Bennett & Belfort P.C.
The B&B Docket Blog
Developments in the Dynamic World
of Business and Employment Law

Archive for the ‘Business’ Category

Terminating Employee to Avoid Hefty Commission Amounts to a $1 Million Mistake

Posted on: February 20th, 2020 by admin

Francoise Parker marketed energy services for EnerNOC, Inc., for which she was paid a base salary and commissions. The Massachusetts Supreme Judicial Court has held that EnerNOC’s decision to withhold more nearly $350,000 in commissions because Ms. Parker was no longer employed by the Company subjected the Company to treble damages. In short, EnerNOC could not evade the Massachusetts Wage Act by terminating Ms. Parker to avoid paying her commissions.

In 2016, Ms. Parker negotiated a contract for EnerNOC that was the largest in the company’s history, worth more than $20 million.

Under EnerNOC’s commission policy, Ms. Parker was entitled to a commission to be paid on the first year value of the contract. Additionally, under EnerNOC’s “true-up” policy, an additional commission payment would be made based on the full value of the contract, if neither side opted out of the contract at the one-year mark. EnerNOC’s written policy made commissions contingent on an employee’s employment, regardless of the reason for an employee’s separation.

After EnerNOC secured its lucrative contract, Ms. Parker complained to management because the company failed to pay her full commission on the one-year guaranteed portion of the contract. EnerNOC then terminated her employment.

Because she was no longer its employee, EnerNOC also declined to pay Ms. Parker the “true up” portion of her commission a year later, even though neither side opted out of the contract and it was locked in for four additional years.  That “true up” commission payment was worth nearly $350,000.

At trial, the Jury found that the company failed to pay $25,000 in commissions that were owed to Ms. Parker as of her termination date, as well as the $350,000 in “true up” commissions that she would have received if EnerNOC had not unlawfully fired her.  Under the Massachusetts Wage Act, prevailing plaintiffs are entitled to collect treble (three times) the amount of any unpaid wages.  The trial judge awarded Ms. Parker three times the pre-termination commissions, but he did not award multiple damages on the “true up” commissions because they were not actually “due and payable” when she was terminated.

According to the Supreme Judicial Court, that decision was wrong.  The SJC held that commissions are “wages” under the Wage Act and should be trebled, even if they become due after the employee’s termination, when the employer’s decision to fire the employee is itself a violation of the Wage Act.  In Ms. Parker’s case, the Jury had found that EnerNOC fired her as retaliation for her complaint about unfair pay and to avoid having to pay her the “true up” commission.

The SJC also ruled that continued employment can be a valid contingency to be eligible for commissions but that “such a contingency cannot be relied upon by an employer to create circumstances under which the contingency goes unfulfilled in order to deny a commission that otherwise would be due and payable to an employee.”  Since EnerNOC’s motivation for firing Ms. Parker was to keep her from collecting this commission, it could not hide behind a requirement that individuals must be active employees in order to receive commissions.

In Ms. Parker’s case, the SJC ruled that she was entitled to three times the amount of the “true up” commission – over $1 million.  This decision clarifies the scope of employers’ potential liability for retaliating against employees who complain about their pay, since future commissions that would become due and payable but for the retaliation are subject to automatic trebling.

Belfort Serves as Panelist at the MCLE’s 22nd Annual Law Conference

Posted on: December 23rd, 2019 by admin

On December 6, 2019, Bennett & Belfort, P.C. partner, David E. Belfort served as a panel presenter on the topic of “Jury Verdicts: the Big, the Bad and the Ugly; How to Get Them and How to Avoid Them” at the 22nd Annual MCLE Employment Law Conference.  Attorney Belfort, along with three other distinguished panelists, engaged in a dialogue highlighting strategies for achieving and defending against large damage awards.  The panel addressed the pre-trial matters such as how to approach motions in limine, preparing for final pretrial conferences and engaging in jury selection and voir dire.  Mr. Belfort spoke on the effective presentation of evidence at trial, his use of technology in the courtroom and the effective use of trial experts (economic, medical and human resources).

