The Supreme Judicial Court's December 17, 2012 decision in
Croker v. Townsend Oil Company Inc., clarifies several
issues regarding claims under the Wage Act. Specifically, the
decision clarifies the application of the Wage Act's statute of
limitations and the enforceability of general release language
covering Wage Act claims.
The plaintiffs in Croker were both truck drivers,
classified as independent contractors by Townsend Oil, an oil
distribution company. Each signed contracts requiring full-time
delivery of oil and containing non-compete clauses prohibiting
delivery for other companies. At the end of their employment, each
signed similar termination agreements containing general releases
of all claims. After another Townsend driver, Hughes Amero,
successfully established that he had been misclassified as an
independent contractor rather than an employee, the Croker
plaintiffs sued, alleging that they too had been misclassified and
were entitled to pay, including overtime pay under the Wage Act.
Townsend moved for summary judgment, arguing the claims were barred
by the Wage Act's three-year statute of limitation and otherwise
waived in the general release of claims agreed upon in the
termination agreements.
STATUTE OF LIMITATIONS
The court considered several questions regarding the statute of
limitations. First, the court decided whether or not the
plaintiffs' overtime claims (subject to a two-year statute of
limitations) could be brought beyond the two-year timeframe via the
Wage Act's three-year statute of limitations. The court held that
the Wage Act's statute of limitations defined the window in which
any Wage Act claim could be brought. However, to permit overtime
claims for three years would render meaningless the legislature's
two-year statute of limitations for overtime claims. Therefore, the
court concluded that the Wage Act's three-year statute of
limitations permits a claim for overtime pay, but in the event the
claim is barred by the two-year statute of limitations for overtime
claims, recovery is limited to regular pay, not overtime pay.
The plaintiffs also claimed that the statute of limitations should
be tolled in this case because of the discovery rule, the
defendant's fraudulent concealment of facts, and because of the
continuing violation doctrine. The court found that on the facts of
this case, there was no evidence to suggest that the defendant
fraudulently concealed evidence. Further, the court found the
discovery rule inapplicable because the plaintiffs possessed all
the facts necessary to reach the conclusion that they might qualify
as employees. As to the continuing violation doctrine, the court
found that claims related to pay are discrete and separate wrongs,
to which the continuing violation doctrine should not apply. The
court distinguished Wage Act cases from discrimination claims where
often the facts are such that to fully appreciate the nature of the
discrimination, one must consider a complete series of events, some
of which occurred beyond the statute of limitations. Claims related
to pay give rise to causes of action each time they occur and are
easily identifiable. Therefore, the Wage Act provides the right to
recover for violations from three years prior to the date the
lawsuit is filed.
RELEASE LANGUAGE
Both plaintiffs had signed general releases as part of their
termination. Townsend Oil argued that the releases barred their
Wage Act claims. The court balanced its policy of enforcing release
language with the policies that support the Wage Act as a special
protection for employees. It adopted the language and logic of its
Warfield decision relating to the language necessary to
effectively release discrimination claims. To effectively release
statutory Wage Act claims, a release must use language that clearly
and unmistakably waives the claims in language an ordinary person
can understand. Broadly worded legalese will not suffice to
effectively release Wage Act claims.
The Croker decision provides helpful information to both
plaintiffs and defendants. It demonstrates that for plaintiffs,
moving quickly on Wage Act claims (like other employment claims) is
essential to preserving the ability to pursue causes of action. For
defendants, it underscores the importance of using clear and
unmistakable language in referring to Wage Act claims when drafting
release agreements.