George v. National Water Main Cleaning Co.

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SJC-12191
ROBERT GEORGE & others1 vs. NATIONAL WATER MAIN CLEANING
COMPANY & others.2
Suffolk. February 14, 2017. - June 26, 2017.
Present: Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ.
Supreme Judicial Court, Certification of questions of law.
Massachusetts Wage Act. Labor, Wages, Failure to pay
wages, Damages. Damages, Interest. Interest. Judgment,
Interest. Practice, Civil, Interest, Judgment, Damages.
Certification of a question of law to the Supreme Judicial
Court by the United States District Court for the District of
Massachusetts.
Adam J. Shafran (Jonathon D. Friedmann also present) for
the plaintiffs.
Richard L. Alfred (Dawn Reddy Solowey & Anne S. Bider also
present) for the defendants.
1
Michael Curvin, Mark Bassett, Kevin Colvin, Justin Kordas,
Carlos Villarreal, Paul Dockett, Jon Eldridge, Chris Myers, Zef
Zeka, Paul LeDoux, Erik Paiva, Jeffrey David, and Chris
Mirisola, individually and on behalf of all others similarly
situated.
2
Carylon Corporation, Dennis Sullivan, Antonino
LaFrancesca, and Carl Cummings.
2
John Pagliaro & Martin J. Newhouse, for New England Legal
Foundation, amicus curiae, submitted a brief.
Annette Gonthier Kiely, Kathy Jo Cook, Thomas R. Murphy, &
Timothy J. Wilton, for Massachusetts Academy of Trial Attorneys,
amicus curiae, submitted a brief.
GANTS, C.J. Several employees of National Water Main
Cleaning Company filed a class action suit against the company
and its parent company, Carylon Corporation, in the Superior
Court, alleging, among other claims, nonpayment of wages in
violation of the Massachusetts Wage Act, G. L. c. 149, §§ 148,
150 (Wage Act). After the case was removed to the United States
District Court for the District of Massachusetts, the judge
granted final approval of a class settlement agreement that
resolved all outstanding issues except one question of law. To
resolve that question, the judge certified to this court the
following question pursuant to S.J.C. Rule 1:03, as appearing in
382 Mass. 700 (1981):
"Is statutory interest pursuant to [G. L. c. 231, § 6B
or 6C,] available under Massachusetts law when liquidated
(treble) damages are awarded pursuant to [G. L. c. 149,
§ 150]?"
In answer to the question, we declare that, under Massachusetts
law, statutory prejudgment interest pursuant to G. L. c. 231,
§ 6H, shall be added by the clerk of court to the amount of lost
wages and other benefits awarded as damages pursuant to G. L.
c. 149, § 150, but shall not be added to the additional amount
of the award arising from the trebling of those damages as
3
liquidated damages.3
Interpretation of the certified question. Before we answer
the certified question, which the judge issued at the joint
request of the parties, we must first ascertain its meaning.
The question is an inquiry into the availability of statutory
interest pursuant to two statutes: G. L. c. 231, § 6B, which
directs the clerk of court to add interest at the rate of twelve
per cent per year to awards of judgment "for personal injuries
to the plaintiff or for . . . damage to property"; and G. L.
c. 231, § 6C, which directs the clerk to add interest at the
same twelve per cent rate to awards of judgment "[i]n all
actions based on contractual obligations." The parties appear
to treat the certified question essentially as two questions:
first, whether Wage Act claims fall within the scope of either
§ 6B or § 6C, and second, if they do, whether prejudgment
interest should be added to the award of damages for lost wages
and other benefits where § 150, as amended in 2008, provides for
the trebling of those damages and characterizes such an award as
"liquidated damages." We decline to answer the first of these
questions because, even if prejudgment interest could not be
added to Wage Act awards under § 6B or § 6C, it plainly could be
3
We acknowledge the amicus briefs submitted by the New
England Legal Foundation and the Massachusetts Academy of Trial
Attorneys.
