rejected this other extreme as well, concluding that Congress did not intend the rider to create a safe harbor for blatantly illegitimate activity outside the scope of the state’s own medical-marijuana laws, merely because the defendants possess facially valid documents.

The court thus rejected the approach advocated by both the government and the defendants. The court adopted a middle-ground approach and declined to define its precise boundaries. It found that the conduct in the case at hand was clearly aimed at supplying marijuana to persons “whom no defendant ever thought were qualifying patients under Maine law” and that the medical-marijuana licenses were façades for such unauthorized sales.

The court also noted that Maine’s own medical-marijuana law expressly criminalized distribution to those not authorized to possess marijuana (medical patients) under the law. As such, federal prosecution for such conduct was considered unlikely to have any unwelcome effect on Maine’s implementation of its medical-marijuana laws. The Appeals Court therefore affirmed the District Court’s denial of an injunction, and the prosecution is permitted to proceed.

What this decision does not do is provide sufficient clarity for Massachusetts operators or regulators, especially around the question of what degree of non-compliance with the Massachusetts regulatory scheme may expose Massachusetts operators to federal prosecution.

While it seems unlikely that mere technical violations would lead to federal prosecution, could an operator faced with a summary suspension order (which occurs when there is “an immediate threat to public health, safety, and welfare”) find that not only is their license suspended, but they now face federal prosecution as well? Hopefully the Cannabis Control Commission will take this potentially serious threat into consideration as they weigh future enforcement actions in Massachusetts.

 

Michael Roundy and Scott Foster are both partners at Bulkley Richardson and members of the firm’s cannabis practice.

Here’s What Businesses Need to Know About Vaccination Mandates

By Contributor
Law Special Coverage

President Biden’s COVID-19 Action Plan

President Biden has issued a comprehensive plan that orders employers with 100 or more employees to mandate vaccination for their workers and requires other groups of employers to do the same. The clock is ticking on these orders, and there are many unanswered questions as well as lawsuits filed. Here’s what business owners and managers need to know.

By Marylou Fabbo, Esq. and John S. Gannon, Esq.

 

Last month, President Biden issued a bold new action plan aimed at attacking COVID-19 and fighting the dangerous Delta variant. The plan orders employers with 100 or more employees to mandate that their workers get vaccinated. Similarly, the president’s plan requires the following groups of employees to be vaccinated: those working on federal government contracts (or subcontracts), healthcare workers, and federal government workers.

Not surprisingly, many businesses and politicians are unhappy with these mandates, and one state has already filed a lawsuit against the Biden administration challenging the plan and asking the court to declare it unconstitutional. Here are some takeaways for businesses as they prepare for the novel vaccine mandate.

 

Biden Administration Mandates Vaccinations

On Sept. 9, the president announced steps that his administration is taking to boost the economy by reducing the spread of COVID-19. One step is called “Path Out of the Pandemic: President Biden’s COVID-19 Action Plan” (more information can be found at www.whitehouse.gov/covidplan).

Marylou Fabbo

Marylou Fabbo

John S. Gannon

John S. Gannon

The action plan directs the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) to issue an emergency temporary standard (ETS) that requires all employers with 100 or more employees to ensure their workers are either fully vaccinated or get tested weekly for COVID-19. Employers will also be required to provide paid time off to employees to get vaccinated and recover from any side effects from the vaccine.

The Biden administration estimates this will impact more than 80 million workers in private-sector businesses. Employers that fail to comply with the ETS will face enforcement actions from OSHA, which may include fines up to $13,653 per violation. So, if a workforce with 100 or more employees has 10 unvaccinated workers who are not testing weekly for COVID-19, the business could be looking at a fine of well over $100,000. This is no slap on the wrist.

Additionally, the president signed two executive orders requiring federal employees and federal contractors (and subcontractors) to get vaccinated, regardless of employee size. There is no weekly testing exception for these employees. Employees working on or in connection with a federal contract, including subcontractors, must be fully vaccinated by Dec. 8.

Employees who cannot get vaccinated due to a sincerely held religious belief or disability may be entitled to an accommodation from these requirements. However, it is up to the employer to determine whether medical and/or religious exceptions are legally permissible.

Unfortunately, there are a lot of unanswered questions out there. For instance, who will pay for the testing and vaccinations — the employer or the employee? And if an employee decides to opt for the weekly testing option, is the time spent traveling to and from the vaccination site considered hours worked for payroll purposes? What about the time taking the test? Under Massachusetts law, there appears to be an argument that this is, indeed, time worked for wage-and-hour purposes. Also, will employers who pay for testing be eligible for some sort of tax break if this needs to be paid time? Stay tuned, as we expect more guidance on these topics.

 

When Can Employers Expect the OSHA Standard to Be Issued?

Right now, this is anyone’s best guess. It has been about a month since President Biden announced his action plan. Assuming OSHA has been working on the ETS for a few weeks now, we anticipate it will be released sometime next month, and almost certainly before the end of 2021. Once the ETS is released, employers will likely have a short window (maybe 30 or 45 days) to get into compliance.

 

What Should Employers Do Now?

Business with employees working on federal contracts or subcontracts need to act right away if they have not started taking steps to ensure compliance. The Dec. 8 deadline for federal contractors is not that far away, and anyone who takes a vaccine that requires two shots (i.e., a Pfizer-BioNTech or Moderna COVID-19 vaccine) needs to await several weeks after the first shot to get the second. And full vaccination, regardless of whether it’s a one-dose or two-dose vaccine, is not achieved until two weeks after the final dose.

We suggest that businesses with 100 or more employees put their workforce on notice soon that the OSHA emergency standard will require everyone to get vaccinated. Businesses need to gauge how challenging compliance might be if and when the mandate goes into effect.

If your workforce population is around 80% or 90% (or higher) fully vaccinated, compliance might not be daunting. If your rates are closer to 50% or 60% (or lower), you need to start thinking about implementing the mandate soon, and planning for weekly testing options now. You also want to give employees a head start if they need to raise medical or religious objections to vaccination. Employers should have medical and religious exemption forms on file to provide to provide to employees who raise objections.

 

Legal Challenges

As mentioned above, one state has already challenged the Biden vaccination plan in a legal forum. The state of Arizona filed a lawsuit last month asking a federal court in Arizona to declare the vaccine mandates unconstitutional. The lawsuit contends that the Biden administration does not have authority under the U.S. Constitution to require vaccines.

Similar challenges to past emergency OSHA standards have had mixed results. The legal standard is high: OSHA must demonstrate that workers are in “grave danger” to justify issuing emergency temporary standards. With global COVID-19 deaths recently hitting 5 million, it seems to these authors that OSHA will be able to satisfy the ‘grave danger’ standard.

