Janice GORDON et al.
CONNECTED LIVING et al.
MEMORANDUM OF DECISION AND ORDER ON DEFENDANTSâ
MOTION FOR SUMMARY JUDGMENT
Rosalind H. Miller, Justice Superior Court
plaintiffs Janice Gordon and Thomas Racca bring this action
for retaliation against the defendants Connected Living and
its Chief Executive Officer, Sarah Hoit (Count I). The
plaintiffs also bring claims for tortious interference
against Hoit (Count III) and breach of the implied covenant
of good faith and fair dealing against Connected Living
(Count IV). Racca separately alleges that Connected Living
breached its employment agreement with him (Count II). The
matter is now before the Court on the defendantsâ motion for
partial summary judgment on Counts I, III, and IV. For the
reasons that follow, the defendantsâ motion is
following facts are undisputed.
Living ("CL") is a company that sells services and
technology designed to connect seniors to their families and
friends. The company was co-founded by Christopher McWade and
Sarah Hoit, and Hoit serves as its CEO. CL is governed by a
board of directors on which, during all relevant times, both
McWade and Hoit were members.
2010, CL received a federal grant to establish broadband
technology at affordable housing communities. When the
technology was installed, CL developed the "Connected
Living Center" ("the Call Center") which was
an 800 number help-line which clients could call seven days a
week for any type of support. As operations grew, CL tasked
specific staff with ensuring coverage of the Call Center. CL
classified all employees, including those that worked for the
Call Center, as exempt workers and paid them a salary.
2012, Racca joined CL as a consultant to work on strategic
marketing, publicity and sales efforts, and streamlining
product priorities. After a few months as a consultant, CL
hired Racca as its Chief Operating Officer. The parties
executed an employment agreement and Racca began his position
as COO on September 4, 2012.
Racca authored a 100-day plan for the company and began
assessing its strengths and challenges. During his review of
company operations, he learned that CLâs then Executive Vice
President of Sales had not been paid long accrued commissions
by CL. He raised this issue with CLâs Comptroller Patti
Holbrook who was not aware of the legal implications. Racca
then sought to have two other personnel issues reviewed.
October 2012, Racca reached out to Gordon, a colleague with
knowledge and experience in human resources, to do a
preliminary review of CLâs organizational structure to ensure
CL was in compliance with federal and state employment laws.
Gordon interviewed Holbrook and Neil Sullivan, Vice President
of Customer Experience and Social Impact, as part of her
review. During her interview with Holbrook, Gordon expressed
her concern that CL employees who took customer service calls
after hours could pose a risk to the company due to potential
violations of the wage and overtime laws. Holbrook advised
Gordon that the employees were classified as exempt and
therefore did not receive overtime.
on her interviews, Gordon drafted a "Human Resources
Primary Review" in which she outlined a number of HR
practices that appeared to fall short of best practices from
a compliance perspective as well as issues with accounting
and management of sales commissions that could expose CL to
legal risks. The report noted that CL did not consistently
track employeesâ vacation and personal time. With regard to
salary classifications, the report stated: "Salary job
classifications-out of compliance: This presents a potential
high legal risk and substantial fines can be imposed for
violations of appropriate payment of overtime for nonexempt
(FLSA) employees. CLC employees in particular fall into this
January 2013, Gordon joined CL as Vice President of Corporate
Organization and Development. After being hired, Gordon
researched the potential misclassification of CLs employees
on the Department of Labors website. She also reviewed
employeesâ offer letters and discussed their job
responsibilities with their respective bosses. Gordon told
Racca that she believed two employees, Darren Noisette and
Bridgette David, were misclassified as exempt employees.
was a salaried employee for CL who was also required to
answer calls for the Call Center between 6:00 p.m. and 9:00
p.m. She was not compensated for those additional hours. In
March 2013, Gordon spoke with David about her work hours and
compensation. David told Gordon that she felt it was a
"burden" to take calls at night on the weekends.
Noisette and some other employees also had concerns about
working twelve-hour days. After Gordon discussed the matter
with Racca, Racca told her that he raised the issue
previously with McWade and Hoit in October 2012, and they
told him that these employees were exempt and therefore not
paid overtime. Gordon then met with Hoit and strongly
suggested that she look into Davidâs classification. Hoit did
not believe it was necessary to do so. During a subsequent
meeting with Hoit and Racca, Gordon again raised her
concerns. Thereafter, David was informed that CL would not
raise her salary.
April 2013, Gordon reviewed the list of employees eligible to
receive health and dental insurance through CL. She
discovered that since 2011, the Chairman of CLâs Board of
Directors Lawrence Rosenfeld was listed as a covered employee
and receiving full health benefits for his family. Rosenfeld,
however, was not an active employee eligible for insurance
based on the contract CL had with its insurer. Gordon spoke
with Holbrook about this discovery, and Holbrook admitted she
was unaware of the arrangement. Gordon raised her concerns
with Hoit, but Rosenfeld continued to receive health
benefits. Gordon then contacted CLâs insurance broker who
confirmed that Rosenfeld was not supposed to be receiving
health insurance and told Gordon that the arrangement was in
violation of the Massachusetts Fair Share Contribution laws.
Gordon forwarded this information to Racca who spoke with
McWade and Hoit about the issue and then with Rosenfeld
directly to no avail. Gordon then refused to sign the
insurance renewal application confirming a list of eligible
employees that included Rosenfeld.
2, 2013, Racca attended a CL Board meeting. The parties
dispute what happened at the board meeting, but one member of
the board testified that after hearing the issues Racca
raised at the board meeting, he felt "vulnerable"
to personal liability as a fiduciary of the company. He
recommended that Hoit be promoted to Chairman and that Racca
assume the position of CEO ...