4
added under G. L. c. 231, § 6H, which declares that interest at
the rate of twelve per cent per year shall be added to the award
of damages "[i]n any action in which damages are awarded, but in
which interest on said damages is not otherwise provided by
law." The question we shall answer, which we consider to be the
true gist of the certified question, is whether the Legislature,
when it amended § 150 in 2008 to require the award of treble
damages on Wage Act judgments and characterized the award as
"liquidated damages," intended that prejudgment interest not be
added to any part of this award because such interest was
included within the scope of "liquidated damages."4 See Tyler v.
Michaels Stores, Inc., 464 Mass. 492, 499 n.12 (2013) (declining
to limit answer to narrow confines of certified question where
broader discussion was necessary to articulate law regarding
issue presented).
4
We note from the record that the parties initially had
agreed that the unresolved legal issue in their settlement
agreement would be resolved through this court's answer to the
certified question in Travers v. Flight Servs. & Sys., Inc., 808
F.3d 525, 551 (1st Cir. 2015), which asked: "Did [G. L. c. 149,
§ 150,] impliedly repeal [G. L. c. 231, § 6B,] as to cases in
which a party was awarded liquidated damages under § 150 and is
eligible for prejudgment interest under § 6B, such that the
award of prejudgment interest is precluded?" That resolution
became impossible when the Travers case settled and the
certified question was withdrawn. That certified question
assumed that an award under the Massachusetts Wage Act, G. L.
c. 149, § 150 (Wage Act), would include prejudgment interest
under § 6B unless the Legislature had impliedly repealed that
provision as applied to Wage Act awards.
5
Discussion. The Wage Act was enacted "to protect wage
earners from the long-term detention of wages by unscrupulous
employers." Melia v. Zenhire, Inc., 462 Mass. 164, 170 (2012),
quoting Cumpata v. Blue Cross Blue Shield of Mass., Inc., 113 F.
Supp. 2d 164, 167 (D. Mass. 2000). Employers violate the Wage
Act when they fail to pay "each . . . employee the wages earned"
and when they fail to do so within the time period set by
statute. See G. L. c. 149, § 148.
Before the 2008 amendment, G. L. c. 149, § 150, provided
that an aggrieved employee may initiate "a civil action for
. . . any damages incurred, including treble damages for any
loss of wages and other benefits" and, if he or she prevails,
"shall be entitled to an award of the costs of the litigation
and reasonable attorney fees." St. 2005, c. 99, § 2. In
Wiedmann v. The Bradford Group, Inc., 444 Mass. 698, 709 (2005),
we noted that the text of this statute "states only that a
plaintiff 'may' institute a suit for damages that includes a
request for treble damages," and concluded that "there is
nothing in the plain language of the statute that requires an
award of treble damages." We declined to require a judge to
award treble damages to a prevailing plaintiff where the plain
language of § 150 did not require it, and declared that the
award of treble damages in Wage Act cases was a decision left to
the discretion of the judge. Id. at 710. This conclusion was
6
similar to the conclusion we reached in Goodrow v. Lane Bryant,
Inc., 432 Mass. 165, 178-179 (2000), where we rejected the
argument that the award of treble damages was mandatory once a
plaintiff requested such an award for an employer's failure to
pay required overtime compensation, in violation of G. L.
c. 151, § 1B. Wiedmann, supra. We noted that we had declared
in Goodrow that "treble damages are punitive in nature, allowed
only where authorized by statute, and appropriate where conduct
is 'outrageous, because of the defendant's evil motive or his
reckless indifference to the rights of others.'" Wiedmann,
supra, quoting Goodrow, supra at 178.