 

Marylou Fabbo and John Gannon are attorneys at the firm Skoler, Abbott & Presser, P.C., in Springfield, who both specialize in employment law and regularly counsel employers on compliance with state and federal law; (413) 737-4753; [email protected]; [email protected]

Some Tips on Tips

By Contributor
Employment

Breaking Down the Trickier Aspects of Massachusetts Laws

By Ludwell Chase and Amy B. Royal, Esq.

State and federal laws pertaining to minimum wage, tips, overtime, and employing minors are complicated. As a result, these are areas where mistakes are often made.

Ludwell Chase

Ludwell Chase

Amy B. Royal, Esq

Amy B. Royal, Esq

Employers, however, cannot afford these errors because the consequences of not complying with these laws can be very costly. In fact, in Massachusetts, there are mandatory treble (triple) damages for violations of wage-and-hour laws relating to minimum wage, tips, and overtime. This means that, if an employer is found in violation of state law, at a minimum, for every dollar an employer does not pay in accordance with wage-and-hour laws, that employer will have to pay three times that amount.

Under Massachusetts and federal law, employers are allowed to pay employees who receive tips an hourly wage that is lower than the minimum wage. This works by allowing employers to take a ‘tip credit’ for a certain amount in tips that the employee earns. The employee must not make less than minimum wage when their tips and hourly wage are combined. Under the federal law, the Federal Labor Standards Act, all hourly workers must be paid the federal minimum wage of $7.25. Tipped workers may be directly paid $2.13 per hour if their tips and hourly wage combined are at least equal to the minimum wage. In other words, employers can claim a ‘tip credit’ of $5.12 per hour.

The U.S. Department of Labor (DOL) recently released new proposed regulations for tipped workers that reinstate the 80/20 rule. This rule limits the amount of time tipped workers can spend performing activities that are related to tip-generating duties, while their employers can still claim the tip credit. Tipped workers must spend at least 80% of their time performing directly tip-generating activities, such as serving customers, and no more than 20% of their time performing not directly tip-generating activities, such as setting tables. This rule was previously in effect but was replaced by DOL guidance in 2018.

The 2018 guidance provided that employers could claim the tip credit if non-tipped duties were performed at the same time as tipped duties, or if the non-tipped duties were performed for a reasonable time before or after tipped duties. This new proposal returns to the 80/20 rule. In addition, the new proposal specifies that, if an employee performs non-tipped activities for 30 minutes in a row, the employer cannot pay the employee the lower tipped hourly wage for that time.

For employers with tipped workers that are subject to federal wage-and-hour law, this proposal is a good reminder that they need to pay attention to these potential changes and their effects on how they compensate employees.

 

Caution on the Menu

Massachusetts has its own complex laws relating to tips, minimum wage, and overtime. As a result, these are areas where it is easy for employers to make mistakes. Therefore, employers need to pay special attention to ensure they are complying with both state and federal laws. As of Jan. 1, 2021, the minimum wage in Massachusetts is $13.50 per hour. Massachusetts is incrementally increasing the minimum wage in order to reach a $15 minimum wage by 2023. For now, employers may pay workers who make at least $20 a month in tips a tipped hourly wage of $5.55 and take a tip credit of up to $7.95 per hour, for a combined minimum wage of $13.50.

The Massachusetts Tip Law mandates that all tips must be given to employees whose work directly generates tips, and that employers and managers may not keep any portion of their employees’ tips. The law applies to three categories of employees: waitstaff employees, service bartenders, and service employees. Waitstaff employees include waiters, waitresses, busboys, and counter staff who serve beverages or food directly to patrons or clear tables, and do not have any managerial responsibilities. Service bartenders prepare beverages to be served by another employee. Service employees include any other staff providing service directly to customers who customarily receive tips but have no managerial responsibilities. For the purposes of this law, managerial responsibilities are duties such as making or influencing employment decisions, scheduling shifts or work hours of employees, and supervising employees.

Massachusetts law allows for ‘tip-pooling’ arrangements. This means all or a portion of tips earned by waitstaff employees are pooled together and then distributed among those employees. Employers must be cautious when administering a tip pool and ensure that only waitstaff, service bartenders, and service employees are being paid from the pool. This means managers and back-of-house employees like cooks and dishwashers cannot share in tips. Even employees with limited managerial roles who also directly serve patrons are not considered waitstaff employees on days when they perform managerial duties.

When employees do not receive enough in tips to make up the difference between the tipped hourly wage and the minimum wage, employers must pay the difference. Employers are required to calculate tipped employees’ wages at the end of each shift, rather than at the end of the pay period. This requires employers to keep track of how much workers receive in tips for each shift. This may also require employers to pay their tipped employees additional amounts in order to compensate for slow shifts.

Under Massachusetts law, certain businesses, including restaurants, are exempt from paying employees overtime; however, they may not be exempt under federal law. If subject to federal law, employees working in restaurants must be paid one and one-half times the minimum wage (not one and one-half times $5.55 per hour) for all hours worked in excess of 40 hours per week.

Under the Massachusetts Tip Law, if a restaurant includes a service charge, which serves as the functional equivalent of an automatic tip or gratuity, all the proceeds from that service charge must be paid only to waitstaff employees, service employees, or bartenders as a tip. Employers may, however, charge a ‘house fee’ or an ‘administrative fee,’ which they may use or distribute at their discretion, but only if it is clearly stated to customers that the fee is not a tip, gratuity, or service charge for tipped employees. Thus, any fees not intended as gratuities and not paid solely to tipped employees should not be labeled as a service charge.

 

Food for Thought

These complexities are especially important to Massachusetts employers, given that the consequences of failing to comply with wage-and-hour laws can be costly, and the penalty is the same regardless of whether the employer violated the law willfully or by mistake.

Considering the consequences of violations, businesses with tipped employees should regularly consult with their employment counsel to review their practices and policies to ensure compliance with state and federal law.

 

Ludwell Chase and Amy B. Royal work at the Royal Law Firm LLP, a woman-owned, boutique, corporate law firm; (413) 586-2288; [email protected]

In the COVID World, Businesses Should Examine Insurance Expenses

By Contributor
Law

Policy Decisions

By Timothy M. Netkovick, Esq.

The COVID-19 pandemic has caused many businesses to examine their balance sheets. One of the areas that could be looked at is how much benefit a business is getting from its current insurance portfolio, and whether downsizing coverage could be an option.

In today’s world, a common feature of a business-insurance portfolio is employment-practices liability insurance (EPLI), which is different than traditional liability insurance and provides coverage for discrimination, wrongful termination, and other workplace issues.

EPLI typically covers discrimination claims based upon sex, race, national origin, age, and all other characteristics prohibited by law. This includes claims made under the Americans with Disabilities Act, the Family Medical Leave Act, associated state discrimination statutes, and other federal laws. EPLI policies usually provide coverage to the company, management, supervisors, and employees from claims that arise under the policy. EPLI typically does not cover wage-and-hour law violations, unemployment issues, ERISA, or COBRA matters.

