PERMIT ISSUE DATE AFFECTS ZONING STATUS
A town issued a special landfill permit but didn’t record it before a
zoning by-law amendment passed that prohibited landfills. The Appeals
Court reversed a Land Court ruling that this special landfill permit was
not a preexisting nonconforming use, because the special permit was
issued before the amendment. The relevant event occurred when the
special permit was issued and not when it was later recorded.
Why This Is Important . . . Despite a statute which provides
that a special permit be recorded in order to "take effect," the Court
ruled that the permit’s issuance alone qualifies it as a prior
nonconforming use.
NO FMLA LEAVE? NO SUIT
After an employee requested two months' leave to care for his wife and
children, he was fired. The employee was not covered by the Family and
Medical Leave Act (FMLA) because he had only been on the job for a few
months. He sued, arguing that even though he was not covered by FMLA,
the statute created a public policy against firing workers who need time
off to care for family members. The court ruled he could not sue.
Why This Is Important . . . This decision is an example of how
employees have tried to get around the requirement that they must be
employed for a year before they are entitled to FMLA leave.
RENT TOO CHEAP? CAN’T BREACH LEASE
The Appeals Court ruled that a landlord breached a lease by denying a
tenant’s proposed sublease at a low rent. The commercial lease said that
if the tenant sublet the property for a higher rent than it was paying,
the landlord would receive 75 percent of the additional rent. Since the
lease did not require the tenant to sublease at market rent the landlord
could not refuse consent.
Why This Is Important . . . Carefully drafting commercial
leases can prevent landlords from losing control over tenancies.
SALESPERSON’S DESIGN OUTSIDE COPYRIGHT
After leaving a jewelry design company, a former employee used a pin
design he developed while he had worked for that company. The former
employer sued, claiming copyright infringement. The court denied an
injunction, finding that even if the employee had designed the pin while
he worked for the company, he worked as a salesperson, not a designer.
The design may not be a "work for hire," which normally entitles the
company to a copyright, since designing jewelry may have been beyond the
scope of the employee's employment.
Why This Is Important . . . A company can be entitled to
intellectual property rights which include copyrights over work created
by its employees. However, if a creation is beyond the scope of the
employee's employment, the company may have no rights to it unless there
is a prior written agreement.
INTERACTIVE WEBSITE CREATES JURISDICTION
A Texas corporation that sells printer cartridges and refill kits by
Internet sued competitors in a Texas court for trademark infringement.
One argued the court had no jurisdiction because it was an Oregon
company. It operated an interactive website which allowed consumers in
Texas and other states to purchase products and get email confirmation
of purchases. Because of this direct contact with Texas consumers, the
court refused to dismiss the claims.
Why This Is Important . . . This illustrates a court finding
that interactive websites create jurisdiction practically everywhere.
GET IT IN WRITING TO BE PAID
An employment agency sued for payment after placing a candidate with an
employer. The employer moved to dismiss the case because the agreement
was not in writing. A Massachusetts statute says any agreement to pay
compensation for service as a broker or finder shall be void and
unenforceable unless in writing. The Court of Appeals upheld the
dismissal because an employment agency or "headhunter" is a broker or
finder within the meaning of the law.
Why This Is Important . . . Some agreements must be written to
be enforceable regardless of time or dollar amount.
FALSE CREDIT REPORT LEADS TO SUIT
A mortgage customer had difficulty getting credit after his bank
incorrectly reported he had declared bankruptcy, even though it agreed
the customer had not. The bank did not take steps to correct the
customer's credit report. A federal appeals court ruled that the
mortgage customer could sue the bank under the Fair Credit Reporting Act
(FCRA). This is the first federal appeals court to hold that the FCRA
gives individuals the right to sue for violations of the Act.
Why This Is Important . . . The decision underscores the
importance of correctly reporting credit information and to reasonably
investigate credit disputes.
OPPOSING ATTORNEY MAY CONTACT EMPLOYEES
The rule which bars attorneys from contacting individual employees of
organizations represented by counsel only prohibits contact with those
employees who have the authority to commit the organization to a
position regarding the subject matter of the case, declared the
Massachusetts Supreme Court.
Why This Is Important . . . Employers should not assume
employees cannot be contacted by attorneys representing the other side.
This ruling means that practically all nonmanagment employees can be
contacted and, in some cases, managers as well.