Three years after we decided Wiedmann, the Legislature
"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.'" Rosnov v. Molloy, 460 Mass. 474, 479 (2011). Under
G. L. c. 149, § 150, as amended through St. 2008, c. 80, § 5,
where an aggrieved employee prevails in a civil action seeking
damages under the Wage Act, the employee "shall be awarded
treble damages, as liquidated damages, for any lost wages and
other benefits and shall also be awarded the costs of the
litigation and reasonable attorneys' fees."5 By its plain
5
General Laws c. 149, § 150, provides, in pertinent part:
7
language, the 2008 amendment to § 150 mandates the award of
treble damages for lost wages and benefits once an aggrieved
employee prevails on a Wage Act claim; the plaintiff no longer
need show that the defendant's conduct was "outrageous" to
obtain such an award.
The 2008 amendment did more than mandate the award of
treble damages to a prevailing plaintiff in a Wage Act case; it
characterized the treble damages "as liquidated damages." The
"An employee claiming to be aggrieved by a violation
of [G. L. c. 149, § 33E, 52E, 148, 148A, 148B, 148C, 150C,
152, 152A, 159C, or 190, or G. L. c. 151, § 19,] may,
[ninety] days after the filing of a complaint with the
attorney general, or sooner if the attorney general assents
in writing, and within [three] years after the violation,
institute and prosecute in his own name and on his own
behalf, or for himself and for others similarly situated, a
civil action for injunctive relief, for any damages
incurred, and for any lost wages and other benefits;
provided, however, that the [three-]year limitation period
shall be tolled from the date that the employee or a
similarly situated employee files a complaint with the
attorney general alleging a violation of any of these
sections until the date that the attorney general issues a
letter authorizing a private right of action or the date
that an enforcement action by the attorney general becomes
final. An employee so aggrieved who prevails in such an
action shall be awarded treble damages, as liquidated
damages, for any lost wages and other benefits and shall
also be awarded the costs of the litigation and reasonable
attorneys' fees."
General Laws c. 149, § 150, also provides that "[t]he attorney
general may make complaint or seek indictment against any person
for a violation of [§ 148]," an additional enforcement mechanism
not at issue in this case. See Melia v. Zenhire, Inc., 462
Mass. 164, 170 (2012) ("Wage Act provides for both public and
private enforcement").
8
crux of this appeal is to ascertain what the Legislature
intended by this characterization. The defendants contend that
the inclusion of this phrase reflects the intent of the
Legislature that, apart from the award of reasonable attorney's
fees and the costs of litigation, the judgment in favor of a
prevailing plaintiff shall be limited to three times the amount
of lost wages and benefits; it shall not include any prejudgment
interest, whether under § 6B, 6C, or 6H, because prejudgment
interest is included within the award of liquidated damages.
The plaintiff contends that the inclusion of this phrase
reflects the intent of the Legislature that treble damages be
treated as compensatory in nature, rather than punitive, and
does not reflect an intent to deprive employees of prejudgment
interest they would otherwise be due as a matter of statute for
their lost wages and benefits.
"Liquidated damages" is a term derived from contract law to
identify the amount of damages that the parties agree must be
paid in the event of a breach. See Cochrane v. Forbes, 267
Mass. 417, 420 (1929) ("Liquidated damages . . . mean damages,
agreed upon as to amount by the parties, or fixed by operation
of law, or under the correct applicable principles of law made
certain in amount by the terms of the contract, or susceptible
of being made certain in amount by mathematical calculations
. . ."). See also 24 R.A. Lord, Williston on Contracts § 65:1
9
(4th ed. 2002). "A liquidated damages provision will usually be
enforced, provided two criteria are satisfied: first, that at
the time of contracting the actual damages flowing from a breach
were difficult to ascertain; and second, that the sum agreed on
as liquidated damages represents a 'reasonable forecast of
damages expected to occur in the event of a breach.'" NPS, LLC
v. Minihane, 451 Mass. 417, 420 (2008), quoting Cummings Props.,
LLC v. National Communications Corp., 449 Mass. 490, 494 (2007).
"Where damages are easily ascertainable, and the amount provided
for is grossly disproportionate to actual damages or
unconscionably excessive, the court will award the aggrieved
party no more than its actual damages." NPS, LLC, supra.