Timothy M. Netkovick, Esq

Timothy M. Netkovick, Esq

“COVID has prompted myriad adjustments in the business world. EPLI is one of the expenses a company will want to examine to see if it is getting the most bang for its buck.”

Perhaps your business has been fortunate enough to avoid employment litigation over the past few years. Therefore, the cost/benefit analysis to your business will be different than a business that has been tied up in employment litigation in the recent past. The first obvious cost is the cost of purchasing the policy. Higher insurance coverage costs more than a policy with a lower-policy limit. In addition to the cost of purchasing the policy, businesses will also need to factor in the cost of the ‘retention’ it is required to pay in the event of a claim.

Retention is similar to a deductible in other insurance policies, and is the amount of expenses for which the business is responsible before the insurer will begin paying for the cost of defense. Insurers use retention as a way to avoid incurring the expense of defending against nominal or frivolous claims by passing on that expense to the business. Conversely, the business will also want to evaluate the amount of their retention prior to obtaining EPLI.

A business will need to evaluate its options if it is faced with a high retention and a small amount of discrimination claims that are usually resolved at the administrative level. Has your business had EPLI for several years and never exhausted its retention? Or does your business have a high volume of discrimination cases at the administrative level and also never exhausted its retention?

Another factor to consider in evaluating the cost of EPLI is your company’s approach to employment lawsuits. Businesses will need to have a consistent strategy when it comes to employment lawsuits. Is your company going to vigorously defend against all claims? If so, that may impact your decision on the cost of the EPLI policy you intend to purchase. How many claims are made against your company? The more claims are reported, the more the policy will cost, and the higher the retention amount will be. The increased retention will have an impact on the company’s budget for the next policy period.

COVID has prompted myriad adjustments in the business world. EPLI is one of the expenses a company will want to examine to see if it is getting the most bang for its buck.

 

Timothy M. Netkovick, Esq. is a litigation 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; (413) 586-2288; [email protected]

 

Employers Must Focus on Returning Women to the Workforce

By Contributor
Law

Changing the Dynamic

By Jeremy M. Forgue

 

The COVID-19 pandemic has impacted the workplace forever.

According to a report titled “Women in the Workplace – 2020,” women have been hit especially hard. As the report explains, “the COVID-19 crisis has disrupted corporate America in ways we’ve never seen before. No one is experiencing business as usual, but women — especially mothers, senior-level women, and black women — have faced distinct challenges. One in four women are considering downshifting their careers or leaving the workforce due to COVID-19.”

Gender and racial diversity are unquestionably beneficial to the workplace as it can lead to a wider talent pool with people who provide different perspectives and skill sets to utilize. With job rates slowly climbing back towards pre-pandemic levels, businesses need to put a conscious effort on recruiting and retaining female employees, and females of color in particular. Businesses small and large should re-evaluate their current practices and consider several ways to increase or maintain women in the workforce. Here are some suggestions from an employment-law attorney.

 

Flexible Schedules and Core Hours

This can be the easiest strategy, depending on your business. Allowing employees to establish their own schedules or flex the typical 9-5 business model can assist them in better balancing their home and work responsibilities. This option can allow parents to mold their schedule around daycare availability (e.g., 7 a.m. to 3 p.m. or 10 a.m. to 6 p.m.) or split their shift around home responsibilities.

 

Forgiving Gaps in Workers’ Employment History

According to a study by ResumeGo, applicants with work gaps of greater than six months have a 45% lower chance of receiving job interviews. Millions have lost their jobs during the pandemic and remain unemployed. With so many individuals forced to exit the workforce over the past year, accepting gaps in employment is critical to eliminating these hiring barriers.

 

Offering Job Training or Cross-training

The COVID-19 pandemic has made it clear that new job skills are critical in a more digitized working environment. Remote work and Zoom meetings are here to stay. Offering initial job training for skills and requirements that do not require certification or a degree will allow displaced workers a chance to gain useful skills in a new working environment. Similarly, cross-training employees to learn each other’s responsibilities (so long as their positions have enough overlap) can be effective when emergencies arise due to absences from work or other staffing challenges.

 

Create Mentorship Programs or Opportunities

A female-led or minority-led mentorship program can support and promote the advancement of under-represented groups within the workplace. Seasoned women employees can be great support structures for other women trying to begin their careers or advance within the company. Women who are currently excelling at their position or working in an executive-level position can assist other women dealing with similar daily challenges, such as work-life balance.

 

Re-evaluate the Businesses Culture

This one is more abstract and requires internal inquiries, but you should ask if your business provides a culture where women are valued or has a diverse demographic that is often desired by applicants. Ask yourself: is your workforce gender-diverse? What about the leadership positions? If the answer to these questions suggests unequal gender representation in the workplace, ask whether it is because of a culture that does not support women. Perhaps it’s more of a recruiting issue. In any event, you should dig deep for answers and insist on change.

 

 

Childcare Options

Providing on-site childcare is probably an option only for larger businesses. However, here are a few suggestions for all businesses to consider:

• Revisit your employee benefits. Do you already, or can you afford to, provide a childcare subsidy, childcare referral services for nearby locations, or extended paid leave?

• Partner with surrounding businesses. If your business space is too small to provide on-site childcare, reach out to nearby childcare locations and discuss rates and hours that could create a partnership between the businesses or, at the very least, a referral resource.

• Offer extended FFCRA benefits, which are available until Sept. 30, 2021, and can be used by employees to take time off for childcare or other COVID-19-related reasons.

 

Final Thoughts

After making positive strides in the workforce over the past decade, women’s participation in the workforce declined over the last year. To correct this trend, businesses will need to put a conscious effort toward recruiting women into their workforce.

 

Jeremy M. Forgue is an attorney with the law firm Skoler, Abbott & Presser, P.C. in Springfield; (413) 737-4753; [email protected]

What Authority Do Municipalities Have with Cannabis License Seekers?

By Contributor
Law

MREs and HCAs

By Mary-Lou Rup

Under Massachusetts’ recreational-marijuana statute, those seeking to operate a marijuana retail establishment (MRE) must obtain a license to operate from the Cannabis Control Commission (CCC). Municipalities exercise local control over MRE applicants through ordinances or bylaws setting ‘reasonable’ controls on the time, place, and manner of operations and limiting the number of MREs within their borders.

During the first step of the licensing process, MRE applicants must obtain approval from the municipality, and the municipality and applicant execute a host-community agreement (HCA), which sets forth the conditions under which the MRE can operate. During the second step, the CCC determines to which approved applicants it will issue licenses, which in part requires a one-page certification that the applicant and municipality have executed an HCA.

Municipalities may require that MREs pay a ‘community impact fee,’ statutorily capped at 3% of the MRE’s gross sales for five years, to cover a variety of actual costs to the municipality reasonably related to the MRE’s operations.

