Crocker v. Townsend Oil Co.
| Decision Date | 17 December 2012 |
| Docket Number | SJC-11059 |
| Parties | Charles Edward CROCKER & another v. TOWNSEND OIL COMPANY, INCORPORATED, & others. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
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Massachusetts Wage Act. Practice, Civil, Statute of limitations. Limitations, Statute of. Employment, Severance agreement. Contract, Employment, Release from liability. Release.
CIVIL ACTION commenced in the Superior Court Department on December 18, 2009.
The case was heard by Howard J. Whitehead, J., on a motion for summary judgment; a motion to vacate entry of summary judgment was heard by David A. Lowy, J., motions to amend the complaint and for summary judgment were heard by Howard J. Whitehead, J., and the matter was reported by Timothy Q. Feeley, J., to the Appeals Court.
The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.
Valeriano Diviacchi for the plaintiffs.
Kurt B. Fliegauf for the defendants.
Present: Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, & Lenk, JJ.
In this case, we consider an employment dispute arising under G.L. c. 149, §§ 148 and 150 (Wage Act), between the defendant, Townsend Oil Company, Incorporated (Townsend), a home heating oil company, and the plaintiffs, Charles Edward Crocker (Crocker) and Joseph Barrasso (Barrasso), two former delivery truck drivers. The plaintiffs contend that they are owed compensation (including overtime pay) based on their proper classification as "employees" (rather than independent contractors) under the Wage Act. Townsend responds that the plaintiffs' claims are barred by the statute of limitations and, alternatively, that a general release contained in contract termination agreements entered into by the parties nevertheless defeats the plaintiffs' Wage Act claims. A Superior Court judge stayed the proceedings and reported the statute of limitations and general release issues that had previously been the subject of rulings in that court to the Appeals Court pursuant to Mass. R. Civ. P. 64, as amended, 423 Mass. 1410 (1996). We transferred the case to this court on our own motion.
We conclude that the statute of limitations applicable to the Wage Act claims does not bar the plaintiffs from recovering compensation earned for the hours they worked, including the overtime hours they worked but for which they were not paid, only during the three years preceding the filing of suit. Because the claims are not completely barred, we also reach the more substantive question, whether a general release contained in a termination agreement operates to release an employee's Wage Act claims. In light of the important public policy considerations underlying the Wage Act, we conclude that although claims arising thereunder may be released retrospectively as part of a settlement agreement, 3 such a release is valid only if it is voluntary and knowing, and, more specifically, absent express language that Wage Act claims are being released, a general release is ineffective to waive them.
1. Background. Townsend is a Massachusetts corporation in the business of delivering home heating oil to customers throughout northeastern Massachusetts. It employs drivers to operate the company's delivery trucks; these drivers are paid by the hour and receive overtime pay when applicable. In addition, Townsend also hires independent contractors to work as delivery drivers. These drivers are paid based on the amount of oil they deliver to customers and do not receive an hourly wage or overtime pay from Townsend. The independent contractors are required to purchase and maintain their own delivery trucks at their own expense, but those trucks must bear Townsend's insignia. All drivers, whether employees or independent contractors, deliver oil to Townsend customers according to Townsend's delivery schedule and at prices set by Townsend.
The plaintiffs were putatively hired by Townsend as independent contractor delivery drivers. Crocker was hired in 1999; Barrasso was hired in 2002. The plaintiffs each signed a contract carrier agreement with Townsend that established the terms of their relationships. Those agreements essentially required the plaintiffs to work full time delivering oil for Townsend and also contained noncompete clauses preventing the plaintiffs from delivering oil for other companies. The agreements were later amended when Barrasso and Crocker each incorporated their respective delivery businesses; the new agreements were between Townsend and the plaintiffs' separate corporate identities rather than the plaintiffs in their individual capacities.
