On August 12, 2013, the Massachusetts Supreme Judicial Court (SJC) ruled that the state Wage Act does not preempt common law claims for unpaid wages. Employers may therefore be liable to employees for unpaid wages for up to six years, under breach of contract or similar theories.
The plaintiff in Lipsitt v. Plaud worked as the director of an unsuccessful museum, which ultimately closed in the summer of 2007. The plaintiff and the museum’s owner had agreed to a monthly salary, but the museum was never able to pay the full amount. The plaintiff filed suit in 2010 against the museum and its owner, alleging violations of the Massachusetts Wage Act, as well as common law claims for breach of contract, quantum meruit, and fraud and deceit.
The defendants moved to dismiss the common law claims, arguing that the Wage Act was the sole method by which employees can recover unpaid wages. The trial court judge agreed, finding that the Wage Act “created a comprehensive vehicle for recovering unpaid wages,” preempting all other claims. However, the SJC reversed. Even though the Wage Act was a “comprehensive” statute, the SJC held it was designed to enhance employees’ already existing right to recover unpaid wages through breach of contract or similar claims, and therefore did not exclude or preempt them.
As a result, Massachusetts employees seeking allegedly unpaid wages may now avail themselves of the longer statutes of limitation applicable to common law claims. Indeed, the limitations period for contract claims in Massachusetts is six years, double the three-year period for claims under the Wage Act.