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Herman Law LLC » Massachusetts Appeals Court Holds that Mass Wage Act Applies to Remote Employees
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Massachusetts Appeals Court Holds that Mass Wage Act Applies to Remote Employees

Posted on Jun 21st, 2013

A Massachusetts Appeals Court ruled today that an employee’s private right of action under the Massachusetts Wage Act under G.L. c. 149, § 148 did apply in the case of a traveling salesman who rarely set foot in the Commonwealth of Massachusetts. This choice of law case basically states that where the Commonwealth has a close connection to the employment relationship of the parties, local law should be applied to the claim.

In this case the plaintiff worked as a salesperson Starbak, Inc., a Delaware corporation that had its a sole place of business in Massachusetts. He resided in Florida and conducted most of his sales activity across the country for Starbal. When Starbak closed its doors, it terminated his employment with significant commissions outstanding. The plaintiff then brought suit against the company’s chief executive officer, a Massachusetts resident, seeking unpaid sales commissions of more than $100,000, certain unreimbursed expenses, wages in lieu of accrued vacation time, treble damages, and attorney’s fees. The question here was whether Massachusetts law would apply given that the plaintiff rarely visited the state.

The Court found that the nature of the plaintiff’s work was such that only Massachusetts was tied to it. The employment agreement governing the work relationship provided that Massachusetts law would be applied in the event of a dispute. Starbak was located there and as a result customers who dealt with the plaintiff entered into business with the company in Massachusetts. The plaintiff’s business cards identified his contact information as the same as Starbak’s, based in Massachusetts. His paychecks were issued from Massachusetts, and he communicated with the company daily. The plaintiff was in fact required to return to Massachusetts several times each year, and when he did return he would generally work in the same office space each time.

While distinguishing a case cited by the defendant where the Wage Act was not applied to an Australian employee operating outside the United States, importantly, the Court did acknowledge that the application of the Wage Act may be different in the case on a non-US employee.

This case should caution businesses that employ workers from a distance. While it does not seem to indicate that all remote employees will always be able to access remedies afforded by the local law of the businesses they work for, this is certainly something for businesses to consider when drafting employment agreements and establishing relationships with remote workers.

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