Fraelick v. Perkettpr, Inc.

• Decision Date: 06 June 2013
• Docket Number: No. 11–P–1832.,11–P–1832.
• Citation: 83 Mass.App.Ct. 698,989 N.E.2d 517
• Court: Appeals Court of Massachusetts
• Parties: Heather FRAELICK v. PERKETTPR, INC., & another.

83 Mass.App.Ct. 698

989 N.E.2d 517

Heather FRAELICK

v.PERKETTPR, INC., & another.¹

No. 11–P–1832.

Appeals Court of Massachusetts,

Essex.

Argued June 4, 2012.

Decided June 6, 2013.

Joseph L. Sulman for the plaintiff.

William J. Royal, Jr., Wellesley, for the defendants.

Present: KATZMANN, BROWN, & SULLIVAN, JJ.

BROWN, J.

Just days after an at-will employee reiterated her displeasure to her employer at having long been denied a part of her compensation, she was fired.

A complaint, filed by the aggrieved employee (plaintiff), set out a series of interlinked facts, sufficiently detailed, which, when read together, suggested the corporate employer and its president had violated § 148A of the Massachusetts Wage Act, G.L. c. 149, §§ 148 et seq. (Wage Act), by terminating the plaintiff's employment in retaliation for her speaking out to senior management about the employer's failure to pay timely the sums due under her employment contract. In addition to the Wage Act claim, the plaintiff also sought compensatory relief, on common-law liability theories, and declaratory relief (see G.L. c. 231A), from a written noncompete agreement that she had signed, at the behest of the employer, as a condition of employment. Contesting the legal viability of the complaint, the defendants jointly filed a Mass.R.Civ.P. 12(b)(6), 365 Mass. 754 (1974), motion. A judge of the Superior Court allowed the motion and dismissed the complaint in its entirety.

On appeal from the dismissal of her complaint by the judge, the plaintiff argues that her complaint alleges plausible entitlements to relief against PerkettPR, Inc. (PPR), and Christine Perkett, PPR's president (collectively, the defendants).² We conclude, for the reasons set forth herein, that the motion to dismiss was improvidently allowed.

A rule 12(b)(6) motion may be allowed only when the complaint's factual allegations (and reasonable inferences therefrom), accepted as true, do not plausibly suggest an entitlement to relief. See Iannacchino v. Ford Motor Co., 451 Mass. 623, 635–636, 888 N.E.2d 879 (2008); Curtis v. Herb Chambers I–95, Inc., 458 Mass. 674, 676, 940 N.E.2d 413 (2011). “Factual allegations must be enough to raise a right to relief above the speculative level ... [based] on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Iannacchino v. Ford Motor Co., supra at 636, 888 N.E.2d 879, quoting from Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Assertions set out in a motion to dismiss are not part of the rule 12(b)(6) review equation. Eigerman v. Putnam Invs., Inc., 450 Mass. 281, 285 n. 6, 877 N.E.2d 1258 (2007). Romano v. Sacknoff, 4 Mass.App.Ct. 862, 863, 357 N.E.2d 781 (1976).

We conclude, for the reasons set forth herein, that the complaint plausibly suggested an entitlement to remedial relief for violation of § 148A of the Wage Act, and declaratory relief as to a written noncompete agreement, which allegedly was unreasonably burdensome as to restrain unduly her right to secure gainful employment in her field of expertise (public relations). Claims for tortious interference and misrepresentation also were plausibly stated.

A. Background. 1. Complaint. The complaint alleges the following: PPR, a private corporation doing business in this Commonwealth, hired the plaintiff, Heather Fraelick, as a full-time senior account executive, on written terms and conditions, which PPR had offered and which Fraelick, in turn, accepted in June, 2007. PPR holds itself out as a “virtual” public relations firm, since it neither owns nor rents commercial space, a business model that PPR purportedly promotes as a benefit to its clients insofar as lower overhead costs are said to yield lower client fees. PPR required Fraelick to work at home as well as pay a wide variety of business-related overhead costs out of her own pocket before being reimbursed by PPR.

Specifically, memorialized by a written offer letter, PPR promised Fraelick an annual base salary of $60,000, plus other compensation and the benefit of the company's “paid expenses program.” The agreed-to offer letter (or “contract” ³ such as it is alleged) expressly stated the employment was “on an at-will basis.”

The company's paid expenses program called for PPR to reimburse fully an eligible employee, like Fraelick, for the business overhead costs incurred by her in performing her job, including but not limited to: telephone service fees,⁴ laptop computer, basic office supplies, postage fees, and expenses associated with business travel undertaken on behalf of PPR.⁵ Based on its written offer, Fraelick believed the expense program was a component of her agreed-to compensation package.