“An appeal now pending in the Supreme Judicial Court (SJC) may resolve issues related to the degree to which municipalities exercise control over which applicants move on to the second step.”

In HCAs, many municipalities require additional payments by the MREs, often based on an additional percentage of gross sales and/or charitable donations to entities selected by the municipality. These additional costs have, for the most part, gone unchallenged by MRE applicants anxious to obtain the HCA necessary in order to be licensed to operate.

An appeal now pending in the Supreme Judicial Court (SJC) may resolve issues related to the degree to which municipalities exercise control over which applicants move on to the second step. The case involves Mederi Inc., which sought to operate one of five MREs permitted by the city of Salem. Mederi received the necessary special permit and alleges it met all other requirements of the city’s application process. A city committee reviewed the applications before entering HCAs with four applicants; Mederi was not among them and sued. Dismissal of that suit lead to Mederi’s appeal.

Two arguments made by Mederi are of interest. Mederi challenges the city’s authority to select with which qualified applicants it would enter HCAs, effectively controlling those which the CCC could then consider for licensing. Mederi also argues that the city exceeded its lawful authority by, among other actions, imposing as a condition of its HCA fees in excess of the 3% community-impact fee. Specifically, the city required five annual payments of 1% of gross sales to a ‘traffic-enhancement fund’ and at least $25,000 in charitable contributions to local causes.

Mederi posits that allowing municipalities to utilize these ‘pay-to-play’ provisions and to pre-select which qualified applicants it will allow to advance to the CCC adversely impacts the statute’s provisions giving priority to economic-empowerment applicants — provisions intended to assist areas of disproportionate impact disadvantaged by high rates of criminal activity involving marijuana.

In opposition, the city argues that it could properly decide with which applicants to enter into HCAs. It asserts that the local-control step of the MRE-licensing process allows municipalities to weigh competing proposals and exercise discretion in choosing the most suitable applicants. The city argues that its selected applicants were the “strongest possible operators” based on experience in the marijuana industry and intent to operate in the “least impactful locations” in Salem.

The CCC filed an amicus brief in the case. Pointing to competing legislative mandates, it asserted that, while the statute does not authorize it to regulate or participate in the initial local-control portion of the licensing process, the statute also requires that it give MRE licensing priority to existent medical-marijuana treatment centers and economic-empowerment applicants.

It noted that municipalities’ exclusive control of the HCA process seemed to advantage more experienced and better-resourced applicants, leaving economic-empowerment applicants at a competitive disadvantage, and, in effect, controlled those whose license applications the CCC is able to consider. The CCC has recommended amendments to the statute, addressing, among other matters, this issue and the additional fees imposed in HCAs. Its recommendations are presently under consideration in the legislature.

Stay tuned. The SJC heard arguments on Feb. 3 and, under its usual 130-day timeline, may be expected to issue its decision by early summer.

 

Mary-Lou Rup served as associate justice of the Massachusetts Superior Court until her retirement in 2018, when she joined the litigation group of Bulkley Richardson as senior counsel.

How to Avoid Those Family Fights Over Grandma’s Tchotchkes

By Contributor
Law

Knick-knack Knockouts

By Valerie Vignaux, Esq.

The most prolonged and venomous arguments I’ve witnessed in my estate-administration practice have not been over money. In my experience, the highest level of emotional warfare is reserved for tangible, personal property, or the ‘stuff’ that mom and dad, or grandma and grandpa, leave behind in the house.

The $7 porcelain ballerina that sat on the mantel for 50 years, the carbon-steel chef’s knife in the kitchen, costume jewelry, a crocheted Kleenex holder, photo albums, even the washing machine, if you can believe it — these are the objects that can send otherwise well-behaved, loving, and gentle family members to opposite corners of the boxing ring to steel themselves for a fight. And fight they do.

“Not me, and not my family,” we all say. But it can happen to the best of us, and the conflict has the potential to do serious damage to a family already grieving the loss of a loved one. Adult siblings revert to traits and behaviors not exhibited since ages 6 to 12. Beloved in-laws who were once an integral part of the family are now interlopers who deserve nothing. And only after mom is gone do we learn that she seems to have promised her cuckoo clock to all four of her children. (Pro tip: none of you should take the cuckoo clock. Your own families will thank you for letting that one go.)

How do we prevent such consternation at a time when we should be coming together in our shared sadness? A list. A simple, old-fashioned list. I call such a list a will memorandum, and Massachusetts General Laws recognizes such a “separate writing identifying [the] devise of certain types of tangible property.”

One of the most appealing aspects of the will memorandum is that this list can be updated, changed, thrown out, and begun anew at any time, without having to change the will itself. In fact, a properly written and executed last will and testament document typically provides that the author (the testator or testatrix) may leave such a memo, listing specific items for specific people.

“The most prolonged and venomous arguments I’ve witnessed in my estate-administration practice have not been over money.”

For any object of significant monetary value — jewelry, works of art, vehicles, and rare books are all such examples — I recommend providing for distribution directly in the will or trust document, as opposed to a separate memorandum. Similarly, a will memorandum is not an appropriate place to include gifts of money or real estate. But for all those personal belongings that have more emotional than dollar value, such a list is perfect.

Some of my clients have also placed notes on the backs or bottoms of objects around the house, stating who is to receive it upon the client’s death. This works, but I prefer a list that is dated and signed and kept with the client’s copy of his or her will. It is helpful, too, if I, as the client’s estate-planning attorney, have a copy in my file.

How does one start writing a will memorandum? Ask your family members what they want. Understandably, many people are not eager to have these conversations, but it is a gift to those you leave behind to prepare for your passing, and a gift to prevent discord in the family.

Want to achieve the next level of preparedness? Start giving possessions away before you die. If you know that your niece would enjoy your bamboo fishing pole, give it to her now so you can see her smile, hear her thank you, and forestall any arguments about it later. Further, giving away some of your possessions now will reduce the burden on those you leave behind to clean out your residence.

Take a look around your home. Is there decluttering that could be done now? (For almost all of us, the answer is assuredly yes). Start making a list of items that you can part with now, and ask your family and friends if they’re interested in any of them. By starting the process during your life, you are lessening the burden you might otherwise leave your loved ones.

‘But I’m only 40 (or 50 or 60),” you say. You’re not too young to start. Do yourself and your family members a favor and start making that list. Every one of us has at least a few things that would be meaningful to another. If you don’t have children, consider your siblings, nieces, nephews, and friends.

One last thing: although it can feel like tempting fate, please be assured that making a will memorandum (or having a will prepared, for that matter) will not cause your death. It will not court the agents of your demise. It will be an exercise of control over the uncontrollable. It will actually make you feel better, not worse. And it will make things markedly easier for those loved ones you leave behind.

