In July 2008, the Massachusetts Legislature amended Massachusetts General Laws ch. 149, § 150 (Payment of Wages Act) to make treble damages mandatory for all state wage and hour law violations. The legislation was in reaction to a 2005 SJC ruling, which found that, as drafted, the statute permitted treble damages awards only in those situations involving “willful misconduct” by the employer. Under the amendment, treble damages are required even if the employer made an inadvertent error or acted in the good faith but mistaken belief that its conduct complied with the statute.
Since the amendment, however, there has been substantial disagreement as to whether the amendment should be applied retroactively to mandate treble damages in actions arising from conduct that occurred before the effective date of the amendment.
In a 2008 decision issued by a Superior Court judge in Pantano v. Artificial Life, Inc., the Court held that the amendment should not be applied retroactively. The Pantano Court looked to the well established legal principle that an amendment that substantially changes parties’ rights and expectations should only be applied retroactively where the statute specifically provides for it or where the context indicates that the Legislature intended for the amendment to be applied retroactively. The Court determined that the amendment to the Payment of Wages Act met neither criteria and therefore should not be applied retroactively.
In a more recent Superior Court decision, Rosnov v. Malloy, a Superior Court judge found differently by applying the amendment retroactively. The Court in this case, however, did not consider the two alternate requirements under Massachusetts law discussed in Pantano for applying a statute retroactively. Instead, the Court relied solely on the incorrect assumption that “violators of the Wage Act have always been subject to treble damages” in reaching its decision that the amendment did not “substantially change parties [sic] rights and expectations.” In fact, treble damages were added in 1993. In reaching its conclusion, the Rosnov Court ignored the substantial change in employers’ rights caused by the mandatory treble damages law.
These conflicting decisions would appear to create some uncertainty as to the application of mandatory treble damages to wage claims arising from pre-amendment violations. Until a Massachusetts appellate court addresses this specific issue, employers defending state wage and hour claims will have to face the possibility of treble damages for conduct that occurred prior to the enactment of the statute’s amendment.