Newsletter - Fall 2009

This newsletter is designed to keep you up-to-date with changes in the law. For help with these or any other legal issues, please call today. The information in this newsletter is intended solely for your information. It does not constitute legal advice, and it should not be relied on without a discussion of your specific situation with an attorney.

 

The MBTA offered a job to a man who wears a hearing aid, conditioned on his ability to pass a physical examination.

During the exam, he wasn’t allowed to wear his hearing aid, and he flunked.

The man sued, claiming he was discriminated against because of his disability. Five years later, the MBTA settled the case by hiring the man and giving him five years of retroactive seniority.

However, the union objected. It said the MBTA violated its collective bargaining agreement by giving five years of seniority to someone who hadn’t worked there for five years. This would mean that the newly-hired man would have more seniority than a fellow employee who had put in four years of service.

Who was right? The state Supreme Judicial Court sided with the MBTA. It said retroactive seniority is a standard remedy in discrimination cases, and the public policy behind the discrimination laws trumps the public policy behind the collective bargaining laws.

Interestingly, although the MBTA agreed to settle the case, it never admitted that it violated the discrimination laws, but the court said that didn’t matter in this case.

A nursing home supervisor took the home’s chef out for drinks after work one night in order to discuss work-related issues. The two had a fair amount to drink. The chef left the restaurant in his car and shortly afterward struck a 70-year-old pedestrian, who suffered serious injuries.

drunk-drivingThe pedestrian sued the nursing home, claiming that it was responsible for the chef’s drinking.

But the state Appeals Court shot down the lawsuit in a 2-1 decision.

Under Massachusetts law, a social host can sometimes be held responsible if a guest drinks and then drives. But the court said this is true only if the host controls the supply of alcohol, which wasn’t the case here.

The pedestrian argued that the nursing home controlled the employee, and the employee wouldn’t have gone drinking if it wasn’t expected of him by his boss.

But the court said there was a difference between controlling the liquor supply and controlling the person consuming it.

laid-offAn employee who was laid off from his job is entitled to be paid for any earned but unused vacation time, according to the state Supreme Judicial Court.

A longtime employee was laid off by Electronic Data Systems, and didn’t receive any vacation pay even though he had only used one day of vacation all year, and the company had a written policy saying that employees were entitled to a certain amount of vacation time based on how long they had worked for the company.

EDS also had another policy that said if an employee was laid off, he or she forfeited any unused vacation time.

But the court said this policy violated the state Wage Act, which requires that laid-off employees be given any pay they have earned up until their last day of work.

Because EDS gave its employees paid time off, payment for the time off is part of an employee’s wages, and it must be paid when the employee leaves.

Two important things to note:

  • The law doesn’t require companies to provide paid vacation. But if they do, they have to pay departing employees the vacation pay they have earned.
  • A company can require employees to use up their vacation days by a certain date or else forfeit them. However, the company must give employees a fair chance to use them; it can’t simply require employees to forfeit them if it lays them off.

social_networking The popularity of Twitter, Facebook, and other social networking sites has created a can of worms in divorce: These sites often contain evidence of a person's whereabouts, 'friends,' employment status and other information that can be used as evidence against them.

People often forget that the pictures they post and the things they write about on these sites are public information.

Anyone going through a divorce should be cautious about their actions online, especially on social networking sites. The same is true for people who have been through a divorce but whose ex-spouse might still want evidence against them with regard to continuing alimony and support payments, child custody issues, etc.

Here are some of the types of evidence that can be found on these sites:

  • Adultery. Spouses will have a hard time denying that they're having an affair if there are photos on their Facebook page showing them cavorting with a new boyfriend or girlfriend in a hot tub. Facebook wall messages can also be incriminating.
  • Finances. Some people claim that they're not able to make significant alimony or support payments because their job prospects are poor, but their profile on LinkedIn might suggest the complete opposite. In addition, some spouses hide assets during divorce proceedings, but evidence of those assets might turn up online.
    In one recent case, a spouse tried to avoid paying alimony by claiming he had no job prospects after being laid off, but he was caught when his Twitter messages clearly showed that he was about to be hired.
  • Child custody. Social networking pages can contain information that casts doubt on a spouse's claim that he or she is an ideal parent. This includes things a spouse has done, places they've been, attitudes and frustrations they've expressed, and people and influences to which a child has been exposed.
    For example, a parent who has agreed not to take a child out-of-state might post photos of a visit to Disney or some other vacation destination with the child, thus proving that the parent violated the agreement.
    In one case, a father denied that he used drugs, but the background of his MySpace page featured marijuana leaves.
  • Threats. One divorcing spouse was able to present evidence in court that the other spouse sent a threatening message in a "friend request."

