Lee Gesmer, Author at Mass Law Blog • Page 73 of 123

And Now, a Brief Reminder From the SJC: Employee Handbooks Can Create a Binding Obligation on the Part of the Employer, So Be Careful

by Lee Gesmer | Jan 15, 2009 | Contracts

For more years than I can remember we’ve been warning clients that an employee handbook can create unintended legal obligations. A case decided by the Supreme Judicial Court late last year (December 2008), serves as a reminder of this hazard. The court found that a sick day policy contained in a handbook bound the Mass Turnpike Authority to pay certain benefits.

The case attempts to leave the issue of whether a handbook creates a binding obligation open to a case-by-case analysis (especially when it comes to promises of employment to at-will employees, where it seems less likely that a handbook can get employers in trouble), but the fact remains that this is an area fraught with risk. Who even wants to go through the hassle and expense of defending one of these cases, when they are so easy to avoid? Placing a prominent “disclaimer” at the front of the book will do the job:

“This handbook is is presented as a matter of information only and its contents should not be interpreted as a contract or other form of obligation between the firm and any of its employees”

Rarely does the law make avoiding a legal headache so simple.

Link to the case: LeMaitre v. Massachusetts Turnpike Authority (SJC, 2008).

The Bill That Would Make Noncompete Agreements Unenforceable in Massachusetts

by Lee Gesmer | Jan 13, 2009 | Contracts, Noncompete Agreements

[Update, November 7, 2011]: Almost 3 years later, and still no law.

Here is the full text of a bill filed last week that would make noncompete agreements unenforceable in Massachusetts, at least as to employees (as contrasted with noncompete covenants entered into in connection with the sale of a business, the other major category of noncompete covenants):

AN ACT TO PROHIBIT RESTRICTIVE EMPLOYMENT COVENANTS Section 1. Section 19 of Chapter 149 of the General Laws of Massachusetts is hereby amended by inserting at the end the following new paragraphs:

Any written or oral contract or agreement arising out of an employment relationship that prohibits, impairs, restrains, restricts, or places any condition on, a person’s ability to seek, engage in or accept any type of employment or independent contractor work, for any period of time after an employment relationship has ended, shall be void and unenforceable with respect to that restriction. This section shall not render void or unenforceable the remainder of the contract or agreement.

For the purposes of this section, chapter 149, section 148B shall control the definition of employment.

Whoever violates the provisions of this section shall be liable for reasonable attorneys fees and costs associated with litigation of an affected employee or individual.

This section shall be construed liberally for the accomplishment of its purposes, and no other provision of the General Laws shall be construed in a manner that would limit its coverage. Nothing in this section shall preempt tort or contract claims, or other statutory claims, based upon an employer’s use, or attempted use of an unlawful contract or agreement to interfere with subsequent employment or contractor work.

This section shall apply to all contracts and agreements generated after the effective date of this act.

Section 2. Section 42A of Chapter 93 of the General Laws of Massachusetts is hereby amended by striking the words ‘in violation of the terms of such agreement’ where they first appear.”

Section 1. Section 19 of Chapter 149 of the General Laws of Massachusetts is hereby amended by inserting at the end the following new paragraphs:

Any written or oral contract or agreement arising out of an employment relationship that prohibits, impairs, restrains, restricts, or places any condition on, a person’s ability to seek, engage in or accept any type of employment or independent contractor work, for any period of time after an employment relationship has ended, shall be void and unenforceable with respect to that restriction. This section shall not render void or unenforceable the remainder of the contract or agreement.

For the purposes of this section, chapter 149, section 148B shall control the definition of employment.

Whoever violates the provisions of this section shall be liable for reasonable attorneys fees and costs associated with litigation of an affected employee or individual.

This section shall be construed liberally for the accomplishment of its purposes, and no other provision of the General Laws shall be construed in a manner that would limit its coverage. Nothing in this section shall preempt tort or contract claims, or other statutory claims, based upon an employer’s use, or attempted use of an unlawful contract or agreement to interfere with subsequent employment or contractor work.

This section shall apply to all contracts and agreements generated after the effective date of this act.

Section 2. Section 42A of Chapter 93 of the General Laws of Massachusetts is hereby amended by striking the words ‘in violation of the terms of such agreement’ where they first appear.”