 

Valerie Vignaux is an attorney with Bacon Wilson, P.C., and a member of the firm’s estate-planning and elder-law team. She assists clients with all manner of estate planning and administration, including probate, and provides representation for guardianship and conservatorship matters. She received the Partner in Care Award from Linda Manor in 2017 and served on the board of directors for Highland Valley Elder Services; (413) 584-1287; [email protected]

What Are Employers Really Getting with These Documents?

By Contributor
Law

Non-competition Agreements

By Timothy M. Netkovick, Esq.

Everyone is aware of the honeymoon phase of the employment relationship — that time period when the employee begins work and both parties are filled with high expectations for the relationship.

Possibly, prior to beginning the relationship, an employer has the employee sign a non-competition agreement as a sort of prenuptial agreement, hoping to never have to use it. However, fast-forward a few years, the employment relationship goes sour, and the employee leaves the company. Not only does the employee leave the company, but they also begin soliciting clients, or maybe even fellow employees, to join them at their new place of employment.

As employers are aware, Massachusetts enacted the Noncompetition Agreement Act in 2018. Prior to the act, there was little restriction on the contents of a non-competition agreement other than what terms would be enforced by a court in the event of a dispute. That changed with the provisions of the act. Now, in the scenario above, if the employer sought to enforce the non-competition agreement, it would need to pay the former employee not to work during the competition period.

This is because the act mandates that, to be enforceable, a non-competition agreement must contain a ‘garden-leave clause,’ defined as 50% of the employee’s highest annualized salary within the two years preceding termination.

“While the Noncompetition Agreement Act requires employers to pay former employees not to work, there may be other options available to employers.”

Employers therefore must answer the question: what do I really want with a non-competition agreement? Is it to stop the former employee from working? Or is the goal to maintain the status of my business? If the goal is to maintain the status of the business, employers may be able to utilize non-solicitation and non-disclosure agreements, which can protect the former employer’s interests while also allowing the former employee to work.

Both such agreements are excluded from the definition of ‘non-competition agreement’ by the act, meaning they do not need to include garden-leave clauses.

A non-solicitation agreement does not prohibit a former employee from working for a competitor when the employment relationship ends. Instead, it serves to prohibit the former employee from soliciting clients and other employees of the former employer to join them at their new place of employment. A non-solicitation agreement can therefore be an effective tool in preserving the current status of the business by prohibiting a former employee from taking clients and other employees with them to their new place of employment.

A non-disclosure agreement also does not prohibit a former employee from working for a competitor when the employment relationship ends. Nor does it prohibit the former employee from soliciting clients and other employees from joining them at their new place of employment. Instead, it serves to prohibit the former employee from disclosing any confidential information from the former employer. The confidential information protected could be a trade secret or other highly sensitive material.

In short, while the Noncompetition Agreement Act requires employers to pay former employees not to work, there may be other options available to employers. It is therefore wise to consult with employment counsel to review your potential options to protect your business interests after the employment relationship has ended. u

 

Timothy M. Netkovick, Esq. is a litigation 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; (413) 586-2288; [email protected]

Start the New Year by Implementing Best Employment Practices

By Contributor
Law Special Coverage

Ringing Out the Old

By Amy B. Royal, Esq.

Most of us are happy to leave 2020 behind.

It was a year wrought with struggles both at home and in the workplace. Many companies faced closures, near-closures, reduced capacities, and reduced business all because of the impact of the COVID-19 global pandemic. Companies were also hit with several new, COVID-related laws, such as paid emergency leaves of absence, furthering the burdens they were facing during an already-difficult time.

It isn’t surprising that we are ready to ring in and embrace this new year. And, with the new year here, v is a good time to shift gears, reboot and regroup, and return to building better business practices. With that said, the new year provides an opportunity to proactively take a look at your company’s current employment-law practices to ensure compliance with the myriad evolving employment laws affecting your company.

 

Paid Family and Medical Leave and Minimum Wage

Two noteworthy laws take effect in Massachusetts this January: the Paid Family and Medical Leave (PFML) law and the revised minimum-wage law.

PFML law takes effect in the Bay State this January. While employer obligations under PFML commenced on Oct. 1, 2019, as of Jan. 1, 2021, employees can begin to apply for and receive paid leave for most medical and family leaves of absence. The remaining leave provisions will take effect on July 1, 2021. Under PFML, employees can take paid leaves for their own serious health condition, to bond with a newborn child, to bond with a child after adoption or foster-care placement, to care for a family member with a serious health condition, or to manage family affairs when a family member is on active duty in the armed forces.

All private Massachusetts employers are covered under the law regardless of their size. Leave entitlements range from 12 weeks to 26 weeks depending on the type of leave needed, and employees can take leave intermittently, if medically necessary, for medical leave for an employee’s own serious health condition or take family leave to care for a covered service member or to care for a family member with a serious health condition.

Amy B. Royal

Amy B. Royal

“With the new year here, it is a good time to shift gears, reboot and regroup, and return to building better business practice.”

Intermittent leave cannot be used to bond with a child. PFML and federal FMLA run concurrently. The same is true for the Massachusetts Parental Leave Act. Employees can choose to use but may not be required to use other forms of paid time off. PFML provides job protection and restoration rights akin to the federal FMLA. Employers are required to restore employees who take leave to their previous position, or to an equivalent position, with the same status, pay, benefits, length-of-service credit, and seniority as of the date of leave.

On Jan. 1, 2021, the Massachusetts minimum wage increased from $12.75 to $13.50 per hour. The service rate also increased from $4.95 to $5.55 per hour. Premium pay for Sunday retailer workers decreased. The next step in our minimum-wage rise is to $15 per hou, slated to take effect in 2023.

 

Proactive Employment Steps

The new year can serve as a good reminder and placeholder for reviewing and auditing your employment practices. Doing so will enable you to be strategic about that piece of your business and move toward creating a detailed and updated personnel plan going forward.

A good plan starts with an annual review of employment policies and manuals, written job descriptions, and employee-training programs to ensure that your company is compliant with state and federal laws and that your employees are properly trained in your processes and procedures.

Well-crafted employment policies are important because they communicate expectations to employees and help insulate your company from certain legal liabilities. When crafting employment policies, know that certain ones are legally required, while others are good business practice. Depending on your company’s size, required employment policies may include anti-discrimination, anti-harassment, parental leave, paid family and medical leave, and sick time. The implementation of other policies may be a good idea, such as codes of conduct, discipline and termination, workplace safety, off-duty conduct and the use of social media, drug and alcohol use and testing, use of cell phones, and use of company computer equipment and other electronic resources.

Written job descriptions are also a good practice. While not legally mandated, they can be a good tool to assess and evaluate prospective and current employees and also can reduce your company’s exposure to certain lawsuits. Accurate job descriptions that set forth the essential functions of a position can minimize liability when your company is faced with either internal requests for accommodations or external disability claims. Providing an accurate job description to an employee’s medical provider can also help determine whether an employee can perform their job with or without an accommodation or qualify for a leave of absence.

