Employment Agreement Requires Employee to Bring Massachusetts Wage Act in New York

The Massachusetts Supreme Judicial Court recently upheld a forum selection clause in an employment contract requiring an employee to bring his employment claims in New York courts. In Melia vs. Zenhire, Inc., SJC-10959, (May 8, 2012), the employee brought a Massachusetts Wage Act claim for unpaid salary in Massachusetts Superior Court. Judge Troy dismissed the case on request of the employer due to the forum selection clause, reasoning that the plaintiff could bring his case in New York. After initial appeal, the SJC took the case and held the following:

[W]e now recognize a presumption that forum selection clauses are enforceable with respect to Wage Act claims. A party seeking to rebut this presumption must produce some evidence indicating that (1) the Wage Act applies; (2) the selected forum’s choice-of-law rules would select a law other than that of Massachusetts; and (3) application of the selected law would deprive the employee of a substantive right guaranteed by the Wage Act. On the introduction of such evidence, the proponent of the forum selection clause would retain the ultimate burden of demonstrating that the clause does not operate as a “special contract.”

The Massachusetts Wage Act prohibits “special contracts” that would operate to allow an employer to escape or evade the provisions of the Act. A “special contract” does not have to be a separate contract, but can be a provision in an employment or other agreement that, if enforced, would deprive an employee of his Wage Act rights.

A forum selection clause will also be unenforceable if procured with “fraud, duress, the abuse of economic power, or any other unconscionable means,” according to the SJC, but from now on they will be valid unless the employee meets the three conditions (set forth above) required to overturn a forum selection clause in a Wage Act case.