LAW PASSED: A new Massachusetts labor or wage law will create treble (triple) damages against companies in wage and hour violation cases. This departs from federal courts and other states where an employer can raise a “good faith” defense and avoid treble damages.
Massachusetts Lawyers Weekly reports,
“Previously, under a 2005 Supreme Judicial Court decision, treble damages were available only in cases in which the court concluded that an employer had willfully and intentionally committed an infraction.”
“…the [Massachusetts] Legislature passed a bill on April 15 that makes Massachusetts the first state in the country to impose automatic treble damages against any business that violates wage and hour laws.”
EMPLOYEE BENEFIT: From a Massachusetts employee's perspective, this new labor law provides an incentive for employees and their lawyers to pursue claims. A $10,000 claim is now a $30,000 claim, plus attorneys’ fees. Apply this multiplier to multiple claimants and the numbers can add up quickly.
UNION ORGANIZING BENEFIT: Labor unions should celebrate this law’s enactment. From their perspective, this law will provide an additional tool for protecting employees’ wages.
Additionally, it may become a useful tool for union organizers who come across wage claim violations in non-unionized companies. Organizers can educate employees of their rights; motivate an employee to pursue a claim; and then use the cost and risk of litigation as a bargaining chip against a target company. I’ve seen this work with success in past organizing campaigns involving National Labor Relations Board (NLRB) complaints. With even higher stakes involved in Massachusetts wage cases now, I wouldn't be surprised to see this organizing strategy emerge on every union organizer’s radar soon.
DEFENSE STRATEGY: Nevertheless, the new threat of triple damages and attorneys fees in Massachusetts alone will likely impact the manner in which these cases are defended against. Defending these cases will require a reasonable assessment of the facts as well as the potential liabilities created by the new law. As in many areas of law, prevention still works best.
WAGE POLICIES AND PROCEDURES: With higher liability exposure in Massachusetts, companies doing business here would be well served to review their procedures on wage issues, as well as their dispute resolution practices and procedures best suited for these and other disputes. It makes sense for companies of any size to establish a relationship with a lawyer who can respond to an issue when it arises, or even better, before.
LIVING WAGES & FAIRNESS: A recent Massachusetts AFL-CIO Weekly Labor Reader dated Friday April 18, 2008, quoted past U.S. President Franklin Delano Roosevelt.
"No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level - I mean the wages of decent living."
Every person is entitled to the pay they earn as an employee. At the same time, good employers who are trying to do right by their employees and are providing a living wage also deserve protection, especially in this tough economy.
Full disclosure, I had attended and graduated from the AFL-CIO Organizing Institute before organizing for several unions around the nation. My experiences there and elsewhere helped guide me in deciding to attend law school. I now represent both employers and employees.
