Employee Handbooks And Avoiding Contractual Obligations

A January, 2016 decision by the federal district court for the District of Massachusetts reiterates the importance of careful drafting and tailoring of employee handbooks and policies so as to avoid contractually binding obligations on management to their employees. Massachusetts law has long held that employee handbooks and policies may in some circumstances be interpreted as implied contracts and establishing binding obligations on the part of the employer to adhere to the policies and rights set forth therein. Such contractual obligations would impede upon employer’s general flexibility under the law in at-will employment relationships.

Key elements to avoid any such contractual requirements generally include:

• bold and consistent disclaimers asserting that the policy is not a contract of employment;
• avoid granting specific rights and remedies to particular scenarios, i.e., avoiding granting “due process” rights and/or mandatory progressive discipline procedures;
• make clear that the handbook is non-negotiable; and
• state that the policies are subject to change in the sole and exclusive discretion of management.

Under Massachusetts law, great caution must be used in drafting employment handbooks and policies. Please feel free to contact Finneran & Nicholson, P.C., if you have any questions in reviewing, updating and adopting employment handbooks and policies. Should you have any questions regarding these or other employment matters, please do not hesitate to contact us.

Please note that the written policies required for compliance with these regulations should be tailored and reviewed for the specific circumstances and practices of your business. Should you require assistance in meeting your compliance obligations under these regulations, please do not hesitate to contact us.

Health Club Contracts

By: Adam D. Page, Esq.

January 1, 2016 is quickly approaching, and with it, new members will be joining health clubs. Both members and health club owners need to be aware that Massachusetts law requires health club contracts to include certain terms and conditions, such as restrictions on the length of the contract, limitations on installment payments and certain cancellation rights. Health club owners, especially, need to be mindful that a failure to include such required terms and conditions may be considered an unfair and deceptive trade practice under Massachusetts law, possibly subjecting the health club owner to triple damages and an award of attorney’s fees to the member.

Adam D. Page is a business and corporate attorney with Finneran & Nicholson, P.C. He can be reached at (978) 462-1514.

Minimum Wage Changes in Massachusetts

As of January 1, 2015, the minimum wage for Massachusetts employees is $9.00 per hour (an increase from the prior rate of $8.00 per hour rate). The minimum wage law applies to all employees with certain statutory exemptions.

Effective January 1, 2016, the minimum wage increases to $10.00 per hour and the minimum service rate for service staff employees generally compensated by tips increases to $3.35 per hour (an increase from $3.00 per hour in 2015 ). The service rate generally applies to wait staff, service employees and service bartenders, who may be paid the service rate if they regularly receive tips of more than $20 a month, and if their average hourly tips, when added to the service rate, are equal to or exceed the basic minimum wage.

On a going forward basis, these rates increase gradually over the coming years, specifically:

Effective January 1, 2016:

• Minimum Wage increases to $10.00 per hour
• Service Rate increases to $3.35 per hour

Effective January 1, 2017:

• Minimum Wage increases to $11.00 per hour
• Service Rate increases to $3.75 per hour

Employers should prepare to update their payroll practices and posters in order to be in compliance with these changes.

Sick Leave Policies

Under Massachusetts law, all employees, including part-time and temporary employees, are be entitled to accrue earned sick leave, which an employee may use to address and tend to their own personal health conditions, or to tend to health concerns of their families (children, spouses, parents and/or in-laws), including attending routine medical care appointments. Earned sick leave may also be used by employees to address matters occasioned by domestic abuse situations.

Employees must be entitled to accrue a minimum of one hour of earned sick time for every 30 hours worked by the employee beginning upon the date of hire, up to at least 40 hours of earned sick time during each calendar year. While earned sick leave must begin accruing upon hiring, the employer may limit the employee’s ability to use the leave until after 90 days of employment. Employees may carry over up to 40 hours of earned sick leave into the next calendar year, but are not entitled to use more than 40 hours of earned sick leave in any given calendar year.

