Massachusetts Lawyer Blog

The Massachusetts Supreme Judicial Court (SJC) recently ruled (slip opinion) on an MA employment discrimination case involving a general arbitration clause. The contract between the employee and employer stated,

Arbitration. Any claim, controversy or dispute arising out of or in connection with this Agreement or its negotiations shall be settled by arbitration. ...

The plaintiff/employee (the former chief of anesthesiology at Beth Israel Deaconess Medical Center, Inc.), filed an action in Superior Court alleging gender-based discrimination and retaliation (and other related claims.) The defendants/employers (Beth Isreal Deaconess Medical Center and others) tried to compel arbitration arguing the employment agreement mandated arbitration. The SJC disagreed and held the contract's arbitration provision did not apply to the employee's employment discrimination claims,

an employment contract containing an agreement by the employee to limit or waive any of the rights or remedies conferred by c. 151B [discrimination] is enforceable only if such an agreement is stated in clear and unmistakable terms. ....

parties to an employment contract are free to agree on arbitration of statutory discrimination claims, and the presumption of arbitrability is in effect. However, parties seeking to provide for arbitration of statutory discrimination claims must, at a minimum, state clearly and specifically that such claims are covered by the contract's arbitration clause.

In this instance, general language won't work, but specific language will. The decision creates a bit of a challenge for anyone relying on existing arbitration clauses. Which claims are included in a general agreement to arbitrate and which aren't? On the employer side, look for a new addendum to employment contracts. One that lists (with specificity) any and all types of cases that can be arbitrated. The dissent by Justice Cowin states,

We can only wonder what type of claims will be singled out next for such treatment.

Technorati Tags: Federal Arbitration Act, Massachusetts Arbitration Act, Anti-Discrimination Law, Arbitration, Employment. Contract, Arbitration, Employment, Discrimination, Civil, Interlocutory appeal, Public Policy

Sarah Randag, recently posted on the ABA Journal a labor and employment law post, LinkedIn Reviews Can Come Back to Haunt Employers, Lawyers Say, which opens with,

Management-side employment lawyers are advising their clients against writing recommendations for current or recent employees on LinkedIn.

The same argument could be made on Facebook, Twitter, or any other social media web site.  Does your company have a social media policy? If so, are you tracking or keeping a record of what is being said, if anything, about your employees by their managers on the web? Do you prefer to not know? When workplace disputes arise, do you see if anything has been brought up or mentioned on the web. If so, and you discover something online, are you dealing with it in a way that could lead to litigation down the road? On a related issue, if an employee complains to you about another employee's postings on the web, are you prepared to respond? With changes in communication methods and technology's quickening pace come new and constant challenges to consider when employment issues arise.

Technorati Tags: employment, law, LinkedIn, review, handbook

Modification of a MA child support order was recently discussed in the Massachusetts Appeals Court case, Kenneth R. Whelan vs. Kathleen A. Whelan. One of the issues discussed in this case involved self-employment income as it relates to MA child support obligations. In a footnote, Note (17), the court writes:

(17) New Child Support Guidelines became effective in Massachusetts on January 1, 2009. The new Guidelines define income as "gross income from whatever source regardless of whether that income is recognized by the Internal Revenue Code or reported to the Internal Revenue Service or State Department of Revenue or other taxing authority." Guidelines I-A (2009). With respect to income from self-employment, the new Guidelines provide that "[i]n general, income and expenses from self- employment or operation of a business should be carefully reviewed to determine the appropriate level of gross income available to the parent to satisfy a child support obligation. In many cases this amount will differ from a determination of business income for tax purposes." Guidelines I-C (2009).

While the prior Child Support Guidelines, "do not specifically provide for deduction of business-related expenses from self-employment income[,]" the court indicated the new MA Child Support Guidelines "clarify" the approach MA courts have taken.

The 2006 Guidelines, in effect at the time of trial, do not specifically provide for deduction of business-related expenses from self-employment income. Indeed, these guidelines list in the definition of income from whatever source both "income from self-employment" as well as, by way of comparison, "net rental income." Guidelines I-A(1), (25) (2006). Nevertheless, we think it is implicit that such expenses may be deducted where they are reasonable and necessary for the production of income, and our decisional law supports this conclusion. See, e.g., Smith-Clarke v. Clarke, 44 Mass. App. Ct. 404, 406 (1998) (due to lack of substantiation and commingling of personal and business expenditures, judge properly could disregard certain claimed business deductions from husband's gross income or substitute a reasonable figure for others); Maillet v. Maillet, 64 Mass. App. Ct. 683, 689-690 (2005) (remand ordered where financial statement of husband, sole owner of business, set forth income of $800 per week, and "his corporation in 2002 had income of $227,744 exclusive of suspended losses and depreciation").

The court reasoned the test to be applied by a judge in determining income from self-employment is,

...whether claimed business deductions are reasonable and necessary to the production of income, without regard to whether those deductions may be claimed for Federal or State income tax purposes.

While the MA Child Support Guidelines help bring a degree of certainty to Massachusetts child support orders, this case shows the numbers one uses in the child support formula may not necessarily be the same as income reported on tax forms or found in business reports. In self-employment and investment income cases, it's important to be able to articulate what income and expenses should be taken into consideration in determining the income which should be entered into the child support worksheet.

Technorati Tags: MA Divorce, Modification, Self-Employment, Income, Modification

Thank you to the Patriot Ledger and Reporter Julie Onufrak for covering my Privacy Law and Policy Blog in today's business section, Weymouth lawyer blogging about the Internet and privacy. It was a pleasure to meet Julie and we had an interesting discussion on the future of media, blogs, newspapers, as well as privacy issues.