The Massachusetts Wage Act allows for employees to sue their employer for unpaid wages, as well as the president, treasurer, and those with substantial control over the entity. M.G.L ch. 149 § 148. Employees often do so, especially in situations where they suspect the entity may not have the resources to satisfy a judgment or when their employer has gone out of business. The Massachusetts Supreme Court, in Lynch v. Crawford, recently analyzed how this works with a non-profit, issuing meaningful protections for those who serve in that capacity. You can read the full opinion here.

ARE MEMBERS OF MASSACHUSETTS NONPROFITS LIABLE FOR VIOLATIONS OF THE MASSACHUSETTS WAGE ACT?

Three former employees filed suit against their former employer, the Roxbury Comprehensive Community Health Center, Inc., and its president Keith D. Crawford. Crawford argued that he was immune from suit by operation of the Federal Volunteer Protection Act (42 U.S.C. § 14503(a)) and the Massachusetts charitable immunity statute (M.G.L. ch. 231 § 85W).

Before analyzing whether immunity applied in this context, the Court identified important policy goals that would be furthered if immunity was extended, noting that “the willingness of volunteers to offer their services is deterred by the potential for liability actions against them," and that, "as a result, many nonprofit public and private organizations and governmental entities . . . have been adversely affected by the withdrawal of volunteers from boards” and that "due to high liability costs and unwarranted litigation costs, volunteers and nonprofit organizations face higher costs in purchasing insurance . . . to cover their activities."

The Massachusetts Supreme Judicial agreed with the legal argument, holding that individuals serving as volunteers of a nonprofit charitable organization shall not be liable for any civil damages as a result of any act or omission related to that service unless the acts or omissions were intentionally designed to harm or were grossly negligent. According to the Court, extending immunity under these circumstances was necessary in order to accomplish the important policy objectives identified above.

As to whether Crawford was grossly negligent, the Court wasn’t so sure, pointing to two instances that suggest Crawford may have lost his right to immunity by acting with gross negligence: (1) Crawford knew Roxbury Comprehensive Community Health Center was out of money, yet encourage the employees to continue working and assured them that payment was forthcoming and (2) choosing to use available funds to pay vendors, rather than the employees. The Court then sent the case back to the trial level to determine whether Crawford acted with gross negligence sufficient to lose his right to immunity.

Employment attorney Benjamin Steffans has represented numerous employees across Massachusetts in unpaid wage disputes. If you think you are owed wages schedule your free phone consultation today.