While all employers will need to offer sick leave to employees, employers of 11 or more must provide PAID earned sick leave to their employees. Employers have the option to provide more leave to employees than what is required in the proposed law. Employers offering existing paid time off or vacation time to employees are not required to provide more leave, so long as the policies meet the requirements of the act. Unlike vacation time, unused earned sick leave need not be paid to employees on termination of employment.

All employers must adopt sick leave policies and/or amend or review their existing vacation or paid time off policies to ensure compliance with this new law. In addition to adopting or updating existing policies to grant sick leave to employees, the new law has restrictions on retaliating against employees for the use of sick leave, the exercise of rights under the law, and sets forth standards for employers to require medical certification for use of the sick leave.

Finneran & Nicholson, P.C. Attorney Advises on Transfer of Cemetery

Adam D. Page, Esq., of Finneran & Nicholson, P.C., recently advised a privately held cemetery association in regards to the transfer of its cemetery property to the municipality where it is located, which involved obtaining approval from the Massachusetts Supreme Judicial Court. Prior to the transfer, Attorney Page represented the cemetery association in re-establishing itself in good standing with the Commonwealth of Massachusetts one hundred years after it had first been incorporated.

Finneran & Nicholson, P.C. Attorney Advises on Veterinary Hospital Acquisition

Adam D. Page, Esq., of Finneran & Nicholson, P.C., recently advised a large U.S. veterinary company, with operations located in various states in the Northeast, in regards to its successful acquisition of an emergency veterinary hospital located in New Hampshire.

What Should A Work Order/Proposal Contain?

By: Adam D. Page, Esq.

For many Businesses (especially those in the trades, such as plumbers, electricians and carpenters), a short, one page work order or proposal may be the only document that it has in writing with a customer. The question then arises – what should the work order or proposal say? How much “legalese” can be included without scaring away the customer? If issues come up, such as the customer refuses to pay the bill or there is damage to the customer’s property (whether it was the fault of the Business or not), then the work order or proposal may be the only document that provides certain legal protections for the Business.

At a minimum, the following are some provisions that a Business may want to include in its work order or proposal:

1. Description of Work – a clear description of, and the scope of, the work to be performed.

2. Cost of Job/Payment Terms – the pricing agreed upon by the parties, performance and payment schedule and finance charges. Also, the work order or proposal should include language that any change from the scope of work must be agreed in writing by the Business and the customer along with the additional cost.

3. Customer Fails To Pay – if the customer fails to pay, that should trigger the right of the Business to stop working and impose against the customer all expenses incurred by the Business, including reasonable legal fees, incurred by the Business in seeking payment from the customer.

4. Limitation of Liability – the liability of the Business should be limited only to damages solely caused through its gross negligence (not due to any defect in any part or equipment or any actions or inactions of the Business) and not exceed the payment amount received by the Business from the customer.

5. Acceptance/Signature – both the Business and the customer should sign the agreement.

Adam D. Page is a business attorney with Finneran & Nicholson, P.C. He can be reached at (978) 462-1514.

Business Owners and Employers Must Be Diligent in Enforcing Their Internal Confidentiality/Non-Disclosure Policies–Even With Independent Contractors.

The law in Massachusetts surrounding the enforceability of employee non-competition agreements and other employment-related agreements has evolved considerably over the last few years, and many of the changes, without proactive responsive action by employers/business owners, may not favor employers or offer much protection for their interests when an employment relationship sours.

