The DH Benchmark: Spring 2008

Inside this Issue

Guilt by Association: An Employer’s Liability for Hiring an Employee with a Non-Compete Agreement

Can an employer incur liability for hiring someone who signed a Non-Compete/Non-Solicitation Agreement with an ex-employer? A recent Superior Court case says “yes.” In National Engineering Services Corp. v. Grogan (Mass. Superior Court, January 29, 2008), a recruiting and staffing firm specializing in engineering and computer personnel, successfully sued one of its ex-account manager/ sales persons, and the new company he went to work for which competed directly with NECS.

Former Employee Challenges Massachusetts Law Prohibiting Gender Discrimination Claims Against Businesses with Fewer than Six Employees

By Doulgas M. Marrano, Esq.

The Massachusetts Supreme Judicial Court (“SJC”) heard oral argument recently in a case challenging a former employee’s right to sue her old company for gender discrimination despite a prohibition on such claims against
businesses with fewer than six employees. The Defendant company offered the Plaintiff a job as a technology consultant in February 2005. The Plaintiff accepted the offer and began working for the Plaintiff on March 15, 2005. Less than a month later, the Plaintiff informed the Defendant that she was pregnant with a due date of June 27, 2005. The Plaintiff alleges that the president of the Defendant’s parent corporation was upset at the revelation of the Plaintiff ’s pregnancy and the day following the Plaintiff ’s revelation, asked her to take an unpaid leave of absence immediately. The Plaintiff further alleged the Defendant accused her of unethical behavior in not informing it of her pregnancy during her interviews and that the Defendant could not place the Plaintiff onsite with the Defendant’s clients during her pregnancy or maternity leave. The Defendant placed the Plaintiff on unpaid administrative leave eight days later. The Plaintiff did not return to work.

Privately-Held Companies and Section 404 of the Sarbanes-Oxley Act of 2002

By Travis M. Drouin, CPA, CIA,
Partner, Moody, Famiglietti & Andronico

It has been almost six years since the introduction of the Sarbanes-Oxley Act of 2002 (the “Act”), and it has been lauded, debated and lambasted in the news ever since. The Act created new industries and invigorated or shook up others. It has been both friend and foe to some, but one point that generally receives little argument is that the costs associated with the internal control provisions of Section 404 have amounted to more than anyone ever expected or intended.

The High Cost of Slacking Off : Ramifications for Breach of the Implied Covenant of Good Faith and Fair Dealing

Louis B. Mayer once quipped that an oral contract isn’t worth the paper it’s written on. Every written contract, however, imposes performance obligations recognized by law which may not necessarily appear in writing. These obligations arise pursuant to the implied covenant of good faith and fair dealing which informs every commercial contract governed by Massachusetts law. The American Law Institute’s Restatement of the Law of Contracts – long recognized by Massachusetts Appellate Courts – provides that “[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance [.]” See Restatement (Second) of Contracts § 205 (Copyright 1981 – 2008 by The American Law Institute).

A New Declaration of Independence — Doing It Right: The Revised Independent Contractor Law

By Cheryl A. Waterhouse, Esq.

“It is a riddle, wrapped in a mystery, inside an enigma [,]” Winston Churchill once remarked about the former Soviet Union. The phrase may just as easily apply to the new Massachusetts Independent Contractor Law – c. 149, s. 148B which purports to offer a clearer definition of “Employee” vs. “Independent Contractor.”

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