Cook v. Patient Edu, LLC

989 N.E.2d 847, 465 Mass. 548, 20 Wage & Hour Cas.2d (BNA) 1608, 2013 WL 2501940, 2013 Mass. LEXIS 464
Massachusetts Supreme Judicial Court·Decided June 13, 2013·Published·Cited by 27 cases

Opinion

Duffly, J.

We consider in this case whether managers of a limited liability company (LLC) may be held individually liable [549] under the Massachusetts Wage Act, G. L. c. 149, §§ 148, 150 (Wage Act), for unpaid wages due to an employee.2 Peter G. Cook filed suit against the defendants, Patient Edu, LLC (Patient Edu), and two of its managers, Steven Graziano and Michael Schulman,3 for failing to pay more than $68,000 in compensation he claimed was owed to him under an employment contract. Concluding that G. L. c. 149, § 148, does not, by its plain language, impose individual liability on the managers of an LLC, a Superior Court judge granted the motion to dismiss filed by Patient Edu and Graziano, pursuant to Mass. R. Civ. P. 12(b)(6), 365 Mass. 755 (1974), and dismissed count one of the complaint against Graziano and Shulman. Cook appealed from the dismissal and we transferred the case to this court on our own motion. We conclude that a manager who “controls, directs, and participates to a substantial degree in formulating and determining” the financial policy of a business entity, see Wiedmann v. The Bradford Group, Inc., 444 Mass. 698, 711 (2005), may be a “person having employees in his service” under G. L. c. 149, § 148, and thus may be subject to liability for violations of the Wage Act.

Background. We review the allowance of a motion to dismiss de novo, accepting as true all well-pleaded facts in the complaint and favorable inferences drawn therefrom. We also may take into account the materials attached thereto.4 Melia v. Zenhire, Inc., 462 Mass. 164, 165-166 (2012).

[550] The complaint alleges that Graziano and Schulman were managers of Patient Edu, a Massachusetts LLC.* ***56 Cook entered into a written employment agreement with Patient Edu in December, 2008, according to which he would serve as Patient Edu’s director of business development and strategic partner development for a base salary of $70,000 and a guaranteed draw of $30,000 annually. The agreement also provided for the reimbursement of business and travel expenses.6 It was signed by Graziano, as president of Patient Edu. Cook worked for Patient Edu from January 5, 2009, through May 21, 2010, when he resigned. He did not receive any payment from Patient Edu during the first six months of his employment, and received salary checks “sporadically” thereafter. When he resigned, he was owed $61,538.56 in wages and $6,879.36 in unreimbursed expenses.7-8

Discussion. Cook filed an action under G. L. c. 149, § 150, which provides that “[a]n employee claiming to be aggrieved by a violation of” G. L. c. 149, § 148, may institute a private action for injunctive relief and damages, including treble damages. General Laws c. 149, § 150, does not separately define the class of people who may be subject to civil liability under G. L. c. 149, § 148. The first defendant named in Cook’s action was the LLC, and the other two defendants were managers of the LLC. The issue whether Patient Edu is liable for unpaid wages under the Wage Act is not before us; the parties dispute only whether each individual defendant is a “person having [551] employees in his service” and thus also subject to liability. We therefore must determine whether the Legislature, in drafting G. L. c. 149, § 148,9 intended the managers of LLCs to be hable for violations of that statute. See Weems v. Citigroup Inc., 453 Mass. 147, 151 (2009); Wiedmann v. The Bradford Group, Inc., supra.

We interpret statutory language “according to the intent of the Legislature ascertained from all its words construed by the ordinary and approved usage of the language, considered in connection with the cause of its enactment, the mischief or imperfection to be remedied and the main object to be accomplished, to the end that the purpose of its framers may be effectuated.” Boston Police Patrolmen’s Ass’n, Inc. v. Boston, 435 Mass. 718, 719-720 (2002), quoting O’Brien v. Director of the Div. of Employment Sec., 393 Mass. 482, 487-488 (1984). “If a liberal, even if not literally exact, interpretation of certain [552] words is necessary to accomplish the purpose indicated by the words as a whole, such interpretation is to be adopted rather than one which will defeat that purpose.” Sullivan v. Chief Justice for Admin. & Mgt. of the Trial Court, 448 Mass. 15, 24 (2006), quoting Champigny v. Commonwealth, 422 Mass. 249, 251 (1996).

The Wage Act “was intended and designed to protect wage earners from the long-term detention of wages by unscrupulous employers as well as protect society from irresponsible employees who receive and spend lump sum wages.” Melia v. Zenhire, Inc., supra at 170, quoting Cumpata v. Blue Cross Blue Shield of Mass., Inc., 113 F. Supp. 2d 164, 167 (D. Mass. 2000). See Boston Police Patrolmen’s Ass’n, Inc. v. Boston, supra at 720, citing American Mut. Liab. Ins. Co. v. Commissioner of Labor & Indus., 340 Mass. 144, 147 (1959). Since it was first enacted in 1879 to ensure that municipalities paid “laborers” a minimum wage weekly, the Wage Act has gradually expanded in reach. See St. 1879, c. 128. At varying times, employees of particular industries were added to the class of those protected by the statute10 until, in 1935, the Wage Act was amended to apply to all private employers. See St. 1935, c. 350.

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Cook v. Patient Edu, LLC, 989 N.E.2d 847, 465 Mass. 548, 20 Wage & Hour Cas.2d (BNA) 1608, 2013 WL 2501940, 2013 Mass. LEXIS 464 (Mass. 2013).

989 N.E.2d 847 (Cook v. Patient Edu, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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