In Rosnov v. Molloy, the Massachusetts Supreme Judicial Court (SJC) held that a statute mandating automatic treble damages for most violations of the Commonwealth’s wage and hour laws only applies to conduct occurring after its effective date of July 12, 2008.  In so holding, the SJC refused to apply the amended treble damages statute retroactively, rejecting a position advanced by the plaintiffs’ bar that mandatory treble damages should be available to plaintiffs for violations of the state’s wage and hour laws even before the new law became effective. 

Attorney Rosnov was briefly associated with the Law Offices of John Molloy.  After resigning from Molloy’s firm, Rosnov alleged that Molloy orally agreed to pay her referral fees which she never received and sued for nonpayment of wages.  The Massachusetts Superior Court found Molloy automatically liable for treble damages pursuant to the July 12, 2008 amendment even though his alleged misconduct predated that amendment.  Molloy appealed that holding and successfully petitioned the SJC for direct appellate review.

Molloy argued before the SJC that the amended treble damages statute could not apply retroactively for two reasons.  First, prior SJC decisions held that statutory changes to parties’ substantive rights can only be made on a prospective basis, whereas mere procedural or remedial legislation may apply retroactively.  The SJC agreed that the amendment affected parties’ substantive rights, holding that the amendment “effected a critical change in the language of the statute, removing the provision that treble damages ‘may’ be awarded, and replacing it with the directive that treble damages ‘shall’ be awarded.”  Noting that “only a potential for treble damages existed before,” the SJC reasoned that the amendment affected defendants’ substantive rights because it created a “marked increase” in liability.

Molloy further argued that the amendment’s legislative history bore no indication that the legislature intended retroactive application.  The SJC agreed, holding that language suggesting retroactive application was actually stricken from the bill before its enactment and noting that courts presume such “deletion[s] to have been intentional.”  Noting that the legislature’s “intent on the retroactivity issue is murky” at best, the SJC found that Rosnov failed to present the “unequivocally clear” evidence of legislative intent necessary to support a finding of retroactivity given the marked change in substantive rights effected by the amendment.

Employers defending Massachusetts wage and hour claims involving allegations prior to July 12, 2008, may now rely on this decision to reduce exposure.  However, this decision does not insulate defendants from treble damages before the amendment became effective if the plaintiff proves that the employer’s conduct was “outrageous, because of the defendant’s evil motive or his reckless indifference to the rights of others.”  Wiedmann v. Bradford Group, 444 Mass. 698, 710 (2005).  For violations after July 12, 2008, the mandatory treble damages amendment will apply, subject to a possible constitutional challenge that the court in Rosnov did not reach.