The term is used in the damages provision of the Federal
Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b), which
provides, "Any employer who violates the provisions of [§ 206 or
207] of this title shall be liable to the employee or employees
affected in the amount of their unpaid minimum wages, or their
unpaid overtime compensation, as the case may be, and in an
additional equal amount as liquidated damages." The United
States Supreme Court has declared that liquidated damages under
the FLSA "are compensation, not a penalty or punishment by the
[g]overnment." Overnight Motor Transp. Co. v. Missel, 316 U.S.
572, 583 (1942). "The retention of a workman's pay may well
result in damages too obscure and difficult of proof for
10
estimate other than by liquidated damages." Id. at 583-584.
Liquidated damages under the FLSA "constitute[] a Congressional
recognition that failure to pay the statutory minimum on time
may be so detrimental to maintenance of the minimum standard of
living 'necessary for health, efficiency and general well-being
of workers' and to the free flow of commerce, that double
payment must be made in the event of delay in order to insure
restoration of the worker to that minimum standard of well-
being" (footnote omitted). Brooklyn Sav. Bank v. O'Neil, 324
U.S. 697, 707 (1945).
Although the legislative history is silent regarding the
Legislature's purpose in characterizing treble damages as
"liquidated damages" in the 2008 amendment to the Wage Act, we
infer that the Legislature knew that
 the FLSA had characterized the "additional equal amount" of
unpaid minimum wages and unpaid overtime compensation as
"liquidated damages";
 the United States Supreme Court had regarded liquidated
damages as compensatory in nature rather than punitive; and
 the characterization of treble damages as "liquidated
damages" could be used to defend an award of treble damages
from the constitutional challenge that such an award was
punitive in nature and therefore required a finding that
the employer's conduct had been "outrageous." See
Matamoros v. Starbucks Corp., 699 F.3d 129, 140 (1st Cir.
2012) (defendant employer's argument that treble damages
under Wage Act violate due process in absence of finding of
employer "reprehensibility" was "misplaced" because, "[b]y
definition, . . . liquidated damages are not punitive
damages").
11
The defendants contend that we should make one further
inference: that, by characterizing treble damages as
"liquidated damages" under the Wage Act, the Legislature
intended to adopt Federal law and preclude a plaintiff from
receiving any prejudgment interest on the award, including the
award of lost wages and benefits. We conclude that this is one
inference too far.
We recognize that the Supreme Court has declared that
Congress, by providing an award of liquidated damages under the
FLSA, "meant to preclude recovery of interest on minimum wages
and liquidated damages." Brooklyn Sav. Bank, 324 U.S. at 715-
716. The Court described "liquidated damages" as "compensation
for delay in payment of sums due under the [FLSA]." Id. at 715.
Consequently, according to the Court:
"Since Congress has seen fit to fix the sums recoverable
for delay, it is inconsistent with Congressional intent to
grant recovery of interest on such sums in view of the fact
that interest is customarily allowed as compensation for
delay in payment. To allow an employee to recover the
basic statutory wage and liquidated damages, with interest,
would have the effect of giving an employee double
compensation for damages arising from delay in the payment
of the basic minimum wages. . . . Allowance of interest on
minimum wages and liquidated damages recoverable under § 16
(b) tends to produce the undesirable result of allowing
interest on interest." (Citation omitted.)
Id.
We are not persuaded that the Legislature shared the
Congressional intent in this regard. When the FLSA was enacted,
12
there was no Federal statute generally mandating the payment of
prejudgment interest. See Milwaukee v. Cement Div., Nat. Gypsum
Co., 515 U.S. 189, 194 (1995). The payment of prejudgment
interest in Federal court, in the absence of a statute regarding
prejudgment interest, "is governed by traditional judge-made
principles." Id. In contrast, as noted earlier, the payment of
prejudgment interest in a Massachusetts court is governed by
statute, either G. L. c. 231, § 6B, 6C, or 6H. The enactment of
§ 6H, St. 1983, c. 652, § 1, mandating the payment of
prejudgment interest where "not otherwise provided by law,"
reflects the Legislature's intent that prejudgment interest
always be added to an award of compensatory damages.
