Court: District Court, D. Massachusetts; February 28, 2013; Federal District Court
Christopher McAleer has filed a lawsuit against his former employer, Prudential Insurance Company, claiming age discrimination and failure to pay sales commissions. He has also added claims for tortious interference with advantageous relations and breach of the covenant of good faith and fair dealing. Prudential seeks to dismiss the case, arguing that the discrimination claims are time-barred, that the Wage Act does not apply to the commissions, and that the state law claims are duplicative and preempted.
The court will dismiss the discrimination claims due to McAleer's failure to file within the statute of limitations but will allow his claims regarding unpaid sales commissions under the Wage Act and common law to proceed.
In 2002, McAleer became a Prudential employee following its acquisition of his previous employer. He was promoted to New England Division Sales Manager in 2005 but was demoted in 2006 at age 59 to Regional Sales Manager. He alleges that his demotion occurred because he was replaced by a significantly younger employee, Eric Fauth, who was around 40 at the time. McAleer experienced declining sales figures in 2008 and 2009, attributing them to Prudential's delays in approving competitive annuity products for Massachusetts, which represents a major portion of their business in New England. His requests for adjusted sales targets were denied, and he was terminated on June 24, 2009, for failing to meet performance expectations.
McAleer claims that age discrimination motivated his termination and contends that he was subjected to ageist comments by his supervisors. An internal investigation by Prudential's Human Resources found no evidence of discrimination. McAleer initially raised his age discrimination concerns two weeks before his termination and was informed of his job loss in a letter dated July 24, 2009, coinciding with his final day at work.
McAleer accrued 58 days of unused paid time off, leading to an effective termination date of October 13, 2009. He expressed concerns about age discrimination to the Human Resources department on August 1, 2009. Following his last working day, McAleer was paid for his unused vacation days and subsequently took a 12-week short-term disability leave, extending his termination date to December 21, 2009. A new termination letter was issued by Prudential to reflect this change. On September 30, 2009, McAleer filed a complaint with the Massachusetts Attorney General's Fair Labor Division regarding unpaid commissions. He later filed claims with the Massachusetts Commission Against Discrimination (MCAD) and the Equal Employment Opportunity Commission (EEOC) on August 31, 2010, receiving right-to-sue letters from both entities in 2011. McAleer and his counsel did not receive the EEOC letter until February 28, 2012. He filed this action on May 9, 2012, within the 180-day period after receiving the right-to-sue letter. An Amended Complaint was filed on October 1, 2012, and Prudential moved to dismiss it shortly thereafter. The standard for surviving a motion to dismiss requires the complaint to contain sufficient factual matter to state a plausible claim for relief, with all well-pleaded allegations taken as true. For discrimination claims, Title VII mandates a filing within 180 days, but Massachusetts law allows up to 300 days. Since McAleer filed his EEOC claim on August 31, 2010, his action may be time-barred if the alleged discrimination occurred before November 4, 2009.
An employment discrimination claim begins when the employee has clear notice of harm caused by a discriminatory act. The statute of limitations starts when the plaintiff is aware of the injury from the discriminatory practice, as established in relevant case law. The primary issue is whether Prudential's July 24, 2009 termination letter constituted unequivocal notice. Prudential argues that the letter, coupled with McAleer’s instructions to leave the office and turn in his ID, provided clear notice, thus triggering the statute of limitations. They assert that McAleer’s claim accrued on that date, making his later claim untimely since it was filed beyond the 300-day limit.
Conversely, McAleer contends that a subsequent letter dated November 4, 2009, which he claims superseded the July letter, extended his termination date and therefore delayed his notice of termination. He argues that since he filed his claim exactly 300 days after the November letter, it is timely. However, this argument is deemed untenable for several reasons. Firstly, the existence of the second letter does not alter the initial notice of termination from July 24, 2009. The statute of limitations is based on the discriminatory decision's notice, not the timing of its consequences. Secondly, McAleer's assertion that a reasonable person would think his termination was rescinded due to his continued employment for two months is implausible, as he did not engage in any work or discussions with Prudential during that period. This case reflects a clear instance of unequivocal notice, aligning with precedents that indicate internal procedures for reconsideration do not affect the statute of limitations.
McAleer's argument that Prudential suggested it might reconsider his termination due to the extension of his employment past the originally stated date, tied to his disability leave request, is rejected. The initial termination decision is characterized as definitive rather than tentative. McAleer's reliance on case law, particularly Svensson v. Putnam Inv. LLC and Wheatley v. AT&T, is deemed inappropriate as these cases involved circumstances where employers provided employees with transitional periods or promises of future employment, rendering their notices equivocal. In contrast, Prudential's July 24, 2009 termination letter was unequivocal, lacking any offer of reinstatement or alternative employment, and therefore did not create an environment that would deter McAleer from filing a discrimination claim. The letter only stated he would receive payment for unused vacation time and did not involve a waiting period, unlike the scenario in Angeles-Sanchez v. Alvarado, where an employee's resignation was deemed equivocal due to a reserved waiting period. Thus, the termination was immediate and definitive, directly contradicting McAleer’s claims.