Bennett & Belfort Obtains Jury Verdict on Behalf of Commercial Landlord

Posted on: January 3rd, 2019 by admin

On September 13, 2018, after three days of trial and almost five hours of deliberations, a Suffolk County jury found that Bennett & Belfort’s client, Michael Caruccio, Trustee of the Caruccio Family Trust, had proven by a preponderance of the evidence that the defendant, Alves’ Boston TKD, LLC, breached the terms of their commercial lease agreement.  The jury also found that Plaintiff had proven that defendant, Manuel Jorge Alves, may be held personally liable for the contract breach committed by his company, Alves’ Boston TKD, LLC under a “piercing the corporate veil” theory.

 

The jury awarded the Plaintiff $87,765.05 in compensatory damages (the entire amount owed under the lease) plus $40,975.28 in attorney’s fees and costs, for a total judgment in the amount of $128,740.33.

 

Mr. Caruccio was represented at trial by Attorney Craig D. Levey.

 

Mr. Caruccio filed a complaint against his former tenant for unpaid rent stemming from occupancy at 7 Michael’s Mall, Winthrop, Massachusetts between 2005 and June 2013.  Plaintiff’s complaint included counts for: (1) Breach of Contract; (2) Quantum Meruit/Unjust Enrichment; (3) Promissory Estoppel; and (4) Piercing the Corporate Veil.

 

The jury’s finding that Plaintiff had successfully proven a case for “piercing the corporate veil” is incredibly rare.  The jury found that Bennett & Belfort, on behalf of the Plaintiff, had presented sufficient evidence at trial to disregard the corporate form of the defendant LLC to reach the assets of the individual defendant.  In particular, evidence was presented at trial that Mr. Alves had pervasive control of the LLC, intermingled personal and business assets, the LLC was thinly capitalized, observed almost no corporate formalities, and there was an absence of corporate records.

 

Partner, Eric LeBlanc, quoted in Massachusetts Lawyers Weekly Article Regarding an Employee’s Successful Post-Termination Claim of Workplace Retaliation

Posted on: January 11th, 2018 by admin

wwa_eric-117x150Massachusetts Lawyers Weekly sought commentary from Bennett & Belfort partner, Eric LeBlanc, in its article on a recent U.S. Bankruptcy Court decision concerning a contract worker’s claim against her former employer’s Chapter 11 bankruptcy estate for severance pay.  (“At-will worker can seek severance against bankruptcy estate: Company’s failure to offer benefits deemed retaliatory,” Mass. Lawyers Weekly, December 21, 2017.)  Dr. Christine Briggs, while an at-will employee of Genesys Research Institute, Inc., was one of a number of workers who filed whistleblower complaints against the company for alleged misuse of restricted funds.  Although an employer is not required to offer severance pay when laying off an at-will employee, Dr. Briggs discovered that when Genesys terminated at-will employees in a series of layoffs prior to filing for bankruptcy, it had systematically offered severance to those who had not lodged whistleblower complaints but failed to offer severance to those who had made complaints.  In the case, In Re: Genesys Research Institute, Inc., Justice Joan Feeney concluded that the employer’s conduct was retaliatory, and thus Dr. Briggs, although an at-will employee, was entitled to claim severance pay.

Attorney LeBlanc remarked that the Judge’s decision is significant because the court sustained a claim concerning an employer’s retaliatory conduct that occurred after the employee’s termination.  “There are mitigating factors in this case because it was a bankruptcy decision with a different burden-shifting, and the trustee made limited attempts to refute the claim,” Attorney LeBlanc told Lawyers Weekly. “But it could still be applicable in assisting plaintiffs in getting over an initial hurdle regarding a potential retaliatory action that occurs post-termination… Put more simply, you can use post-termination employer behavior to potentially prove either discrimination or retaliatory animus.”