Another good business practice is employee training. Training managers and supervisors is especially important. Indeed, such trainings can help them understand company policies and their roles and responsibilities under these policies. Particularly important trainings for managers include anti-discrimination and anti-harassment, employee disabilities and recognizing requests for reasonable accommodations, and effective employee discipline and documentation.

Many employment issues that eventually evolve into litigation stem from actions or inactions of managers or supervisors. Employers should regularly conduct trainings to give these key employees the knowledge and skills required to enable them to properly handle situations as they arise.

The cost of defending expensive litigation far exceeds the investment in taking proactive, preventive steps to reduce the risk of litigation. Therefore, employers should consider conducting an internal audit at the beginning of each and every new year.

 

Amy B. Royal, Esq. is a litigation 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; (413) 586-2288; [email protected]

Should Employers Require Employees Get the COVID-19 Vaccine?

By Contributor
Law

A Question of Mandates

By Timothy F. Murphy

 

Employers have a key role to play in ensuring the successful rollout of COVID-19 vaccines and that people are safe at work. Many employers may wish to adopt vaccine mandates, especially if their employees work in close contact with others. But before doing so, employers need to consider a number of things.

 

Can Employers Require Vaccinations?

Yes. Non-union employers can unilaterally require employee vaccinations because employment relationships are ‘at will,’ and they have a legal duty to provide a safe and healthy workplace. Many employers already require workers to get inoculated against certain infectious diseases.

 

Can Employees Object to Vaccine Mandates?

Yes. Anti-discrimination laws provide disabled and religious employees with legal protections from vaccine mandates. Employers that require employees to receive the COVID-19 vaccine must meet certain requirements under those laws.

Timothy F. Murphy

Timothy F. Murphy

“Non-union employers can unilaterally require employee vaccinations because employment relationships are ‘at will,’ and they have a legal duty to provide a safe and healthy workplace.”

A worker with a covered disability may seek an exemption from a vaccine mandate. For instance, medical advice to avoid a vaccine due to an employee’s underlying health condition may legally justify a vaccine refusal. In such situations, the employer must explore whether an exemption is a reasonable accommodation given the disability and job duties — so long as it isn’t an undue burden for the employer. Accommodations — like telework or working in isolation from co-workers — that would allow the unvaccinated employee to perform essential job functions would likely not be an undue burden.

According to recent guidance from the Equal Employment Opportunity Commission, sincerely held religious beliefs may also justify a vaccine refusal. An employer must provide a reasonable accommodation “for the religious belief, practice, or observance” that prevents the worker from receiving the vaccine, unless that accommodation poses more than a “de minimis” cost or burden. Employers may seek verification of such beliefs only if they have an objective reason for doing so.

 

Government Vaccine Mandates Appear Unlikely for Now

A general state vaccine mandate does not appear to be in the cards anytime soon. On the federal level, President-elect Biden has signaled that he is not considering a vaccine mandate at this time. It also appears unlikely that the federal agency charged with workplace safety, the Occupational Safety and Health Administration (OSHA), would require employers to mandate a COVID-19 vaccine. In the past, OSHA has permitted employers to require employees to receive the flu vaccine.

 

Public-health Experts Warn Against Mandates for Now

Even if employers can legally mandate COVID-19 vaccinations, U.S. Surgeon General Jerome Adams recommends against it. “Right now, we are not recommending that anyone mandate a vaccine,” Adams said in a recent interview with Yahoo Finance, noting that Pfizer’s vaccine hasn’t been fully approved yet. According to Saad Omer, a vaccinologist and infectious-disease epidemiologist at Yale University, “mandates shouldn’t be the frontline policy option.”

 

Avoid the Backlash

A vaccine mandate could trigger employee-morale issues. Vaccine hesitancy is a concern across the country. One study revealed that more than one-third of Americans would refuse a COVID-19 vaccine if offered one. However, other data suggests that Americans’ willingness to take a COVID-19 vaccine has risen as data on the vaccines’ efficacy have emerged. Many people have said they are more comfortable waiting a few months to get the vaccine. Employers need to be sensitive to employee concerns if vaccination is mandated as soon as it becomes publicly available.

 

Reduce Potential Legal Liability

Employees injured by a mandated vaccine may bring legal claims for workers’ compensation, negligence, and OSHA violations. It is difficult to predict the success of such claims. The ability to argue that government recommendations were followed would go far in defending against them. Limiting a vaccine mandate to high-risk positions or workplaces may also reduce potential legal liability and employee backlash.

 

Wait and See Is the Way to Go

Most Massachusetts non-healthcare employers and their employees are not going to have access to any vaccines before the spring of 2021. So most employers can wait to decide to mandate vaccines simply because there won’t be vaccines immediately available.

In the meantime, employers should be prepared to provide reliable information; reinforce other steps to protect employees and the public, like continued screening, fitness-for-duty programs, and contract tracing; implement employee incentives for voluntary vaccinations; and consider mandatory rapid testing, as those products come to market, as an alternative to mandatory vaccination.

 

Timothy Murphy is a partner at Skoler, Abbott & Presser, P.C., focusing his practice on labor relations, union avoidance, collective bargaining and arbitration, employment litigation, and employment counseling.

That Is the Question When It Comes to Wills and Trusts

By Contributor
Law

To Contest or Not to Contest?

Benjamin Coyle, Esq.

 

None of us want to think that, after we pass away, our loved ones may someday fight over an inheritance. But as we all know, family relationships are complex, and can be particularly so when finances are involved. Add in the grief of losing a loved one, and suddenly, relatives who have always gotten along well may find themselves at odds. Keeping peace in the family is often a vital consideration in estate planning.

One of the most important components of a person’s estate plan is the document that ultimately directs the final disposition of their property, both real and personal, upon their passing. In most circumstances, that document is either a last will and testament or a trust. A question that often arises during the drafting process is: “what can I do to make sure that no one fights over my estate?”

Benjamin Coyle

Benjamin Coyle

“Family relationships are complex, and can be particularly so when finances are involved. Add in the grief of losing a loved one, and suddenly, relatives who have always gotten along well may find themselves at odds. Keeping peace in the family is often a vital consideration in estate planning.”

While an attorney can never guarantee that heirs or beneficiaries will not fight, there are provisions that can be made to deter an interested person from contesting the terms of a will or trust. For wills, Massachusetts law recognizes a provision purporting to penalize an interested person for contesting the will or instituting other proceedings relating to the estate. For trusts, the courts in Massachusetts have upheld the enforceability of ‘no-contest’ (or ‘in terrorem’) clauses.

In 2012, Massachusetts adopted the Uniform Probate Code (UPC), a model code adopted by 18 states in order to standardize probate laws. However, in adopting the UPC, Massachusetts did not incorporate the model’s no-contest provision, which essentially allowed for challenges or contests where probable cause exists. Rather, Massachusetts determined that the Commonwealth would maintain its historic baseline regarding no-contest provisions, and, in doing so, the Legislature provided that such clauses are enforceable as a matter of law, subject to some limitations as determined by the court.

