Monday, March 17, 2008

Letter to the editor

Mandating triple damages: Another impediment to business

By John R. Regan

As the largest employer association in Massachusetts, representing more than 7,000 members with 680,000 employees in the Bay State, Associated Industries of Massachusetts knows that Philip Gordon misrepresents the pending legislation to mandate treble damages in judgments against employers for nonpayment of wages and the circumstances it purports to address ("Earned wage legislation is good for Bay State businesses," March 7).

Mr. Gordon makes the issue seem simple by assuming his conclusion: nonpayment is inherently outrageous in every case. The Supreme Judicial Court (SJC) ruled that "treble damages are punitive in nature . . . appropriate where conduct is outrageous, because of the defendant's evil motive or his reckless indifference to the rights of others." But he says, "There is no excuse to justify the far-reaching effects of missed payrolls with payroll services, accountants and easy-to-use software" -- in other words, there is no such thing as a mistake or a difference of opinion. We don't believe that, and we doubt that he does.

These cases are often different from the simple refusal to pay an agreed-upon wage that Mr. Gordon posits -- they may involve questions of who is the actual employer, whether overtime applies, or the status of commissions and bonuses. Moreover, the pending legislation does not "restore" a requirement to provide triple damages to employees who win a lawsuit to recover unpaid wages; it overturns the SJC's decision that no such requirement existed. Some judges may have believed, as Gordon claims, that the treble damages were mandatory, but he is obviously wrong to suggest that there was no pushback from employers -- one of them, after all, fought the appeal up to the SJC.

Mr. Gordon is, by his own admission, someone who regards "good faith" as a "loophole." Such a person should not be lecturing us on the morality of standard business practices that are in accord with state law and the federal Fair Labor Standards Act.

John R. Regan, Executive VP, Government Affairs, Associated Industries of Massachusetts