Superior Court of Massachusetts, Suffolk, Business Litigation Session
Marie DeMego et al. on Behalf of Themselves and All Others Similarly Situated
Evan Nisonson et al No. 137199
May 25, 2017
MEMORANDUM AND ORDER ON CROSS MOTIONS FOR SUMMARY
JUDGMENT AND PLAINTIFFS' MOTION FOR CLASS
Kenneth W. Salinger, Justice
Plaintiffs assert claims for unpaid wages against directors
and former executives or other employees of ConnectEDU, Inc.,
which has filed for bankruptcy. Defendants have moved for
summary judgment on all claims asserted against them by the
Plaintiffs and on all cross claims asserted against them by
other Defendants. Plaintiffs have moved for summary judgment
on their claim for unpaid accrued vacation time and on the
claim by Manuel Rodriguez and Tonya Chin for unpaid
commissions; they do not seek summary judgment on Maria
DeMego's claim for unpaid commissions. In addition,
Plaintiffs move to certify a class of former ConnectEDU
employees with respect to the unpaid vacation claim.
Court will allow Evan Nisonson's motion for partial
summary judgment, allow Alan Bowers' motion for summary
judgment as to all claims against him, allow in part Paul
Sheppard's motion for summary judgment with respect to
Ms. DeMego's claim for commissions for 2012, and allow in
part the motion for summary judgment by Thomas Riley, Richard
Dresdale, Jay Sarles with respect to the various cross claims
among Defendants for indemnification and contribution. It
will deny the rest of Mr. Sheppard's summary judgment
motion, deny the rest of the motion for summary judgment by
Riley, Mr. Dresdale, Sarles, and Beth Dresdale, and deny
Plaintiffs' cross motion for summary judgment. Finally,
the Court will allow Plaintiffs' motion to certify a
class with respect to the claim for accrued but unpaid
vacation time. It will also schedule a final pre-trial
Summary of Claims
DeMego, Mr. Rodriguez, and Ms. Cynn all worked for a company
called ConnectEDU, Inc. They and other company employees were
fired on April 28, 2014, roughly four hours before ConnectEDU
filed a voluntary petition for bankruptcy.
Rodriguez, and Cynn assert two sets of claims under the
Massachusetts Wage Act. (G.L.c. 149, § § 148 &
150) against seven individuals who are or were employees or
directors of ConnectEDU. First, on behalf of themselves and
other employees who were fired by ConnectEDU, they claim that
they are owed payment for accrued but unused vacation time.
Second, Plaintiffs also claim that they are owed unpaid
commissions. DeMego says that she is still owed commissions
for 2012 and 2013, which she says should have been paid
during the first quarters of 2013 and 2014 respectively.
Rodriguez and Cynn only seek commissions for 2013, which they
say were due to be paid during the first quarter of 2014.
This second claim is not asserted on behalf Of any
the Defendants have asserted cross claims against each other
for indemnification and contribution, in the event they are
found to be liable.
Legal Background--Personal Liability under the Wage
statute, " [t]he president and treasurer of a
corporation and any officers or agents having the management
of [a] corporation shall be deemed to be the employers of the
corporation" for purposes of applying the Wage Act, See
G.L.c. 149, § 148. This means that a corporate officer
or manager " who 'controls, directs, and
participates to a substantial degree in formulating and
determining' the financial policy of a business,
entity" is personally liable for non-payment of wages.
Cook v. Patient Edu., LLC, 465 Mass. 548, 549, 989
N.E.2d 847 (2013) quoting. Wiedmann v. The Bradford
Group, Inc., 444 Mass. 698, 711, 831 N.E.2d 304 (2005).
Merely holding a managerial position over some branch,
division, or office of a corporation does not, by itself,
mean that that manager has the 'management' of the
'corporation' as a whole, " however.
Wiedmann, supra, at 712. Someone who has " a
management role" in a corporation is not personally
liable for non-payment of wages if they have not "
directed and participated to a substantial degree in
formulating the corporation's policy." Id.
Cross Motions for Summary Judgment
Plaintiffs' Wage Act Claims
was the president and chief executive officer of ConnectEDU
from May 2013 until he was fired on April 28, 2014. He seeks
and is entitled to partial summary judgment in his favor with
respect to Plaintiffs' claims (and any related cross
claims) for wages that became due before he joined ConnectEDU
or after he was fired. This disposes of Marie DeMego's
claims for commissions in 2012 and of 'Plaintiffs'
claims for accrued but unpaid vacation time. Plaintiffs seek
summary judgment against Nisonson with respect to commissions
that became due and payable while he worked for ConnectEDU.
That part of Plaintiffs' motion must be denied because
those claims turn on disputed issues of material fact.
is entitled to summary judgment as to DeMego's claim for
2012 commissions because those amounts all became due on or
before March 15, 2013, and it is undisputed the Nisonson did
not start working for ConnectEDU until May 16, 2013. DeMego
claims that the commission amounts she was paid in November
2012 and March 2013, for the third and fourth quarters of
2012, were too low. But Nisonson cannot be held liable for
that, because he had not yet joined the company. Plaintiffs
have not produced any evidence that Nisonson was personally
involved in, or even that he had ultimate responsibility for,
any decision made after Nisonson's arrival to withhold
commissions claimed by DeMego. Nothing in the Wage Act or in
appellate decisions construing the statute indicates that
someone newly hired as the president of the company becomes
personally liable on their first day on the job for all wages
that were allegedly earned but not paid before that time.
is also entitled to summary judgment as to Plaintiffs'
claims for unpaid vacation time because those amounts did not
become due until after Nisonson had been fired and left the
company. It is undisputed that Plaintiffs were not entitled
to be paid for accrued vacation time until their employment
was terminated on April 28, 2014. It is also undisputed that
Nisonson was fired several hours before other employees and
that he had no personal involvement in the decision to fire
others or not to pay out the former employee's accrued
vacation. Since Nisonson was no longer president at the time
those sums became due and payable, he cannot be held
personally liable under the Wage Act. Cf. G.L.c. 149, §
make the policy argument that managers of a corporation
should not be able to escape personal liability under the
Wage Act by arranging to be fired on the eve of a bankruptcy
filing before employees have been compensated for accrued but
unpaid leave. But they point to no evidence that Nisonson
somehow conspired to get fired in order to cutoff personal
liability under the Wage Act. And, in any case, the Court may
not rewrite the statute in order to eliminate a potential
loophole in the personal liability provision. See generally
Provencal v. Commonwealth Health Ins. Connector
Auth., 456 Mass. 506, 516, 924 N.E.2d 689 (2010) (courts
may not " read into the statute a provision which the
Legislature did not see fit to put there, whether the
omission came from inadvertence or of set purpose")
quoting General Elec. Co. v. Department of Envtl.
Protection, 429 Mass. 798, 803, 711 N.E.2d 589 (1999)).
Plaintiffs claim that they are owed commissions for sales
made in 2013 and 2014 cannot be resolved on a motion for
summary judgment. A Commission is subject to the Wage Act
once it " has been definitely determined and has become
due and payable." G.L.c. 149, § 148. In this case
there are disputed issues of fact regarding what commissions
if any are owed for 2013 and 2014, whether and when such
commissions could be definitely determined, and whether and
when they became due and payable.