In January, 2007, Townsend sought to terminate Barrasso's agreement and the parties ultimately signed a contract carrier termination agreement that included reciprocal general releases of claims. 4 In April, 2007, Crocker signed a substantially identical termination agreement. The plaintiffs each received payments of several thousand dollars in exchange for signing the agreements. The plaintiffs both claim that at no point during negotiation or signing of the termination agreement were they aware that they might be considered employees entitled to Wage Act rights. 5
The plaintiffs filed their complaint on December 18, 2009, on learning of a similarly situated delivery truck driver who had recovered against Townsend under the Wage Act. See Amero vs. Townsend Oil Co., Essex Superior Court, No. ESCV2007-01080 (Dec. 3, 2008). The plaintiffs' counsel moved to withdraw shortly thereafter. During this same period, Townsend filed a motion for summary judgment that was allowed (summary judgment judge). The plaintiffs subsequently retained new counsel and moved to vacate the entry of summary judgment. A second judge allowed the motion to vacate, concluding that the language of the Wage Act barring special contracts from exempting employers from its requirements invalidated the general releases as they related to the plaintiffs' Wage Act claims. Thereafter, the plaintiffs moved to amend the complaint to assert new claims against Townsend for violations of the Americans with Disabilities Act (42 U.S.C. §§ 12131 et seq. [2006]). Townsend opposed the motion and filed a second motion for summary judgment arguing that the lawsuit was time barred. The motions were heard by the summary judgment judge, who denied the plaintiffs' motion to amend based on futility, but allowed in part Townsend's motion for summary judgment on the ground that any claim relating to conduct that occurred more than three years prior to the filing of the suit was time barred.
2. Discussion. The respective decisions that (1) the statute of limitations bars the plaintiffs' recovery except insofar as it relates to compensation earned (including compensation for overtime hours worked) but not paid during the three years preceding the filing of suit and (2) the general release failed to release the plaintiff's Wage Act claims due to the broad scope of § 148 are legal conclusions that we review de novo. See Ritter v. Massachusetts Cas. Ins. Co., 439 Mass. 214, 215 (2003).
a. Statute of limitations. Assuming that the plaintiffs were at all times operating as Townsend's employees, a matter not contested for purposes of the present appeal, we turn to the first of the two reported issues. Specifically, we consider whether the motion judge correctly concluded that the statute of limitations bars the plaintiffs' Wage Act claims except as they relate to compensation earned but not paid during the three years preceding the filing of the suit.
To answer this question, we must address three subissues: (1) whether an employee is entitled to maintain an action for unpaid overtime under the Wage Act (), rather than under the overtime provisions of G.L. c. 151, § 1A (6); (2) whether the statute of limitations was tolled by operation of the discovery rule or fraudulent concealment; and (3) whether, where there are Wage Act violations within the statute of limitations period, the plaintiffs can recover for Wage Act violations occurring outside the limitations period on a theory of continuing violation. We consider each issue in turn.
General Laws c. 151, § 1A, sets forth the statutory requirements for overtime pay, including the right of an employee to receive compensation at a rate not less than one and one-half times his regular rate for work in excess of forty hours per work week. 7 General Laws c. 151, § 20A, provides that a cause of action for the nonpayment of overtime (as required by § 1A) must be brought within two years of the date it accrues. The summary judgment judge, however, concluded that the plaintiffs could nevertheless recover for unpaid wages and overtime under the Wage Act, which requires employers to make timely payment of wages to employees and has a three-year statute of limitations. 8 Thus, his decision suggests that the plaintiffs may recover unpaid overtime under either G.L. c. 151, § 1A, or the Wage Act.
Townsend argues that allowing the plaintiffs to assert claims for unpaid overtime under the Wage Act has the practical effect of obviating the Legislature's determination that a shorter limitations period should apply for unpaid overtime claims under G.L. c. 151, § 1A. In support of this argument, Townsend cites Mogilevsky v. Bally Total Fitness Corp., 263 F.Supp.2d 164 (D.Mass.2003), in which a Federal...
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