From a common-sense, layperson’s perspective, it goes without saying that retaliation and discrimination by any person or entity against another can post-date the technical termination of the relationship between perpetrator and victim.  The case law in this regard is, however, a work in progress.

BENNETT AND BELFORT, P.C. PARTNER, TODD BENNETT, QUOTED IN THE BOSTON BUSINESS JOURNAL

Posted on: December 8th, 2017 by admin


tb-124x150Bennett and Belfort, P.C. partner, Todd Bennett, was quoted in the November 29, 2017 Boston Business Journal article entitled, “Biotech’s #MeToo Moment.” https://www.bizjournals.com/boston/news/2017/11/29/biotech-s-metoo-moment-lawyers-say-bias-harassment.html.  The article is about the recent uptick in claims of sexual harassment and gender discrimination being brought by female employees in the biotech industry.  Attorney Bennett stated that in his experience, there remains an “inaccurate stereotype among leadership, which is predominantly male, that women lack the scientific acumen to either perform the necessary functions of their jobs or to be promoted to a leadership role,” which is oftentimes used as a “pretext for the failure to promote or hire.”

In light of the current publicity concerning widespread sexual harassment by prominent and powerful figures in the entertainment and media industries, we believe that more and more women are realizing not only that it is permissible and personally empowering to  speak out when subjected to sexual harassment and discrimination at their jobs, but that these complaints may very well give others the courage to come forward and may prevent future employees from suffering the severe emotional distress caused by such unacceptable and unlawful behavior.

The Defend Trade Secrets Act Creates New Employer Disclosure Requirements and Whistleblower Rights

Posted on: June 29th, 2016 by admin

Photo_vaultUnder the Defend Trade Secrets Act of 2016 (“DTSA”),  trade secret misappropriation is now an issue of federal law.  This federal statute takes a field which was once nearly the exclusive domain of state law and adds a number of significant new rights for entrepreneurs seeking to preserve the secrets of their success – and for whistleblowing employees who report trade secret theft to the government.

DTSA Prohibitions And New Remedies.  The DTSA broadly prohibits the misappropriation of trade secrets – a term which includes sensitive financial, business, scientific or technical information.  The owner of the information must take reasonable steps to keep it secret and its secrecy must provide independent economic value to the owner.  State laws are not preempted by the DTSA, so the particular nuances of Massachusetts law regulating trade secrets Mass. Gen. Laws Ann. ch. 93, § 42 and Mass. Gen. Laws Ann. ch. 93A, §§ 1 to 11 still apply.  The DTSA creates an additional federal cause of action which may be in filed in federal court.  Not only does the DTSA allow the victim of trade secret misappropriation recovery of double damages and attorney fees, but in some exigent circumstances the law provides for a procedure to secure court ordered seizure of trade secret data in order to avert irreparable harm and preserve a matter for judicial review.

Employer’s Notice Requirement Under The DTSA.  The DTSA requires employers give employees, independent contractors and consultants notice of their qualified right to disclose trade secrets when done as a whistleblower reporting other violations of law.  Employers are obligated to give such notice “in any contract or agreement with an employee that governs the use of a trade secret or other confidential information,” – an obligation which likely calls for updates to employment contracts, confidentiality agreements, and many employment policy handbooks.  Failure to make this disclosure bars an employer from collecting exemplary damages or attorney’s fees under the DTSA from an employee who steals trade secrets – and may in itself be the basis for a violation of the DTSA.

Whistleblower Rights Under the DTSA.  The DTSA protects whistleblowers who confidentially disclose trade secrets to a federal, state or local government official where such disclosure is solely for the purpose of reporting or investigating a suspected violation of law.  Under the DTSA, qualifying whistleblowers are immune from civil or criminal liability under both federal and state trade secret law.  Furthermore, an employer may not retaliate against an individual for reporting suspected violations of the DTSA.  If an employer retaliates against an employee who is a legitimate DTSA whistleblower, it faces civil liability to the employee for its unlawful employment actions.

