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New Massachusetts Law Requires Dental Practice Owners to Provide Additional Compensation for Associate Post-Termination Non-Compete Covenants Agreements

Monday, February 04, 2019
Pierce & Mandell, P.C. - New Massachusetts Law in Boston, MA

While Massachusetts law (See, Massachusetts General Laws Chapter 112, Sections 12X and 74D) has long provided that employed physicians and nurses cannot be subject to post-termination non-compete covenants, the Massachusetts Legislature has never extended the same unenforceability to such non-competes appearing in associate contracts for dentists. Massachusetts dental practice owners have thus come to rely on post-termination non-compete covenants as an important and customary protection for their practices. The new Massachusetts Noncompetition Agreement Act, Massachusetts General Laws Chapter 149, Section 24L (the “Act”) has changed the scope of enforceability for post-termination non-compete covenants appearing in any associate agreement entered into on or after October 1, 2018.

The Act does not apply to non-compete covenants that are included in practice sale agreements. It also does not apply to post-termination non-solicitation or non-disclosure covenants in any agreements, nor prohibitions on competition or outside activity prohibition in employment agreements that apply during the term of an associate’s employment. The Act also grandfathers and does not apply to agreements that went into effect prior to October 1, 2018.

Instead, the Act solely applies to non-compete covenants to the extent that they restrict the ability of an associate to compete in the same market as the practice following the termination of employment. The Act provides that a post-employment non-compete is unenforceable unless it meets numerous limits and standards.

Most noteworthy, and new, is a maximum limit of up to a one (1) year period, unless the employee breaches his or her fiduciary duties or unlawfully takes employer property; a requirement that the agreement state that the employee has the right to consult with legal counsel prior to signing; a restriction on enforceability against laid off employees or those terminated without cause; and, a requirement that the employer pay additional compensation to the associate in the form of “garden leave” payments of no less than 50% of the highest annualized base salary paid by the employer to the associate within the two (2) years that immediately preceded the termination date payable during the non-compete restriction period, or such “other mutually-agreed upon consideration” that must be stated in the agreement.

To ensure enforceability, a dental practice owner must now include non-compete language in new associate agreements with these limitations and include one of the two types of required additional compensation. The Act defines “garden leave” payments as payments that the owner makes to the associate during the “restricted period,” on a pro-rata basis throughout the entirety of the restricted period.

In contrast to garden leave payments, the Act provides practically no guidance with respect to what constitutes “other mutually-agreed upon consideration.” Such consideration need not be paid at a certain time(s) or in a certain amount. It must simply be agreed-to between the owner and the associate and reasonable to compensate the associate for the restriction on his or her ability to practice after termination.

An owner must take several factors into consideration in determining whether the non-compete agreement offered to associates should be supported by garden leave payments or other mutually-agreed upon consideration. While garden leave payments are certain with respect to their timing and amount, they are substantially more than most small practices are prepared to pay and are subject to the Massachusetts Weekly Wage Law (the “Wage Law”), codified as Massachusetts General Laws Chapter 149 § 148. An owner who fails to make garden leave payments may thus potentially be liable to an associate for the remedies set forth in the Wage Law, which include treble damages, attorney’s fees, and other costs.

Until there is more guidance on what constitutes “other mutually-agreed upon consideration,” small practices are likely to consider using some form of alternative consideration to support the enforceability of a non-compete. But, until there is a change in the law or a court case ruling on the scope of acceptable “mutually-agreed upon consideration,” there is little certainty as to what amount of consideration will be considered reasonable and sufficient to support enforcement of a post-termination non-compete against an associate.

The health/dental law attorneys at Pierce & Mandell, P.C. are available to advise dental practice owners, buyers, sellers and associates on how the new Massachusetts Noncompetition Agreement Act will affect their current or new contracts, associations, and transactions.

Feel free to contact Bill Mandell, Esq. at bill@piercemandell.com, Hannah Schindler Spinelli, Esq. at hannah@piercemandell.com, Samuel Hoff, Esq. at shoff@piercemandell.com, or Ryelle Seymour, Esq. at ryelle@piercemandell.com for more information about our representation of dentists and dental practices affected by this new law.

More Honors For Pierce & Mandell Attorneys

Monday, November 26, 2018

Pierce & Mandell, P.C. is proud to announce that all of its partners Bob Pierce, Bill Mandell, Michael Fee, Bob Kirby, Tom Kenney and Dennis Lindgren have been selected as 2018 New England Super Lawyers.



Bob Pierce was recognized as a Super Lawyer in the practice of Civil Litigation Defense, Bill Mandell in Health Care Law, Michael Fee, Bob Kirby and Tom Kenney in Business Litigation and Dennis Lindgren in Plaintiff’s Personal Injury.

Super Lawyers rates lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations, and peer evaluations.

In addition, Bill Mandell was named in the 25th edition of The Best Lawyers in America in the practice area of Health Care Law. Best Lawyers® identifies the top 5 % of private practice attorneys nationwide, as determined by peer review.

For information or assistance from Pierce & Mandell, P.C., contact us.

Pierce & Mandell Lawyers to present at 2019 Yankee Dental Conference

Friday, October 05, 2018
Pierce & Mandell, P.C. - Bill MandellPierce & Mandell, P.C. - Hannah Schindler Spinelli

Bill Mandell and Hannah Schindler Spinelli of Pierce & Mandell, P.C. will be presenting a continuing education seminar entitled Legal Issues in Practice Transitions at the 2019 Yankee Dental Conference on Thursday, January 31, 2019 at 2:00pm.

The program will focus on the legal issues in the purchase and sale of practices and ownership in practices. Topics covered will include

  • What legal documents are necessary to buy or sell a practice and when to retain legal counsel?
  • What are the most important early steps to take to ensure that the transition will be successful?
  • How can buyers protect themselves from the liabilities of the seller?
  • How can sellers secure commitments for post-closing activities?
  • What are restrictive covenants and are enforceable, and how are they impacted under the new Massachusetts non-compete law?

For more information on the program see https://www.yankeedental.com/course?sfid=a181J000004TfduQAC.

To register for Yankee Dental go to https://www.yankeedental.com/.

Recent SJC Decision Establishes That Insurer’s Duty to Defend Does Not Include Counterclaims

Monday, November 20, 2017

Curtis B. DoolingBy Curtis B. Dooling

Under Massachusetts law, an insurer’s duty to defend its insured is broad. An insurer has a duty to defend its insured if the allegations against the insured are “reasonably susceptible of an interpretation that states or roughly sketches a claim” that falls within the defense obligation’s scope. Billings v. Commerce Ins. Co., 458 Mass. 194, 200 (2010).

Even where some claims against an insured are not covered by insurance, if some of the claims are covered, an insurer has a duty to defend the insured against all claims. This is commonly referred to as the “in for one, in for all” doctrine.

Until recently, the law was unsettled in Massachusetts as to whether an insurer had a duty to pay the legal costs associated with a counterclaim filed by an insured in response to a covered claim against the insured. In the case of Mount Vernon Fire Insurance Company v. Visionaid, Inc., the Supreme Judicial Court, in a 5-2 opinion, held that an insurer is not required to pay for its insured’s counterclaim. