G & M Employment Service, Inc. v. Com.

• Decision Date: 17 December 1970
• Citation: 265 N.E.2d 476,358 Mass. 430
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: G & M EMPLOYMENT SERVICE, INC., et al. v. COMMONWEALTH (and a companion case 1 ).

Page 476

265 N.E.2d 476

358 Mass. 430

G & M EMPLOYMENT SERVICE, INC., et al. v. COMMONWEALTH (and a companion case ¹).

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Oct. 9, 1970.

Decided Dec. 17, 1970.

Herbert Burstein Boston (Reuben Landau, Boston, with him) for plaintiffs.

Walter H. Mayo, III, Asst. Atty. Gen., for defendants.

Before SPALDING, CUTTER, KIRK, SPIEGEL, REARDON and QUIRICO, JJ.

CUTTER, Justice.

Five plaintiffs (the services), each of which conducts an employment agency, by two bills in equity, seek declaratory relief and contest the constitutionality of St.1967, c. 896 (the 1967 act), which amended the regulation of employment agencies found in G.L. c. 140, §§ 46A to 46R. One bill is brought against the Commonwealth. In the other bill the defendants are the Department of Labor and Industries (the department) and its commissioner (the commissioner).

The Commonwealth's demurrer to the bill against it was sustained. From that interlocutory decree and from a final decree dismissing that bill, the services appeal. Both defendants appeal from an interlocutory decree overruling the demurrer to the bill against the department and the commissioner.

On the bill against the department and the commissioner, a Superior Court judge, after hearing, adopted his voluntary findings as a report of material facts. The final decree declared, among other matters, (1) that, in various general respects (mentioned below), the 1967 act is constitutional, but (2) that the maximum rates prescribed by § 46L, as amended by the 1967 act, 'are unreasonable in that they deprive the * * * (services) and others in a similar position of * * * a fair rate on their property, and * * * are * * * confiscatory.' From the final decree, all the parties appealed. The evidence is reported.

THE STATUTES.

Private employment agencies were subjected to some regulation by St.1964, c. 670, § 1, which inserted §§ 46A to 46R in G.L. c. 140. These provisions were revised by St.1966, c. 729, but no maximum agency fees were then prescribed. By the 1967 act the regulatory provisions were again changed, particularly by including a schedule of maximum fees. ² References below are to the present from of the statute, the 1966 act as amended by the 1967 act and by the 1968 amendment mentioned in the next paragraph.

The commissioner is charged with administering these statutes. Section 46A (as amended by the 1967 act, and as again amended by St.1968, c. 412, § 1, which became effective after the commencement of these suits) exempts from the definition of 'employment agency' (1) firms (not engaged in furnishing domestic employees) whose fees are not paid directly or indirectly by any applicant for employment and (2) persons hiring individuals directly for the purpose of furnishing part-time or temporary help to others. ³

Section 46L (as amended by the 1967 act) prescribes maximum fees to be charged applicants for employment of various classifications and regulates the charging and collection of such fees in various respects. In general the maximum fees are expressed in percentages of salary or wages actually received by the employee for a relatively short period of service. It is explicitly stated that the portions of § 46L imposing maximum fees 'shall not apply to applicants * * * hired at an annual wage of over' $8,000, nor 'shall they apply to any agency which is paid solely by employer clients.'

1. The Commonwealth contends that the suit against it cannot be maintained because it has not consented to be sued in a controversy of this type. See Executive Air Serv. Inc. v. Division of Fisheries & Game, 342 Mass. 356, 173 N.E.2d 614, in which direct equitable relief was sought against the Commonwealth in an effort to try certain aspects of the title to land claimed by the Commonwealth. No constitutional claim appears there to have been asserted. Cf. Kenyon v. Chicopee, 320 Mass. 528, 532--536, 70 N.E.2d 241; P.B.I.C. INC. V. DISTRICT ATTY. OF SUFFOLK COUNTY, MASS., 258 N.E.2D 82^A.

The Commonwealth is not an indispensable party to the suit against the commissioner and the department, the enforcers of the statute. See G.L. c. 140, § 46R (which provides that the commissioner may institute proceedings based upon any violation). The Attorney General has appeared for them. See G.L. c. 231A, § 8; Pioneer Credit Corp. v. Commissioner of Banks, 349 Mass. 214, 221, fn. 3, 207 N.E.2d 51.