 

Suppose a Massachusetts employee signs a non-compete agreement, but then leaves to work for a competitor in California – a state that generally doesn’t approve of non-compete agreements.

Can the agreement still be enforced against him?

Yes, according to a recent decision by the Massachusetts Superior Court.

The employee was a vice president at the EMC computer company in Hopkinton, Mass. After 20 years with EMC, he quit to become vice president at Hewlett-Packard in California.

The employee had signed an agreement saying that if he left, he wouldn’t work for a competitor for a year.

In court, he claimed the agreement wasn’t valid because it violated the law of California.

But the Superior Court said that while that might be true, the agreement was still valid in Massachusetts, and Massachusetts law applied. So the employee was out of luck.

This decision isn’t binding in all cases in Massachusetts, but it’s the first ruling on the issue in the state, and other judges might well follow it.

 

bankruptciesThe number of bankruptcy cases filed in Massachusetts increased by 18% in the last year, and by a stunning 72% over the past two years.

The vast majority of the cases are personal bankruptcies as opposed to business bankruptcies. While some businesses are going under, the spike in cases is largely the result of people losing their jobs in the recession.

Other common causes of bankruptcy include divorce, sudden large medical bills, and an inability to meet rising mortgage payments.

Personal bankruptcies can be filed under Chapter 7 or Chapter 13. Under Chapter 7, the debtor’s assets are liquidated, creditors receive some percentage of what they’re owed, and the debtor gets to start over. Under Chapter 13, the debtor’s assets aren’t liquidated, but the debtor agrees to a payment plan under which creditors will be paid off over a period of time.

The last two years have seen many more Chapter 7 bankruptcies – they’re up 100% over that period – and a relative drop in Chapter 13 cases. In the past, many people filed under Chapter 13 in an effort to save their homes from foreclosure, but a growing number of debtors are finding that their homes can’t be saved and Chapter 7 offers a better option.

 

Here’s a common scenario: Both parties to a real estate deal are ready to close, but for some reason the seller can’t move out by the closing date. Maybe the seller is moving to a new home or place of business, and the new place isn’t quite ready yet. Maybe the closing date is the last day of the month, a notoriously difficult day on which to hire a moving company.

transferOne solution is to go ahead with the closing, but have the buyer rent the property back to the seller for a short period to give him or her time to move out.

Is this a good idea? It can be … but it involves many more complexities than most people realize. At a minimum, you should have a written rental agreement that covers the most important issues.

For instance, you’ll want to consider:

  • Rent. Typically, the buyer will charge the seller rent for the holdover period. But what’s a fair rent? If the buyer has a mortgage, one convenient way to determine rent is to figure out the buyer’s monthly payment for principal, interest, taxes and insurance. Divide that amount by 30 (to get the daily prorated amount), then multiply by the number of days the seller is staying.
  • Rental period. How long is the seller allowed to stay? Is there a fixed move-out date? If the seller is able to move out more quickly than anticipated, can he or she do so and reduce the amount of rent owed?
  • Security deposit. Many buyers will insist on a security deposit in case the seller damages something. An agreement should cover whether the security deposit is held in escrow or given to the buyer at closing, how the deposit will be applied, and how the remaining money will revert to the seller.
  • Utilities. Who will pay for utilities while the seller is staying in the property?
  • Buyer’s rights. Does the buyer have the right to enter the property during the rental period? Many buyers will want access to take measurements or have other planned work done.
  • Insurance. The buyer might want to insist that the seller keep his or her property insurance policy in place while the seller is staying there. This might protect the buyer, but it’s not clear. If something goes wrong, the seller’s insurance company might deny a claim on the grounds that the seller no longer owned the property. On the other hand, sellers will want to keep an insurance policy in place at least insofar as it covers their personal property, which won’t be covered by the buyer’s insurance.