Section 1. Section 19 of Chapter 149 of the General Laws of Massachusetts is hereby amended by inserting at the end the following new paragraphs:

Any written or oral contract or agreement arising out of an employment relationship that prohibits, impairs, restrains, restricts, or places any condition on, a person’s ability to seek, engage in or accept any type of employment or independent contractor work, for any period of time after an employment relationship has ended, shall be void and unenforceable with respect to that restriction. This section shall not render void or unenforceable the remainder of the contract or agreement.

For the purposes of this section, chapter 149, section 148B shall control the definition of employment.

Whoever violates the provisions of this section shall be liable for reasonable attorneys fees and costs associated with litigation of an affected employee or individual.

This section shall be construed liberally for the accomplishment of its purposes, and no other provision of the General Laws shall be construed in a manner that would limit its coverage. Nothing in this section shall preempt tort or contract claims, or other statutory claims, based upon an employer’s use, or attempted use of an unlawful contract or agreement to interfere with subsequent employment or contractor work.

This section shall apply to all contracts and agreements generated after the effective date of this act.

Section 2. Section 42A of Chapter 93 of the General Laws of Massachusetts is hereby amended by striking the words ‘in violation of the terms of such agreement’ where they first appear.

If enacted, this proposed law would wipe out close to 200 years of Massachusetts law enforcing (in the “right” circumstances, and consistent with equity) covenants not to compete. Massachusetts would join California and a few other states in refusing to enforce these agreements by order of their state legislatures. While I’m not betting on passage, you never know ….

Gatehouse Media v. The New York Times: Ready for Trial, Counsel?

by Lee Gesmer | Jan 6, 2009 | Copyright, Courts

When I discussed the copyright case Gatehouse Media v. The New York Times over the weekend I hadn’t reviewed the court docket, and hadn’t been aware that Judge William Young had pulled the trick that he is famous for (at least locally): when a party requests a preliminary injunction, he responds by ordering an expedited trial. And I do mean expedited.

The case was filed on December 22, 2008.

Docket entry 13, issued the same day, states in relevant part (cleaned up a bit for readability):

Electronic Clerk’s Notes for proceedings held before Judge William G. Young: Motion Hearing held on 12/22/2008 re MOTION for Preliminary Injunction and MOTION for Temporary Restraining Order filed by Gatehouse Media Massachusetts, Inc.

The Court rules denying Motion for TRO; because the matter will be collapsed with a trial on the merits. The Court is reserving ruling on Motion for Preliminary Injunction; ( Jury Trial set for THE RUNNING TRIAL LIST AS OF 1/5/2009 09:00 AM before Judge William G. Young.); Counsel are to cooperate with one another re: discovery. Counsel are to contact the clerk as to the schedule. A 4 week jury trial is scheduled for Jan 5 at this time. If counsel settle the case, a phone call is all that is necessary.

Translation – be ready for trial at 9:00 a.m. Monday, January 5, 2009, nine business days after suit was filed. Maybe we’ll reach you, maybe we won’t (that four week case may settle), but you’d better be ready. Oh, and enjoy the two holiday weekends between now and then.

This is classic Judge Young, and he’s been doing it from the first day he was appointed to the federal bench over 20 years ago.

The moral: if you file a suit in federal court and you are seeking a preliminary injunction, be prepared for the risk that you might draw Judge Young, in which case, be very prepared. A super-expedited trial like this favors the defense, since the plaintiff will have great difficulty preparing for trial in two weeks. Assuming you don’t want to be prepared for trial on the day you file suit, the way to avoid this, in this district, is to file suit and see what judge you draw. If you draw Judge Young, you can decide whether you want to file for a PI and risk an immediate trial. There’s no law that states that you must file your PI motion simultaneous with the complaint, but filing the PI motion simultaneous with filing suit deprives the plaintiff of that choice.

In this case, Gatehouse Media could have adopted a different strategy, as follows:

File suit and see what Judge is assigned to the case. If Judge Young is assigned, do not file a preliminary injunction motion, knowing that this risks an immediate trial.
As you publish your local news each week, file copyright registrations for each issue. This is inexpensive, and so simple it could be done by an intern or paralegal. If Boston.com adds towns (beyond Newton, Needham and Waltham), register the weekly publications for those towns as well.
By registering the copyrights within three months following publication, Gatehouse Media would be entitled to recover statutory damages for each publication, as well as attorney’s fees incurred in prosecuting that infringement. Statutory damages may be as great as $150,000 per infringement in cases of “willful” infringement – that is, $150,000 per publication. If Boston.com is aggregating and publishing the Gatehouse Media news for Newton, Needham and Waltham each week, Boston.com is looking at potential damages of as much as $450,000 per week. By the time the case goes to trial in the ordinary course (say a year), Boston.com is risking damages in the tens of millions of dollars. Would that financial risk be likely to lead to a settlement favorable to Gatehouse Media? You betcha!