Where § 6H provides for the award of prejudgment interest
whenever compensatory damages are awarded, an interpretation of
§ 150, as amended, that would preclude the payment of
prejudgment interest on the award of lost wages and benefits
under the Wage Act would be an implied repeal of § 6H with
respect to Wage Act awards. Under our "long standing rule of
statutory interpretation," the implied repeal of a statute by a
subsequent statute has "never been favored by our law."
Commonwealth v. Hayes, 372 Mass. 505, 511 (1977), quoting
Commonwealth v. Bloomberg, 302 Mass. 349, 352 (1939). Where two
statutes appear to be in conflict, we do not mechanically
determine "that the more 'recent' or more 'specific' statute
13
. . . trumps the other." Commonwealth v. Harris, 443 Mass. 714,
725 (2005). Instead, we "endeavor to harmonize the two statutes
so that the policies underlying both may be honored." Id. "[A]
statute is not to be deemed to repeal or supersede a prior
statute in whole or in part in the absence of express words to
that effect or of clear implication." Id., quoting Hayes, supra
at 512. Repeal is not clearly implied "[u]nless the prior
statute is so repugnant to and inconsistent with the later
enactment that both cannot stand." Hayes, supra at 511.
Here, amended § 150 is in conflict with § 6H only if we
conclude that the Legislature intended the trebled "liquidated
damages" to incorporate all prejudgment interest. But, because
we disfavor implied repeal, we may reach that conclusion only if
§ 150 expressly states that "liquidated damages" includes all
prejudgment interest or otherwise negates the entitlement in
§ 6H to prejudgment interest (which it does not), or if the
addition of prejudgment interest to an award of lost wages and
benefits is clearly inconsistent with the characterization of
treble damages as "liquidated damages" (which it is not).
Before § 150 was amended in 2008, an aggrieved employee who
prevailed on a Wage Act claim was entitled to prejudgment
interest on an award of lost wages and benefits. See, e.g.,
DeSantis v. Commonwealth Energy Sys., 68 Mass. App. Ct. 759,
768, 771 (2007) (upholding award of prejudgment interest on
14
damages for lost wages and benefits under Wage Act). Where the
employer's conduct was so outrageous as to justify punitive
damages, prejudgment interest would not be added to the trebled
punitive damages award, but the award of punitive damages did
not mean the deprivation of prejudgment interest on the award of
lost wages and benefits. Cf. McEvoy Travel Bur., Inc. v. Norton
Co., 408 Mass. 704, 717 & n.9 (1990) (prejudgment interest added
to actual damages in G. L. c. 93A judgment, but not to multiple
punitive damages). There is nothing in the legislative history
of the 2008 amendment of § 150 to suggest that the Legislature
intended to deprive an employee of prejudgment interest on lost
wages and benefits when it characterized what had been punitive
damages as liquidated damages. To do so would mean that an
employee who was deprived of wages and benefits because of the
outrageous conduct of his or her employer would receive the same
treble damages under the amended § 150 as he or she would have
obtained before the amendment, albeit as liquidated damages
rather than punitive damages, but would obtain a lesser judgment
because of the preclusion of prejudgment interest. Section 6H
may be read in harmony with the amended § 150 simply by
recognizing that the Legislature intended no change in the
payment of prejudgment interest.6
6
Because we recognize that the Legislature intended no
15
Nor is there anything in the legislative history to suggest
that the Legislature intended that the amended § 150 mirror the
FLSA with respect to "liquidated damages." We can infer that
the Legislature did not intend the Wage Act fully to replicate
the FLSA because it declined to adopt a good faith exception to
the Wage Act's mandatory damages requirement. As a result of
the Portal-to-Portal Act, 29 U.S.C. § 260 (1947), liquidated
damages under the FLSA must be remitted "if the employer shows
to the satisfaction of the court that the act or omission giving
rise to such action was in good faith and that he had reasonable
grounds for believing that his act or omission was not a
violation of the [Act]." See Reich v. Southern New England
Telecomm. Corp., 121 F.3d 58, 70-71 (2d Cir. 1997). By
contrast, following the passage of the 2008 amendment to the
Wage Act, the Legislature declined to accept the Governor's
change in the payment of prejudgment interest, we also conclude
that the Legislature did not intend that prejudgment interest be
awarded on the liquidated portion of the award of damages. If
it did, an employee under the amended § 150 who was deprived of
wages because of a good faith error by the employer would obtain
a significantly larger judgment than he or she would have
obtained before the amendment where the deprivation of wages
arose from the employer's outrageous conduct, because
prejudgment interest would be added to the "liquidated damages"
portion of the award but it would not have been added to the
punitive damages portion of the award under the previous version
of the statute. Under the amended § 150, prejudgment interest
is to be calculated based on the portion of damages reflecting
lost wages and benefits alone. The plaintiff does not contend
that the class members are entitled to prejudgment interest
beyond this.