The attorneys at Bennett & Belfort, P.C. are pleased to advise you relative to the implementation of the new trade secret rules which protect businesses and whistleblowers.  Should you have any questions on this or any other trade secret legislation, please feel free to contact Bennett & Belfort P.C.

BENNETT & BELFORT WELCOMES ATTORNEY CRAIG LEVEY TO FIRM

Posted on: June 13th, 2016 by admin

 

 

Levey Craig (2)

Bennett & Belfort, P.C. is pleased to announce that Attorney Craig Levey has joined the firm.  Mr. Levey focuses his practice on employment and business matters, representing both individuals and companies.  He litigates claims of discrimination, sexual harassment, retaliation, and wage & hour disputes, as well as partnership and fiduciary duty issues.  Mr. Levey also drafts, reviews, and negotiates non-competition, non-solicitation, and severance agreements, and routinely counsels companies on all facets of the employer-employee relationship, including the drafting and implementation of company policies, procedures, and employee handbooks.

Mr. Levey has experience in a wide variety of cases in Federal, Superior, and District courts, and before administrative tribunals, including the Massachusetts Commission Against Discrimination, Department of Unemployment Assistance, and the Division of Administrative Law Appeals.

Commenting on the move, Mr. Levey said, “Bennett & Belfort offers a creative and collaborative environment to work, which is the perfect platform for me to grow my practice.  I am excited to join such a strong and determined team of attorneys, and I look forward to continuing the firm’s tradition of delivering top-notch service to its clients.”

Mr. Levey is a former associate attorney at Looney & Grossman, LLP and Davis, Malm & D’Agostine, P.C. in Boston.

Attorneys Belfort and Amundson Present at Hobart and William Smith Colleges Networking Event

Posted on: June 26th, 2015 by admin

HWS Dave & SarahOn June 17, 2015, Bennett & Belfort partner, David E. Belfort and associate, Sarah E. Amundson, co-lectured a presentation entitled “Employment Law:  Primer and Pitfalls” for their alma mater Hobart and William Smith Colleges‘ Professional Networking Group. The discussion constituted a broad introduction to Massachusetts employment law and covered topics such as at-will employment, employee privacy, and the Wage Act.  The event was held at the offices of Moors & Cabot at 200 Devonshire Street, Boston. 

HWS

Belfort Speaks on Employment Issues at Seminar for Attorneys Starting Law Firms

Posted on: June 3rd, 2015 by admin

MBA

Bennett & Belfort, P.C. partner David E. Belfort served as invited faculty for the May 29, 2015 Massachusetts Bar Association legal education conference How to Start and Run a Successful Solo or Small Firm Practice.  Mr. Belfort focused his presentation on practical employment law tips for those forming new law firms.  He discussed employment law basics in the context of Massachusetts law governing personnel management, employment policies (including sexual harassment and privacy), hiring, firing and traps for the unwary.

TODD BENNETT CO-PRESENTS AT MASSACHUSETTS BAR ASSOCIATION LEGAL LUNCH SERIES ON TAKING AND DEFENDING DEPOSITIONS

Posted on: February 2nd, 2015 by admin

Deposition Up CloseOn Wednesday, January 21, 2015,  Partner, Todd J. Bennett, joined colleague Scott Heidorn of Bergstresser & Pollock P.C., to speak about taking and defending depositions for the Massachusetts Bar Association’s “Feed Your Mind: Legal Lunch Series.”  The monthly lunch series, hosted by the Massachusetts Bar Association’s Civil Litigation Section and Young Lawyers Division, provides civil litigators of all experience levels with an opportunity to discuss selected areas of law and exchange ideas in a collegial setting.  Attorney Bennett and Attorney Heidorn co-led a lively, informative conversation on such topics as the rules on taking and defending depositions; how to prepare deposition questions;  the proper ways to put forth objections and respond to improper objections from opposing counsel; and the merits of different styles of questioning.