Similar bills for declaratory relief have been maintained with respect to other penal statutes. Hall-Omar Baking Co. v. Commissioner of Labor & Industries, 344 Mass. 695, 696, 184 N.E.2d 344. STURGIS V. ATTORNEY GEN., MASS., 260 N.E.2D 687.^B See Commissioner of Admn. v. Kelley, 350 Mass. 501, 506, 215 N.E.2d 653; Revere Housing Authority v. Commonwealth, 351 Mass. 180, 182, 218 N.E.2d 94. See also Sun Oil Co. v. Director of Div. on Necessaries of Life, 340 Mass. 235, 239, 163 N.E.2d 276; Demetropolos v. Commonwealth, 342 Mass. 658, 661, 175 N.E.2d 259 (where no question was raised by the Commonwealth about its joinder as a party and the issues, in any event, were adequately presented by other defendants); Commonwealth v. Baird, 355 Mass. 746, 755, 247 N.E.2d 574. In the light of these authorities, declaratory relief may be afforded against the enforcing officials, even if no specific intention to apply the allegedly unconstitutional statute to these plaintiffs has been asserted. Cf. Kelley v. Board of Registration in Optometry, 351 Mass. 187, 192, 218 N.E.2d 130 (suit not brought against official having power to regulate the plaintiffs' activities).

In the suit against the commissioner and the department, every issue presented in either suit can be decided. Accordingly, although urged to do so, we need not now decide whether the Executive Air Serv. Inc., case (342 Mass. 356, 173 N.E.2d 614) should be modified or limited to its precise facts. We thus do not modify the interlocutory decree sustaining the demurrer or the final decree in the case against the Commonwealth. In the other case, the demurrer was properly overruled.

2. The trial judge correctly rejected the services' contention that the statute is unconstitutional because too vague in various respects.

(a) Under c. 140, § 46O(a), it is provided that if the discharge of an applicant, within one month of entering upon his employment, 'is not for just cause, the employment agency shall on demand refund * * * that portion of the fee paid in excess of ten per cent of the gross wages paid to the applicant' (emphasis supplied.) The services suggest that the words 'not for just cause' are too vague to be enforced. Vague or overbroad statutes imposing criminal penalties cannot be applied validly in circumstances where there is substantial uncertainty concerning their meaning. See OPINION OF THE JUSTICES, MASS., 260 N.E.2D 740^C and cases cited. The standard of 'just cause,' however, in the context of a statute regulating employment agencies, would require determination (among other matters) whether there existed (1) a reasonable basis for employer dissatisfaction with a new employee, entertained in good faith, for reasons such as lack of capacity or diligence, failure to conform to usual standards of conduct, or other culpable or inappropriate behavior, or (2) grounds for discharge reasonably related, in the employer's honest judgment, to the needs of his business. Discharge for a 'just cause' is to be contrasted with discharge on unreasonable grounds or arbitrarily, capriciously, or in bad faith. Similar general statutory language has been sufficiently definite to administer fairly. See Davis v. School Committee of Somerville, 307 Mass. 354, 362, 30 N.E.2d 401; MacKenzie v. School Committee of Ipswich, 342 Mass. 612, 613, 616--620, 174 N.E.2d 657; School Committee of Salem v. Civil Serv. Commission, 348 Mass. 696, 698--699, 205 N.E.2d 707.

(b) Section 46O requires refunds 'by employment agencies' of fees paid to them in certain circumstances. Subsection (f) provides that any 'employer who * * * obtains applicants from an employment agency shall not * * * deduct any part of the fees paid to * * * (the) agency from the wages * * * of * * * employees placed by such * * * agency.' The services argue that the employment agencies cannot be subjected to penal provisions for failure to make refunds because of employer conduct of which the agencies may know nothing and for which they are not responsible. Subsection (f) does not in terms require any refund by an employment agency in the event of a violation of the subsection by an employer. Subsections (e) and (f), added to § 46O by the 1967 act more appropriately should have been placed in a separate section, as they do not in terms require refunds and have no apparent relation to the introductory sentence of § 46O. An employment agency wishing to avoid any complicity in such a violation by an employer, before providing an employer with applicants, may require the employer to undertake by contract to comply with subsec. (f).

(c) It is argued that portions of § 46L, e.g. subsecs. (C)(1)(b), (2), and (4) (c), may require that an employment agency enter into a written contract with each applicant and that the applicant also understand the contract. Section 46N requires explanation of the agency contract to the applicant and the execution of a statement by the applicant that he has 'thoroughly read * * * (his) contract with * * * (the agency) and accept(s) its terms.' The two sections are to be read together. We do not interpret the portions of § 46L just mentioned as requiring that an agency be certain that an applicant understands his contract. In any event, an agency may protect itself against allegations of failure to explain to applicants the terms of its contract with them by preserving proof of compliance with § 46N, with appropriate added written acknowledgments by the applicant of agency explanation of the contract to him.

(d) Under § 46N, in...