The Massachusetts Wage Act provides that employees who are improperly paid, may report the violation to the Attorney General’s office and subsequently receive the right to sue their employer. Under the Wage Act, employees who win their suit are entitled to mandatory treble damages and attorney’s fees. Additionally, Wage Act claims must be brought within three years of the employee not being paid properly.
A recent case decision by the Supreme Judicial Court has found that the Wage Act is not the exclusive remedy for employees claiming wages were incorrectly paid. In Lipsitt v. Plaud, the president of a museum hired a director in 2004. They agreed in writing that the director would receive a salary of approximately $4,000 per month. Due to financial difficulties, the director was never fully paid, however, he continued to work in part because of the president’s continued representations that the arrears owed him would eventually be paid.
When the museum folded in 2007, there were still outstanding wages owed to the director. The director filed a complaint with the Attorney General’s office in September 2008, he was issued a right to sue letter in April 2010, and he filed suit in Superior Court in September 2010. His complaint alleged not only violations under the Wage Act, but also, among others, a claim for breach of contract. The Superior Court dismissed his breach of contract claim, finding that the Wage Act was the exclusive remedy for recovery of unpaid wages under Massachusetts law.
However, the Supreme Judicial Court reversed finding there is no express or implied intention within the Wage Act that it provide the exclusive remedy for employees seeking unpaid wages. The court further found that the common law breach of contract claim was wholly independent from the Wage Act. The court noted that while most employees are best served by the mandatory treble damages and attorney’s fees under the Wage Act, a claim for breach of contract allows an employee to collect unpaid wages up to six years past. Thus this decision opens the door for additional wage related claims to be brought outside the 3-year window under the Wage Act.
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