E-Alerts

Treble Damages Are Not Mandatory For Massachusetts Wage Act Violations Occurring Prior To July 12, 2008

The Massachusetts Supreme Judicial Court (“SJC”) recently held that treble damages are not mandatory for violations of the Massachusetts Wage Act (“Wage Act”) that occurred prior to July 12, 2008, when the Wage Act was amended to make treble damages mandatory rather than discretionary.  This decision, Rosnov v. Molloy, provides important clarity to employers currently litigating Wage Act claims.

Under the Wage Act, prevailing plaintiffs “shall be awarded treble damages … for any lost wages and other benefits.”  The word “shall” indicates that treble damages are mandatory.  However, prior to July 12, 2008, awards of treble damages under the Wage Act were discretionary and were awarded only when a judge determined that an employer’s conduct was “outrageous, because of the [employer]’s evil motive or his reckless indifference to the rights of others.”  In Rosnov, the SJC clarified that the current mandatory “shall” standard does not apply retroactively to pending cases based on violations occurring before July 12, 2008.

Rosnov involved a Wage Act claim that arose prior to July 12, 2008.  The Superior Court ruled in favor of the plaintiff and, applying the current version of the Wage Act, ordered the employer to pay mandatory treble damages.  The employer appealed, arguing that the current “shall” standard for awarding treble damages under the Wage Act does not apply retroactively.

The SJC agreed with the employer.  The Court determined that the standard for awarding treble damages affects substantive rights and, as such, cannot be applied retroactively absent a finding that the legislature intended this result, which the Court determined was not the case.  Accordingly, for Wage Act violations that occurred prior to July 12, 2008, treble damages are available only if the plaintiff shows that the employer’s conduct was “outrageous” because of “evil motive” or “reckless indifference to the rights of others.”

All employers defending Wage Act claims based on alleged violations occurring prior to July 12, 2008, should become familiar with Rosnov, as this decision eliminates the possibility of mandatory treble damages.  Plaintiffs in such cases must prove “outrageous” conduct in order to obtain an award of multiple damages.  This should, among other things, bolster the employer’s settlement position in many cases, and perhaps diminish the plaintiffs’ appetite for continuing to pursue older claims.

If you have questions about Rosnov or wish to discuss its applicability to a pending case, please do not hesitate to contact one of the attorneys at Schwartz Hannum PC.