Generally speaking, a no-contest provision is a clause within a will or trust with specific language stating that any person who challenges the estate must then forfeit their share. One of the primary purposes of including such a provision is to deter an interested person from bringing a challenge against the estate.

Typically, if an interested person believes they are not receiving what they may consider to be their fair share of the estate, that perception can provoke a desire to fight the terms of the will or trust. Emotions tend to run particularly high if a sibling or family member may receive a larger portion, or if someone is left out of an estate altogether. These challenges are not often successful, so long as the creator of the will or trust complied with all statutory requirements, was not subject to undue influence or duress, and had the appropriate mental capacity to execute the document.

Occasionally, though, when an interested person is able to present evidence of duress or incapacity, a successful challenge to a will could result in the entire document being invalidated, which would naturally include the no-contest provision. If the no-contest provision is eliminated as a result of the challenge, the contesting party may then be eligible to receive a share of the estate or trust, depending upon the other circumstances at hand.

When administering any will or trust, whether a no-contest provision is included or not, the fiduciary in charge (that is, the trustee of a trust, or the personal representative under a will) must still comply with all the other terms of the document, and the fiduciary is still responsible to beneficiaries. They are required to account to the beneficiaries for the assets under their control, as this is a matter of public policy that the courts have determined cannot be avoided with a no-contest provision.

Typically, we might see no-contest provisions enforced within the discretion of the fiduciary, for frivolous matters involving the administration of the will or trust. Occasionally, a beneficiary may ask the court for an interpretation of the provisions of a will or trust, to make sure the fiduciary is complying with its terms. Provided they are not trying to challenge or change the provisions in the document, the court is unlikely to invoke the no-contest provision when a request for interpretation is made by an interested person.

If you are a beneficiary of a last will and testament or a trust, it is extremely important to review the document to see if it contains a no-contest provision. If it does, and if a challenger comes forward, the court is likely to uphold the no-contest clause, which could result in the forfeiture of an inheritance. One must carefully weigh the options and potential outcomes before asserting a challenge.

On the other hand, if you are preparing your own estate plan and are concerned that disagreements may erupt among beneficiaries, you may wish to consider including a no-contest provision in your documents. Keeping the family peace in the future is certainly worth spending some time and effort today.

 

Benjamin Coyle is a shareholder with Bacon Wilson, P.C. He specializes in matters of estate planning and administration and also has extensive experience with real estate, business, corporate, and municipal law; (413) 781-0560; [email protected]

How Independent-contractor Law May Be Loosening Up

By Contributor
Law Special Coverage

Is the Gig Up for Some Workers?

By Amy B. Royal, Esq.

Getty Stock Images

The number of gig workers has been on the rise over the past few years with the advent of many online-platform companies, such as DoorDash, Instacart, and Uber.

The notion of gig workers and a gig-worker-based economy, however, is not new. Whether one refers to such workers as gig workers, freelancers, or broadly as independent contractors, this area of employment law has been a thorn in the side of many businesses for several decades. With the significant and robust growth in the online gig-economy world, the restrictiveness of independent-contractor law on business and business growth, as well as on worker independence, has gotten a new look.

Both a recent victory in the state of California and a new proposed rule from the federal government may be signaling a change in the tide when it comes to the future of independent-contractor law.

Independent-contractor law, especially in Massachusetts, has been very restrictive when it comes to certain business models. Many industries have historically relied on the classification of workers as independent contractors to augment their operations and build capacity as well as to attract workers who want independence when delivering services for them.

For example, traditionally, the real-estate industry has classified real-estate agents as independent contractors. Similarly, tattoo parlors, hair salons, and transportation services have done the same. In these industries, oftentimes, the expectation of the worker is that he or she will be classified as an independent contractor and, thus, have the freedom and flexibility to maintain independence over their own schedule and their own craft.

Indeed, the benefit of such gig work is often mutual: the company can reduce its overhead costs in payroll, benefits, and expenses, while the workers can retain freedom and flexibility over their schedules while garnering higher compensation for the services they deliver.

Earlier this month, California voters sent a message to their lawmakers when they passed a ballot question that exempted app-based drivers working for companies like Lyft and Uber from a California law that had previously made them employees. Earlier this year, a law had taken effect in California that made it clear these drivers were to be treated as employees and, thus, were entitled to certain employment-related benefits and legal protections. The California ballot win is a significant victory for app-based companies that utilize gig workers to deliver services.

Amy Royal

“Whether one refers to such workers as gig workers, freelancers, or broadly as independent contractors, this area of employment law has been a thorn in the side of many businesses for several decades.”

The U.S. Department of Labor (DOL), our federal agency that enforces federal wage-and-hour laws, appears to be trending toward loosening its stance on independent-contractor law as well. This September, the DOL proposed a new rule that establishes two core factors as determinative ones in an overall five-part independent-contractor test. The two core factors are the nature and degree of the worker’s control over the work and the worker’s opportunity for profit or loss based on initiative and/or investment.

Remember, this rule is pending approval and, therefore, is not the current federal law on this matter. Our current federal rule in effect for establishing independent-contractor status is based upon a multi-factor test, which can be confusing in its application, thus prompting the proposed change. The purpose behind the newly proposed rule is to bring clarity to the confusion in the application of the test itself.

Prior to the proposed rule, there was no definitive guidance on how to go about weighing and balancing the various factors and whether there was a prioritization among them. Now, the two core factors proposed should make it easier to assess a worker’s status and, arguably, pave the way for more workers to be classified as independent contractors. The proposed rule seems to recognize the prerogative of workers who want to work independently and maintain freedom from an employer’s day-to-day control over them.

For now, whether a worker is an independent contractor or an employee is a clear question in the Bay State. Massachusetts law utilizes a clear three-part test that is otherwise very restrictive on both businesses and the workers who do not want to be considered employees. In Massachusetts, when analyzing a worker’s status, there is always a presumption of employment. This means the burden is on the company to prove why a worker is not an employee.

To establish that fact, Massachusetts companies must satisfy all three parts of a three-part test: companies must show that the work is performed without the direction and control of the company, outside the usual course of the company’s business, and by someone who has their own independent business or trade in that type of work. Again, all three parts of this test must be met for the Massachusetts worker to be deemed an independent contractor.

Where most companies fail the test is with respect to the second part — that the worker must perform work outside the usual course of the company’s business. For example, with respect to a driver for Uber, arguably, under Massachusetts independent-contractor law, the driver would be deemed an employee; the company is in the business of ride sharing, and the driver is performing that work by driving customers to and from certain locations.

The problem with the misclassification of workers as independent contractors is that it carries with it very stiff penalties and triggers several potential violations of laws. Indeed, misclassification of an independent contractor can create issues with respect to wage-and-hour law, such as minimum wage and overtime compensation, unemployment benefits, workers’ compensation coverage, and certain payroll-tax withholdings.