In December, 2009, PPR ceased to hold to its side of the bargain, by failing to compensate or reimburse Fraelick for costs that she had incurred in the course of her employment. On a number of occasions, throughout 2010, Fraelick took up this compensation issue with PPR's president, Christine Perkett, who at all times acknowledged the debt owed and unequivocally promised to pay all outstanding expenses as soon as possible.

Allegedly, in November, 2010, PPR paid Fraelick for some portion of the business expenses she had incurred some twelve months prior (in December, 2009). However, as late as December 31, 2010, PPR had not repaid Fraelick for overhead expenses that she paid, on behalf of PPR, throughout calendar year 2010, in the regular course of performing her job and attending to PPR client matters. This was of considerable concern to Fraelick, and particularly so in January, 2011, when a PPR client asked that she attend an upcoming meeting or event in Atlanta, Georgia.

On February 3, 2011, Fraelick, once again, raised the matter of her unpaid expenses, directly with Perkett. The matter was weighing on Fraelick, both financially and otherwise. Some portion of her costs allegedly extended as far back as 2009. Fraelick expressed concerns that, due to financial hardship, she was then presently unable to travel to Georgia, or meet with other out-of-town clients, until PPR paid her what was due and owing.

Two days later, on February 5, PPR delivered a check to Fraelick for the monies owed—some $3,000, more or less—and, on February 8, PPR fired Fraelick, citing her “unwillingness” to continue paying for the firm's business expenses associated with her traveling to meet with PPR's clients, without receiving timely reimbursement. Contemporaneously with the termination of Fraelick's employment, PPR and Perkett directed a letter to Fraelick advising of the latter's “continuing” contractual obligations under the noncompetition agreement, including its unqualified ban on soliciting (or attempting to solicit) PPR's existing or prospective clients, for a period of one year from her separation from the company. PPR has clients nationwide and it seeks out business opportunities world-wide. Fraelick took seriously the implied threat of PPR to seek enforcement of its noncompete agreement, and the prospect of substantial costs in defending against such a claim. Fraelick claims to have suffered damages, including loss of future wages and benefits, and compensable emotional harm. This account is, essentially, the sum and substance of the factual allegations contained in the plaintiff's complaint, allegations we accept as true and from which we draw every reasonable inference in her favor.

2. Motion to dismiss. The plaintiff caused each defendant to be duly served and commenced an action in the Superior Court. Pursuant to rule 12(b)(6), the defendants moved to dismiss the complaint, arguing (among other contentions) that the plaintiff's allegations “do not rise to colorable claims on any of this scattershoteight (8) count complaint.” After a hearing, the judge allowed the defendants' motion, ruling: “[1] business expenses are not covered under the Massachusetts Wage Act” and [2] “plaintiff's claims fail to satisfy pleading standards set out under Iannacchino v. Ford Motor Co., 451 Mass. 623, 888 N.E.2d 879 (2008).”

B. The Wage Act. It is common ground that the Wage Act, G.L. c. 149, §§ 148 et seq., lies at the heart of this case. It is useful to identify provisions of this long-standing statutory scheme, arguably implicated here, so as to frame the plaintiff's factual statement, in light of the well-settled public policies advanced by this comprehensive law.

1. Payment of wages.Section 148 of the Wage Act (§ 148) commands “[e]very” employer to pay an employee “the wages earned” by the employee at regular intervals and within a set number of days after “the termination of the pay period during which the wages were earned.” § 148, first par., as amended through St. 1992, c. 133, § 502. See Boston Police Patrolmen's Assn.v. Boston, 435 Mass. 718, 720, 761 N.E.2d 479 (2002), citing American Mut. Liab. Ins. Co. v. Commissioner of Labor & Indus., 340 Mass. 144, 147, 163 N.E.2d 19 (1959). The Wage Act does not define “wages” other than to provide they “shall include any holiday or vacation payments due an employee under an oral or written agreement.” § 148, first par., inserted by St. 1966, c. 319. ⁶ Nor is “earn” defined, but it is commonly understood to mean “[t]o acquire by labor, service, or performance.” Awuah v. Coverall N. America, Inc., 460 Mass. 484, 492, 952 N.E.2d 890 (2011), quoting from Black's Law Dictionary 584 (9th ed. 2009).

For purposes of construing the Wage Act, when an employee has “completed the labor, service, or performance required of him [or her],” it necessarily follows that he or she has “earned” his or her due “wage.” Awuah v. Coverall N. America, Inc., supra.

2. No exemption by means of a special contract.Section 148of the Wage Act further provides, in relevant part: “No person shall by a special contract with an employee or by any other means exempt himself from this section.” § 148, sixth par., as appearing in St.1956, c. 259. The...