McAleer’s claims in Counts I-V of the Amended Complaint, which pertain to discrimination, are dismissed with prejudice due to his failure to file with the EEOC within the 300-day statute of limitations. The court does not consider the alternative argument regarding the 90-day limit post-right-to-sue letter or McAleer’s equitable tolling argument related to the receipt date of that letter.
Under the Massachusetts Wage Act, designed to prevent employers from unreasonably withholding wages, McAleer seeks recovery of unpaid sales commissions from Prudential since July 24, 2009. Prudential contends that the Wage Act is inapplicable because the commissions were not definitively determined, given their discretion in interpreting the commission plan. However, McAleer has sufficiently pled facts indicating that his commissions are "arithmetically determinable" according to the Wage Act. The commission plan specifies that commissions are based on cumulative gross sales compared to a Sales Commission table, enabling McAleer to pursue precise sales figures through discovery. Prudential's argument that its discretion negates the definitiveness of the commissions is rejected, as discretion alone does not eliminate the obligation to pay if the commissions are ascertainable. The court references precedent asserting that discretionary bonuses are not definitively determined only if the employer has no obligation to award them.
Prudential has discretion in administering its commission plan, but this does not extend to withholding or modifying commission payments arbitrarily. The discretion is limited to factual determinations, calculations, and eligibility criteria. Prudential asserts it can withhold commissions from employees deemed ineligible, such as those terminated for cause. McAleer’s claims hinge on the legality of his termination; if it was due to discrimination rather than performance issues, Prudential may still face liability under the Wage Act.
The commission plan allows Prudential to adjust commissions for employees on leave, including disability, but it does not allow withholding of commissions earned before the leave. Commissions are considered due and payable once any contingencies related to entitlement are met. The plan does not specify these contingencies, leading to the presumption that commissions are earned when a sale is closed, regardless of when payment is received. Courts typically support this interpretation unless the plan explicitly outlines conditions for earning commissions. In previous cases, such as Micciche, commissions were deemed payable even if payment was not received before termination, provided the sale was completed during employment.
The court determined that delays in payment are not grounds for commission deductions as they stem from evaluation processes. In a related case, the court ruled that an employee could receive a proportional incentive payment for the time worked before the employer's bankruptcy, regardless of when payments were received. For McAleer, any commissions from sales closed while employed at Prudential may be considered earned, even if payment was delayed post-termination. McAleer does not seek commissions for unclosed sales but only for those earned during his employment. Prudential contends that it owed McAleer no commissions after July 24, 2009, citing that he was no longer an "active" employee. However, this argument is flawed for three reasons: (1) The cited case (Perry) does not pertain to the Massachusetts Wage Act, (2) McAleer's termination letters indicate that he remained an "active" employee until his official termination date, and (3) Prudential has not justified why commissions earned before July 24, 2009, should not be payable. Consequently, McAleer's claims under the Wage Act are deemed valid. Additionally, Prudential argues that McAleer's common law claims are redundant to his discrimination claim under Massachusetts law, which it claims is the exclusive remedy. This assertion is backed by three case precedents.
M.G.L. 151B does not preclude all traditional tort claims, even if they arise from similar facts. McAleer's common law claims differ from his discrimination claims, leading to the denial of Prudential’s motion to dismiss those claims. The cases of Mouradian and Melley do not establish a common law cause of action for wrongful dismissal of at-will employees based solely on public policy against age discrimination. While Mouradian and Melley suggest that a public policy violation does not automatically create a new common law remedy for wrongful termination, they acknowledge that a plaintiff can still pursue recognized common law claims despite M.G.L. 151B.
The statute is meant to broaden remedies rather than serve as an exclusive remedy, explicitly stating it does not repeal other laws related to discrimination. Therefore, common law claims can be entertained if they address tortious actions beyond wrongful termination. Mouradian's claims were inherently linked to wrongful termination, while McAleer's claims of tortious interference and breach of the covenant of good faith and fair dealing focus on the withholding of commissions, separate from wrongful dismissal. Under the Fortune doctrine, a termination without good cause to deprive an employee of commissions may violate the covenant of good faith and fair dealing, which supports McAleer’s claims.
Defendant’s Motion to Dismiss the Amended Complaint is granted with prejudice regarding Counts I-V, which allege age discrimination. Conversely, the motion is denied for Count VI, which pertains to a violation of the Wage Act, Count VII concerning breach of the covenant of good faith and fair dealing, and Count VIII, alleging tortious interference with advantageous relations. The Complaint notes that plaintiffs Allain and Fauth were approximately 40 years old in 2006, making them around 43 in 2009. The document references case law regarding the application of the Wage Act to commissions, indicating that while some earlier cases imposed limitations, more recent rulings by Massachusetts appellate courts have rejected these constraints. The Wage Act's application is limited only by the requirements that commissions must be "definitely determined" and "due and payable." The author acknowledges the obligation to adhere to the rulings of the Massachusetts Supreme Judicial Court.
