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Archive for October, 2012

Four Bennett & Belfort Attorneys Named 2012 Super Lawyers

Posted on: October 30th, 2012 by admin No Comments

Bennett & Belfort, P.C. is pleased to announce that four of our attorneys have been selected as 2012 “Super Lawyers,” in the categories of Business Litigation and Employment & Labor.   The designation is attained through high peer recognition, meeting ethical standards, and demonstrating achievement in the field.

Partner David E. Belfort was named a 2012 Super Lawyer in the “Employment Litigation” practice area for the seventh consecutive year.  For the second year in a row, partner Todd J. Bennett was named  Super Lawyer in the practice area of Business Litigation.

Michael L. Mason has been named a Rising Star in “Employment & Labor” for the fourth year in a row, and in the practice area of business litigation, Eric R. Leblanc has been named a Rising Star.

This achievement will be published in the New England Super Lawyers insert, included in this month’s “Boston Magazine,” and is on www.superlawyers.com.

Congratulations to these Bennett & Belfort, P.C. attorneys on their selection as “Super Lawyers” and “Rising Stars.”

 

SEVERANCE PAY: A BALANCING ACT

Posted on: October 30th, 2012 by admin No Comments

While some employers elect to offer separating employees some form of severance package, employees are not usually entitled to any severance payment, unless by pre-existing contract. 

The primary reasons that businesses offer severance packages to departing employees include to: 1) reward them for their services and tenure at the business; and/or 2) in order to obtain a waiver and general release of claims from the employee, and to ensure that the employee will not take legal action against the company in the future; and/or 3) to confirm that the employee agrees to continue to be bound by a restrictive covenant, such as a confidentiality provision, non-compete agreement or a non-solicitation agreement.

A severance agreement is a contract, which once properly executed is enforceable in Court.  Like any other contract, the terms of a severance proposal should be carefully reviewed with legal counsel and are often negotiated – sometimes between the parties and other times between lawyers.  Because the parties are agreeing to be bound to contractual terms and/or relinquishing certain rights, such agreements must be carefully considered during a period of transition for both the company and employee.

Some severance offers are simply an agreement to pay the separating employee either a lump sum of money or recurring payments over a period of weeks or months in exchange for a general release or waiver of claims.  Other severance offers are more comprehensive, and may selectively include some or many of the following terms:

Continued insurance coverage or other benefits (health insurance, dental, life, disability etc.);

  1. The extended vesting of employee stock options or profit sharing;
  2. A letter of recommendation or a non-disparagement agreement;
  3. A re-characterization of the employee’s departure as “voluntary”;
  4. An agreement by the employer not to contest unemployment benefits;
  5. An agreement by the employer to pay for the employee’s career counseling;
  6. Relocation expenses (if applicable); and
  7. Assurance from the company that it will narrow or not enforce a restrictive covenant, such as a non-competition agreement or a non-solicitation agreement.  

Employers will generally seek to include severance terms that bring closure to the matter.  Employer’s will invariably include terms that limit the likelihood of having to defend a lawsuit, avoid bad publicity or the dissemination of disparaging information,  while protecting intellectual property, including their valuable trade secrets.

From the employer’s perspective, it is agreeing to pay a certain sum of money that it is otherwise not necessarily legally obligated to pay, in consideration for a release of potential legal claims that the employee may otherwise pursue.  If there are strong claims or potential claims by an employee, the employer has and increased incentive to secure a release from the separating employee so that costly and prolonged litigation might be avoided.  On the other hand, employers are often concerned about setting a precedent of large payouts, particularly in this fragile economic climate where reckless spending can contribute to a company’s downfall. 

From the employee’s perspective, a comprehensive review of the proposed severance is crucial.  First and foremost, does the employee have strong legal claims against the employer, such as discrimination, breach of contract, or a wage violation (including overtime)?  If so, does the severance offer approach or exceed the potential value of such claims verses the costs of litigation?  It is important for employees to ensure that the non-monetary terms are balanced, reasonable and when at all possible, mutual. 

While employees are not legally entitled to severance packages, well negotiated and carefully drafted severance agreements can be of great benefit to both employers and employees.  As straightforward as some of the severance agreement issues might appear, there are many traps for the unwary with seemingly innocuous terms having ramifications well into the future for all parties. 

Bennett & Belfort, P.C. regularly drafts, reviews, negotiates and litigates severance agreements and related issues.

BENNETT & BELFORT ATTORNEY QUOTED IN TWO “MASSACHUSETTS LAWYERS WEEKLY” ARTICLES RELATIVE TO RECENT HIGH PROFILE EMPLOYMENT RETALIATION DECISIONS

Posted on: October 11th, 2012 by admin No Comments

Bennett & Belfort, P.C. partner, David E. Belfort, was recently asked to comment on two separate cases for “Massachusetts Lawyers Weekly” (‘MLW’). One of the cases related to the proof analysis applied to employment discrimination cases under the Federal Rehabilitation Act, and the other focused on a rare large jury verdict secured under the Massachusetts Payment of Wages statute’s retaliation provisions.

In the August 20, 2012 issue of MLW, Mr. Belfort was quoted in Lisa Keen and Thomas E. Egan’s front page article entitled, “ ‘But-for’ causation needed to prove retaliation claim”   The article related to the recent case of Palmquist v. Shinseki where the U.S. Circuit Court of Appeals found that the plaintiff, who claimed to be aggrieved under the retaliation provisions of the Rehabilitation Act of 1973, was not entitled to a “mixed-motive” instruction, which is applied when there is evidence of both legitimate and illegitimate reasons for an employer’s adverse employment action.  Instead, the court required a finding that the alleged retaliation be the “But-for or determinative cause of the employer’s action in order for a plaintiff to recover any damages.  Mr. Belfort commented that the Court’s declining to apply a mixed motive analysis in Rehabilitation Act retaliation cases renders the purpose underlying these discrimination protections excessively burdensome.  The core of the statute, he explained, is aimed at eradicating discrimination and retaliation for complaints of bias – this decision, albeit narrow, ignores evidence of bias and discriminatory motives if competing motivations for the job action exist. 

 Mr. Belfort’s assessment was also sought for the September 17, 2012 MLW article entitled, “Small Wage Act Retaliation Claim Results in Big Verdict,” relating to a Superior Court action filed against the Attleboro Housing Authority by an employee claiming retaliation under the Massachusetts Wage Act.   Attorney Belfort commented that “[h]ere, a dispute over $2,300 in unpaid wages turned into an award of more than $475,000.”  In Fernandez v. AHA (Bristol Superior Court), the jury found that the Employee’s complaints about not being paid just $2,300, or .50 cents an hour, led to his dismissal.  After triple damages, costs, interest and attorney’s fees, the judgment amounted to almost half a million dollars.  “From a policy perspective, Belfort said, the suit should underscore for employers the necessity to treat employees without regard to their wage complaints.”  This case is currently up on appeal.

These two articles highlight the fact that plaintiffs are increasingly relying on retaliation claims to secure remedies.  We will continue to monitor developing trends relative to retaliation cases so stay tuned.