Private Plaintiffs Take Charge in Massachusetts Wage Theft Suits

Massachusetts businesses that improperly pay their workers’ wages are facing more and more private lawsuits, resulting in steeper penalties than they would face from enforcement by the attorney general, employment lawyers say.

Since the attorney general’s office can’t pursue the thousands of wage and hour complaints it receives each year—a number that has increased over the past decade—workers’ rights attorneys have stepped in to bridge part of that gap.

“It’s warfare out there,” said Barry Miller, a Seyfarth Shaw LLP partner who represents employers. Increasing enforcement through private litigation is creating “a much more punitive and pernicious environment for an employer” due to the state’s strict wage theft law awarding treble damages for violations, Miller said.

A lack of resources for the attorney general’s office also puts workers with smaller-scale claims in a bind.

Since litigators are often motivated by cases that will lead to large awards, lower wage workers “are dealing with a legal marketplace where it’s difficult to find a lawyer who is willing to take on their case on a contingency basis,” said Raven Moeslinger, a partner at Nicholas Ortiz PC, who represents workers. “A lot of folks don’t understand their rights. They need quality representation and oftentimes end up with no representation,” Moeslinger said.

Spike in Enforcement

Massachusetts workers who believe they haven’t been properly paid for issues including overtime, sick leave, and late paychecks are supposed to bring their claims to the attorney general’s office before filing a lawsuit against their employer.

The spike in private enforcement stems from a 2008 law charging courts with awarding workers treble damages for violations of state wage law, coupled with the ability to recover attorney’s fees and costs, said Diane Saunders, a shareholder at Ogletree Deakins, who represents employers.

“These cases are very attractive to the plaintiff’s class action bar,” Saunders said, noting the state’s “very quirky” laws with “very severe” penalties.

Complaints to the office’s Fair Labor Division have grown in the past decade from 4,100 in 2014 to 5,746 in 2022, according to publicly available annual reports. The yet-to-be-released report for 2023 is expected to show another increase, based off of preliminary data showing more than 6,700 filed complaints. Civil citations requiring employers to pay restitution have increased since at least 2016, according to data provided by the attorney general’s office.

“We strongly embrace the private bar taking these cases. We need it,” a member of the Fair Labor Division said. “We don’t have the resources to investigate every complaint. If we did, we would, but we don’t.”

The Fair Labor Division has 56 workers devoted to investigating and resolving complaints, and considers the team’s bandwidth, the egregiousness of the violation, and the vulnerability of an industry’s workers when deciding which cases it can take on. The office also instituted free in-person wage theft legal clinics to help connect workers with private attorneys and assist them with preparing complaints.

Public/Private Balance

Workers’ rights attorneys concur with the attorney general’s office that a balance of both public and private enforcement is needed to combat wage theft.

“Just like the Department of Labor can’t be everywhere in enforcing federal wage laws, the attorney general’s office can’t be everywhere in enforcing state laws,” said Shannon Liss-Riordan, a founding member of Lichten & Liss-Riordan PC, who represents workers.

State inquiries can be significantly easier on business than working with private lawyers since the treble damages provision does not apply, employment lawyers said.

“Most people do not have the means to undertake a prosecution, and the only cases that really get anywhere are the class action cases where lawyers can make a bundle,” said William Okerman, a workers’ rights advocate, who brought a case against his former employer over unpaid commissions.

Although Okerman was awarded more than $500,000 in damages, “if I had to do it over again, even with mandatory treble damages, I would very much prefer to have the state bring a criminal complaint and let the state handle it.” He said he had to spend nearly $400,000 in legal fees out of pocket to bring his case, which he was ultimately reimbursed for.

The attorney general’s office has “really wide latitude with regard to penalties,” and often considers an employer’s cooperation and intent in deciding on an appropriate penalty in publicly-brought cases, the Fair Labor Division member said.

Legislative Action

The Fair Labor Division member said the office has been grateful for budget increases the state legislature has implemented in recent years that “allowed us to grow our ranks.”

The legislature, which is controlled by Democrats, is also considering notable legislation that would impact enforcement.

Bills introduced in both chambers last month would give businesses more time to pay a terminated employee their final wages and reduce some of the consequences of violating the law. Employers would have a 15-day grace period to make a final payment, rather than owing workers final wages on the day they were terminated. It would also allow businesses to avoid treble damages if they can show the violation was a mistake made in good faith.

“It’s really the most significant anti-worker statute or bill that has been proposed by any legislature in my 10 years of doing wage and hour law,” Moeslinger said. “It would gut the Wage Act, and it would encourage additional wage theft.”

Another bill that would give the attorney general more mechanisms to combat wage theft is also pending in the legislature. That bill would allow the attorney general to recover treble damages and issue stop work orders to businesses engaged in wage theft, as well as creating a mechanism for whistleblowers to pursue public enforcement.

“Wage theft has become business as usual in far too many industries in Massachusetts,” state AFL-CIO president Chrissy Lynch said in a statement. “The solution to this problem is updating and strengthening our laws to provide new tools in the toolbox to the AG as well as working people to combat wage theft and change this behavior.”