NEW CONDO COMES WITH WARRANTY
A “warranty of habitability” applies in the sale of a newly
constructed condominium unit or the transfer of newly constructed common
areas to an organization of unit owners, ruled the Massachusetts Supreme
Court. An individual unit owner may claim a breach of warranty if (1) he
purchased a new residential condominium unit from the builder-vendor;
(2) the condominium unit contained a latent defect; (3) the defect
manifested itself to the purchaser only after its purchase; (4) the
defect was caused by the builder's improper design, material, or
workmanship; and (5) the defect created a substantial question of safety
or made the condominium unit unfit for human habitation. The claim must
be brought within the three-year statute of limitation and the six-year
statute of repose.
Why This Is Important . . . The decision gives new condominium
buyers rights against builders beyond those in any contract with them.
These rights exists even if the buyer did not have a contract with the
builder.
SEXUAL HARASSMENT COSTS PLENTY
Even though the jury concluded the Plaintiff had no actual damages, a
Court of Appeals upheld a jury verdict awarding $100,000 in punitive
damages in a sexual harassment case. The court noted that other federal
appeals courts -- including Massachusetts -- have ruled that there can
be no punitive damages in the absence of actual damages. The court noted
that punitive damages are meant to punish and deter conduct that is
malicious or in reckless disregard of the rights of others.
Why This Is Important . . . The decision shows a split on a
federal law issue which is likely to go to the Supreme Court. Employers
can pay a hefty price for harassment even if employees are not actually
harmed.
OFFENSIVE WALL A D-I-Y JOB
One wall of a multi-family home encroached onto adjacent property owned
by the plaintiffs. The court ordered the removal of the offending
portion. But because the plaintiffs did not prove that the defendants or
their predecessors were responsible for installing the wall, the court
ruled the plaintiffs cannot require the defendants to remove it.
Why This Is Important . . . The decision is a bittersweet
victory for the plaintiffs. The court ordered that the wall which
encroached on the plaintiffs' property had to be removed. However,
because the plaintiffs could not prove the defendants built the wall,
the plaintiffs will have to pay for its removal.
MINORITY SHAREHOLDER CAN SUE
A woman who was a 25% shareholder and an employee of a closely-held
corporation sued, saying she was wrongfully fired by the other
director/shareholders in order to freeze her out and deprive her of her
interest in the corporation. She said that, since the corporation did
not pay dividends, the only way for her to get a return on her
investment was through the salary, commissions and bonuses she received
as an employee. The defendants argued the court should dismiss the claim
under the general rule governing at-will employees. The court ruled
there must be a trial on the claims to decide whether (1) the defendants
breached the covenant of good faith and fair dealing, and (2) whether
the discharge fell under the public policy exception to the at-will
rule.
Why This Is Important . . . The decision follows a recent line
of Massachusetts cases where the courts have ruled that minority
shareholders/employees in close corporations can recover against the
corporation and its other shareholders following a termination of
employment without a legitimate business reason -- a far higher standard
than the at-will rule calls for. Careful business legal planning is
needed to avoid this result.
DON’T END POLICIES WITHOUT TELLING
An employer terminated a long-term disability insurance policy without
informing employees. A court has ruled an employee could proceed with a
lawsuit against his employer because the employer's failure to notify
him of that termination was a breach of the fiduciary duty to plan
participants under ERISA. ERISA requires any modification in a summary
plan description be furnished to each plan participant not later than
210 days after the end of the plan year in which the change is adopted.
The court noted that ERISA was enacted to protect the interests of plan
participants, who are dependent upon their employers to provide them
with all material information regarding the plan.
Why This Is Important . . . This case is significant in that
it suggests an employer may not remain silent even in the absence of an
inquiry by the employee.
FEDERAL TAX LAW PIERCES STATE PENSION SHIELD
The Bankruptcy Court has held that the IRS's tax lien can be attached to
a debtor's interest in an ERISA qualified pension plan. While
Massachusetts law exempts ERISA-qualified pension plans from creditors'
claims, that law is powerless to exempt property from the federal tax
lien. As a result, the IRS has a valid lien on the Debtor's pension plan
as security for its claim.
Why This Is Important . . . Individuals cannot rely on the
Massachusetts law protecting pensions to protect their pensions from
federal tax liens. |
A Letter from Paul Nicolai