Workforce Bulletin

In a win for businesses, the Massachusetts Supreme Judicial Court (“SJC”) has ruled that individuals in true franchisor-franchisee relationships are independent contractors. In Patel v. 7-Eleven, Inc., the SJC found that defendant franchisor 7-Eleven, Inc. (“7-Eleven”) did not misclassify certain franchisees in violation of the Commonwealth’s independent contractor statute, M.G.L. c. 149, § 148B, which presumptively considers an individual “performing any service” for a putative employer to be an employee of said putative employer, rather than an independent contractor, unless: (1) the individual is free from control and direction in connection with the performance of the service; (2) the service is performed outside the usual course of the business of the employer; and (3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature at that involved in the service performed.

In a long saga to determine whether 7-Eleven properly classified certain franchisees as independent contractors, the United States Court of Appeals for the First Circuit (“First Circuit”) certified two questions to the SJC. On the first question back in 2022, the SJC ruled that where a franchisee is an “individual performing any service” for a franchisor, the independent contractor statute applies to the relationship between the franchisor and the franchisee. The decision here involved a second question that the First Circuit certified to the SJC related to the threshold determination of the independent contractor statute:

Do the plaintiffs perform any service for 7-Eleven within the meaning of the independent contractor statute, where, as here, they perform various contractual obligations under the Franchise Agreement and 7-Eleven receives a percentage of the franchise’s gross profits?

The Commodity Futures Trading Commission (“CFTC”) has now joined the Securities and Exchange Commission (“SEC”) in taking a stand against broad non-disclosure provisions in employment agreements. Last week, the CFTC announced a settlement with Trafigura Trading LLC, in which the company agreed to pay a $55 million penalty, in part because it required employees to sign agreements that impeded voluntary communications with the CFTC.

The Fourth Circuit recently reaffirmed that not all forms of opposition constitute protected activity. In Bills v. WVNH EMP, LLC, the Fourth Circuit unanimously affirmed the Southern District of West Virginia’s Order granting Defendants WVNH EMP, LLC, and Lanette Kuhnash’s (“Defendants”) motion for summary judgment on plaintiff Dorothy Bills’ (“Bills”) wrongful termination action under the West Virginia Human Rights Act (“WVHRA”). The sole issue was whether Bills engaged in protected activity under the WVHRA when she opposed sexual harassment by hitting a patient to stop him from groping her. Both courts agreed that Bills’ conduct was not protected by the WVHRA.

The U.S. Court of Appeals for the Eleventh Circuit recently weighed in on the circuit-splitting debate over the proper causation standard for Family and Medical Leave Act (“FMLA”) retaliation claims. In a win for employers, the Eleventh Circuit held that the proper standard is the heightened “but-for” causation standard, rather than the “motivating factor” causation standard, leading it to affirm the district court’s grant of summary judgment in favor of defendant Walgreen Co. (“Walgreens”) against plaintiff Doris Lapham (“Lapham”) on her FMLA ...

On November 7, 2023, the United States Court of Appeals for the First Circuit affirmed the United States District Court for the District of Massachusetts’ dismissal of a teacher’s suit against her former employer, Austin Preparatory School (“Austin Prep”), in which she claimed the school fired her for requesting extended leave as an accommodation following multiple surgeries. In Der Sarkisian v. Austin Preparatory School, the First Circuit held that Nancy Der Sarkisian’s request for extended leave, with no end date, was unreasonable considering the circumstances ...

On November 14, 2023, the Securities and Exchange Commission (“SEC”) announced its enforcement results for fiscal year 2023, boasting increases in enforcement and financial remedies across all of its programs. The SEC filed a staggering 784 enforcement actions, obtained orders for nearly $5 billion in financial remedies, and distributed nearly $1 billion to harmed investors.

The SEC’s most notable results, however, came from its Whistleblower Program: In fiscal year 2023, the SEC issued whistleblower awards totaling nearly $600 million, the most ever awarded in one ...

Less than two weeks after it last penalized a private employer for alleged violations of whistleblower protection rules in its employee separation agreements, the Securities and Exchange Commission (“SEC”) once again takes aim at the language of a separation agreement it alleges violates Rule 21F-17(a) of the Exchange Act (“Rule 21F”). Just yesterday, the SEC issued an Order settling charges with a commercial real estate services and investment firm for such violations through a fine of $375,000, among other terms. The SEC’s aggressive and continued ...

The Securities and Exchange Commission (“SEC”) continues to aggressively enforce its whistleblower program under the Biden Administration. As we have reported (here and here), the SEC has cracked down on employers’ agreements and procedures that it contends interfere with employee access to the SEC. Most recently, on September 8, 2023, the SEC issued an Order imposing a $225,000 penalty to a private energy and technology company, Monolith Resources LLC (“Monolith”), for allegedly violating whistleblower protection rules in its employee separation ...

It’s that time of year again—the Massachusetts Department of Family and Medical Leave (DFML) has rolled out new Paid Family and Medical Leave (PFML) workplace posters, workplace notification forms, and rate sheets for all employers in the Commonwealth. These updated resources provide the DFML’s yearly updates to eligibility requirements, maximum wage replacement benefit amounts, and contribution amounts. Employers take note that the following changes take effect on January 1, 2023:

1. Minimum earnings eligibility: PFML will cover most employees who have earned at least ...

[UPDATE: On December 7, 2022, President Biden signed the Speak Out Act (the “Act”) into law. This bipartisan legislation, passed by the U.S. Senate on September 29, 2022 and by the House of Representatives on November 16, 2022, limits the enforceability of pre–dispute nondisclosure and nondisparagement clauses relating to sexual assault and sexual harassment claims.]

On November 16, 2022, the U.S. House of Representatives passed the Speak Out Act (the “Act”), which President Biden is expected to sign into law. The bipartisan legislation, passed by the Senate on September 29, 2022, limits the enforceability of pre-dispute nondisclosure and nondisparagement clauses relating to sexual assault and sexual harassment claims.

Employers take note: the Massachusetts Supreme Judicial Court (“SJC”) ruled this week for an employee seeking treble damages for untimely paid wages under the Massachusetts Wage Act (“Wage Act”), even though the employer had corrected its mistake and paid the wages before the employee filed suit. Writing for the majority in Reuter v. City of Methuen, Justice Scott L. Kafker interpreted the “strict time-defined payment policies” and liquidated damages provisions under the Wage Act to find that the employer was responsible for treble the amount of late wages, and not treble the amount of interest, even though the wages were ultimately paid before the complaint was filed. This underscores the importance of paying all wages, including vacation or PTO in a timely fashion.

Last week, the Supreme Judicial Court of Massachusetts (“SJC”) unanimously ruled that the state Personnel Records Law, M.G.L. c. 149, § 52C, provides for a public policy exception to employment at will. Writing on behalf of the full panel in Meehan v. Medical Information Technology, Inc., SJC-13117 (Dec. 17, 2021), Justice Kafker held that an employer cannot terminate an at-will employee for exercising his statutory right to file a rebuttal for inclusion in his personnel file, as doing so would constitute wrongful discharge in violation of public policy. This decision ...

Last week, a divided Massachusetts Supreme Judicial Court (“SJC”) in Osborne-Trussell v. Children’s Hospital Corp. ruled in favor of a broad interpretation of the 2014 Domestic Violence and Abuse Leave Act (“DVLA”), a law that provides certain employment protections for victims of domestic violence, including a prohibition against retaliation for seeking or using protected leave. Specifically, the DVLA prohibits an employer from taking adverse action against, or otherwise discriminating against, an employee who exercises rights under the DVLA, such as taking ...