Some common categories of confidential information employers/business owners desire to protect are client/customer lists, internal processes, manufacturing methods, intellectual property, technology use and configuration, strategic development plans, and financial and pricing data. To ensure confidential information is protected employers/business owners must be sure to have not only employees sign enforceable confidentiality/non-disclosure agreements, but also suppliers, vendors and other service providers to the business (e.g., independent contractors), as noted in a recent ruling from the Massachusetts Superior Court. In C.R.T.R., Inc. v. Lao, a Superior Court judge, in granting summary judgment for the defendant, ruled that the business owner could not sue a former independent contractor (non-employee) for misappropriation of trade secrets where the business owner (1) did not require the independent contractor to sign a confidentiality agreement at the outset of his association with the business owner, and (2) the business owner did not maintain adequate internal processes and controls to restrict access to and protect its confidential information. In the Lao case, the former business owner alleged that the independent contractor unlawful removed customer lists, accounting records and other forms of confidential company information.

Although the Lao case dealt with special circumstances surrounding an independent contractor, a key takeaway for employers/business owners from the Lao case is to recognize that adequate steps must be taken to ensure confidential and proprietary information is sufficiently protected and the employer’s/business owner’s rights are preserved in the event an employee or independent contractor violates confidentiality protocols or agreements. Employers/business owners should consider the implementation and observance of formalized internal policies and safeguards to sufficiently define confidential information and to make all employees or independent contractors aware of the restrictions on the use/disclosure of such information. Further, employers/business owners must be diligent in following their own internal policies to protect confidential information or risk a court siding with an employee’s argument that the employer waived the confidentiality of its own information by failing to treat such information in the appropriate manner.

SEC 2014 Examination Priorities Include Focus on New and Unexamined Advisers

By: Kelly Kneeshaw-Price, Esq.

In addition to investment adviser’s ongoing annual compliance reviews and procedures, including updates to written supervisory procedures (WSP) and Form ADV, RIAs and Chief Compliance Officers (CCO) should be aware of and prepared for recent focus areas announced by the Securities and Exchange Commission (SEC). Specifically, the SEC announced its examination priorities for 2014 for Registered Investment Advisers (RIAs).

Of particular note, the SEC indicates that it will focus attention on new and unexamined RIAs. Although not an exhaustive list, the market-wide examination priorities include:

• fraud detection and prevention
• corporate governance and enterprise risk management
• conflicts of interest
• technology controls (including business continuity / disaster recovery plan)
• dual registrants
• new rules and regulations
• retirement investments and rollovers
• risk-based strategies

Specific areas of concern related to examinations of RIAs include:

• safety of clients’ assets and custody
• conflicts of interest
• marketing and performance
• wrap fee programs
• quantitative trading models
• presence exams, focusing on marketing, portfolio management, conflicts of interest, safety of client assets and valuations.

Revised Form I-9 Released by the U.S. Customs and Immigration Services

By: Dennis Ford Eagan, Esq.

Employers are required, pursuant to federal law, to complete the Federal Government Form I-9 for all employees verifying that the company has obtained documents (i.e., U.S. Passport, or some combination of government issued driver’s license, Social Security card, certified copy of a birth certificate, etc.) with respect to identification and employment authorization. Upon completion, the Form I-9 must be maintained for the tenure of the person’s employment, and one year thereafter, but in any event no less than three (3) years.

Effective as of May 7, 2013, the U.S. Citizenship and Immigration Services (USCIS) now requires employers to use a new version of the Form I-9 going forward. The new Form I-9 must be completed, signed and dated by the employee by the first date of employment, but not before accepting an offer of employment. The employer must complete, sign and date the form by the employee’s fourth day of employment.

Employer’s must use the new Form I-9 for all new hires on or after May 7, 2013, and for re-verifying current employees whose work authorizations are expiring on or after May 7, 2013. Notably, employers need not replace current Form I-9 documents for existing employees who do not otherwise need re-verification to continue their employment. The new version of Form I-9 includes new fields for employee telephone numbers and email addresses. The new version of the Form has also been reformatted and is now two (2) pages in length. The updated Form I-9 is available online at www.uscis.gov. Failure to use the updated Form I-9 going forward may subject an employer to federal penalties.

Please note that the written policies required for compliance with these and other regulations should be tailored and reviewed for the specific circumstances and practices of your business.