16
proposed amendments -- similar to those in the Portal-to-Portal
Act -- that would have allowed an exception to mandatory treble
damages for employers who violated the Wage Act in good faith.
See Rosnov, 460 Mass. at 482 n.9. The amended § 150 became law
without the Governor's signature. Id.
Moreover, prejudgment interest and § 150 damages are
different in kind and accomplish distinctly different purposes.
Prejudgment interest is not generally included within
"liquidated damages" under our common law of contract. In fact,
prejudgment interest is not even a category of damages; where
liquidated damages are awarded in a civil contract action,
prejudgment interest is added to the award of liquidated
damages. See Sterilite Corp. v. Continental Cas. Co., 397 Mass.
837, 840 (1986) (prejudgment interest under G. L. c. 231, § 6C,
paid on both liquidated and unliquidated damages); Cochrane v.
Forbes, 267 Mass. 417, 420 (1929) (under common law, prejudgment
interest on liquidated damages runs from date of demand).
Prejudgment interest is awarded to compensate a plaintiff
for the depreciation of the eventual recovery arising from the
often substantial delay between the commencement of the action
and the judgment. See Smith v. Massachusetts Bay Transp. Auth.,
462 Mass. 370, 375 (2012). In the context of a violation of the
Wage Act, "liquidated damages" properly would include the
various additional costs that might be incurred by an employee
17
who has not been timely paid his or her full wages, but who
still needs to pay for the family's housing, transportation,
food and clothing, tuition, and medical expenses. The damages
arising from delay in paying the wages due might be
considerable, depending on the employee's circumstances, but
they would be difficult to quantify with precision. In
contrast, prejudgment interest on the amount of lost wages and
benefits is simple to quantify, and would not properly be a
subject of "liquidated damages."
In short, we conclude that the Legislature's
characterization of treble damages as "liquidated damages" in
the 2008 amendment to § 150 was not intended to produce any
change in the award of prejudgment interest in Wage Act
judgments. Prejudgment interest is still to be added to the
amount of lost wages and benefits, and is still not to be added
to the trebled portion of the judgment that previously had been
punitive damages and is now characterized as liquidated damages.
Conclusion. For the reasons stated, in answer to the
certified question, we declare that, under Massachusetts law,
statutory prejudgment interest shall be added by the clerk of
court to the amount of lost wages and other benefits awarded as
damages pursuant to G. L. c. 149, § 150, but shall not be added
to the additional amount of the award arising from the trebling
of those damages as "liquidated damages."
18
The Reporter of Decisions is to furnish attested copies of
this opinion to the clerk of this court. The clerk in turn will
transmit one copy, under the seal of the court, to the clerk of
the United States District Court for the District of
Massachusetts, as the answer to the question certified, and will
also transmit a copy to each party. See, e.g., DiFiore v.
American Airlines, Inc., 454 Mass. 486, 497 (2009).