Furthermore, situations involving the misclassification of workers can give rise to class-action lawsuits. Companies that violate Massachusetts wage-and-hour laws alone are subject to mandatory treble damages for any unpaid wages. In addition, a prevailing employee will be awarded attorneys’ fees and costs of the litigation.

What is the takeaway on all of this for your company? While the law may be changing in other parts of the country, nothing has changed in Massachusetts (so far). Massachusetts law remains very strict and extremely restrictive when it comes to proving independent contractor status. As noted, misclassifying a worker can carry steep penalties and trigger a violation of various laws, as well as class-action claims.

But stay tuned. This area of the law seems to be evolving with the newly proposed federal rule and the California state-law change. It is estimated that, collectively, Uber, Lyft, Instacart, Postmates, and DoorDash spent approximately $200 million to lobby California voters to change their state law on independent-contractor status. That may spark more challenges to independent-contractor laws in other states, including Massachusetts.

 

Amy B. Royal, Esq. is a litigation 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; (413) 586-2288; [email protected]

Biden Administration Will Create a More Employee-friendly Landscape

By Contributor
Law

An Employment-law Forecast

By Andrew J. Adams, Esq.

On the heels of a fiercely contested election, President-elect Joe Biden has started his transition work, and has laid out plans that have the potential to affect business owners nationwide.

As expected, many these changes lean in favor of the employee as opposed to the employer. However, some plans should assist small businesses. While it’s difficult to predict the future, we can make some solid projections about what employers can expect from the Biden administration.

 

Workplace Safety and OSHA

Andrew J. Adams

Andrew J. Adams

The most immediate effect upon employers is likely to be a push by the Biden administration to enact emergency standards requiring employers to develop workplace-safety plans in reaction to the COVID-19 pandemic. Under the current administration, the Occupational Safety and Health Administration (OSHA) performed the lowest number of inspections in the history of the agency and reduced the number of inspectors on staff to the lowest level in the past 40 years.

Biden will immediately address these policies, leading to increased inspections and enforcement, as was the case under the Obama administration. This means employers will likely face harsher penalties for non-compliance and more substantial fines than they have over the past four years.

Employers are also likely to encounter the return of the Obama administration’s workplace-safety reporting rule. This would require certain employers to report illness and injury information to OSHA, which will then be maintained online as publicly available information.

 

Wage-and-hour Law

President-elect Biden’s campaign has stated he will seek to address wage inequalities between black and white workers, make it easier for workers to pursue claims of discrimination, and push for a higher minimum wage. The administration would increase the funding allotted to the Equal Employment Opportunity Commission, the federal agency tasked with enforcing employment-discrimination laws.

“The most immediate effect upon employers is likely to be a push by the Biden administration to enact emergency standards requiring employers to develop workplace-safety plans in reaction to the COVID-19 pandemic.”

In what is likely to be an immediate change, Biden is expected to rescind President Trump’s executive order banning training for federal agencies and contractors that contained “offensive and anti-American race and sex stereotyping and scapegoating.” The executive order banned training on several topics and recommended keyword searches for terms such as “white privilege,” “systemic racism,” and “unconscious bias” to identify if trainings were inappropriate under the order.

Employers can also expect a push at the federal level for a $15 minimum wage; during his campaign, Biden called for an increase to a $15 minimum wage by 2026. Another likely outcome is an increase in enforcement and compliance actions against employers for wage-and-hour violations, alongside enhanced penalties.

In a follow-up to the first piece of legislation enacted by the Obama-Biden administration (the Lilly Ledbetter Fair Pay Act), Biden will also prioritize ending paycheck discrimination, evidenced by his strong support of the Paycheck Fairness Act, which would amend federal equal-pay laws to require “a bona fide factor other than sex, such as education, training, or experience” in awarding different pay to men or women doing the same or similar work; protect workers from retaliation for discussing wages; and ban the use of salary history in the hiring process.

As an aside, Biden also supports federal legislation that would provide 12 weeks of paid leave for employees for their own or a family member’s serious health condition.

 

Small Businesses

Biden plans to restructure the existing Paycheck Protection Program by adding oversight and an approval guarantee for eligible businesses with 50 or fewer employees. The plan also calls for measures to increase small-business access to capital through an initiative called the Small Business Opportunity Fund.

 

Immigration

The president-elect has proposed a 180-degree turn from the current administration’s policies when it comes to immigration. The Biden plan would call for easing legal immigration into the U.S., including a pathway to citizenship for the large number of immigrants in the U.S. who lack legal permanent status, as well as some of those currently working illegally. Biden also proposes eliminating country-based caps on immigration and increasing the number of employment-based visas awarded each year, such as the H-1B, although those may come with stricter regulation.

 

Workplace Discrimination and Harassment

Biden supports the federal Pregnant Workers Fairness Act (PWFA), which was passed by the House in September, but has yet to be approved by the Senate. Under the PWFA, employers would be required to reasonably accommodate pregnant workers and employees with pregnancy-related conditions and would prohibit them from (1) requiring a qualified employee to accept an accommodation other than any reasonable accommodation arrived at through the interactive process; (2) denying employment opportunities to a qualified employee for the known limitations related to the pregnancy, childbirth, or related medical conditions of a qualified employee; (3) requiring a qualified employee to take paid or unpaid leave if another reasonable accommodation can be provided; and (4) taking adverse action in terms, conditions, or privileges of employment against a qualified employee on account of the employee requesting or using a reasonable accommodation.

The Biden-Harris agenda also includes support of the BE HEARD (Bringing an End to Harassment by Enhancing Accountability and Rejecting Discrimination in the Workplace) Act, which would establish a national harassment-prevention task force and includes several mandates for covered employers, including mandatory non-discrimination training and limitations on the use of non-disclosure and non-disparagement clauses in settlement agreements.

 

Federal Agencies

Employers will likely see a return to the pro-labor days of the Obama administration’s National Labor Relations Board, which is the agency that enforces U.S. labor law in relation to collective bargaining and suspected unfair labor practices. President-elect Biden will take office and have the ability to shift the board to Democratic control within the first year of his taking office.

In addition, the administration has affirmed a strong support for the Protecting the Right to Organize (PRO) Act, a substantial piece of legislation that would provide sweeping reforms, including the imposition of substantial financial penalties on companies that violate labor laws. The Biden-Harris campaign page also promises to “go beyond the PRO Act by enacting legislation to impose even stiffer penalties on corporations and to hold company executives personally liable when they interfere with organizing efforts, including criminally liable when their interference is intentional.”

All in all, employers should be ready for much more employee-friendly changes over the course of the next four (or eight) years.

 

Andrew Adams is an attorney at the law firm Skoler, Abbott & Presser, P.C. in Springfield; (413) 737-4753; [email protected]