Famous Trials

by Lee Gesmer | Jan 5, 2009 | Courts

Trials.

We love them, we hate them. If you’re a client, you really hate them. Or at least you should.

There are moments of high drama, but the vast majority of trials are as boring as watching grass grow. Even trials that attract the prurient interests of the public (think OJ or Spector), that force the world to watch with morbid fascination, are, for the most part, boring. Why do you think that Court TV shows only the “highlights”?

Nevertheless, if you take an important trial and boil it down to its essence – take out all the tedium, the voir dire, the endless sidebars and evidentiary disputes, the scientific/technical testimony that is often incomprehensible, the marginal witnesses that everyone in the courtroom dozes through — and leave just the heart of the the case, what remains can be fascinating.

Oscar Wilde, 1895

Law Professor Douglas Linder has done just that at his site, Famous Trials.

There you can read about trials ranging from Socrates in 399 B.C., to the 9/11 trial of Zacarias Moussaoui in 2006.

McMartin Pre-School, 1987

As the trials move into the so-called modern era, the coverage expands in detail. The site contains many trial transcript excerpts, multimedia files, and more. It is truly a labor of love, and a service to the world. Or at least those few who are interested in this kind of stuff. Check it out here.

Massachusetts Federal District Court Presented With Lawsuit Involving Copying of Online Newspaper Headlines – Gatehouse Media v. The New York Times

by Lee Gesmer | Jan 3, 2009 | Copyright

An interesting copyright case has been filed in Federal District Court in Massachusetts.

In Gatehouse Media v. The New York Times, Gatehouse Media contends that the Times has infringed its copyrights by copying the headlines and first sentences from Gatehouses’ local online newspapers, and displaying them verbatim on a Boston.com website (the New York Times owns Boston.com).

To see this in action click here and your browser should open a page on Boston.com labeled “Needham.” Scrolling down the center column of the page, you’ll see news “headlines”, followed by the first sentence of each story.

If you click on one of the headlines you should be taken to the “WickedLocalNeedham” web page and presented with the full article. If you repeat this a few times with other headlines, you’ll see that the Boston.com site has copied the headlines, and the first sentences of the stories, from the WickedLocal site, which is owned by Gatehouse Media. Most likely, this is accomplished “automatically” by the Boston.com computers, which “scrape” the headlines and “ledes” from the WickedLocal site and “aggregate” them on the Boston.com site.

At present, the Boston.com “Your Town” site covers three towns in this way – Needham, Newton and Waltham. All three Boston.com web pages use the headlines and first sentences from articles owned by Gatehouse Media.

Is this permissible, or is Boston.com infringing copyrights owned by Gatehouse? The answer to this question is important because news aggregation is ubiquitous on the web, and there is relatively little law on the issue. U.S. Federal District Judge William Young, one of our federal district’s best judges, may have the opportunity to issue an important decision in this case. And, the fact that Gatehouse Media has asked Judge Young to issue a preliminary injunction means that a preliminary decision on the merits may issue soon (assuming that case isn’t settled in the meantime).

Gatehouse Media’s preliminary injunction papers make a powerful case for a preliminary injunction, and in my judgment Boston.com will be hard pressed to defend this suit. There is no question that the material in question is copyrightable, and that it has been copied and published on the Boston.com site.

Boston.com’s defenses are likely to be based on the fair use doctrine, but Boston.com will be hard pressed to prevail on these defenses. Commercial use, such as Boston.com is making here, makes a “fair use” defense difficult. And, while the “percentage” of material copied from each article may be small, the use is “qualitatively” significant, making a defense premised on de minimus copying difficult as well. However, I expect Boston.com to argue that the fact that the content at issue is news makes it particularly appropriate for application of fair use. I also expect Boston.com to argue that its publication not only will have no economic impact on the Gatehouse Media sites, but it will have the positive effect of driving more traffic to those sites, benefiting (rather than harming) Gatehouse Media.

I’ll publish Boston.com’s opposition memo when it becomes available and, of course, post Judge Young’s decision when it is issued.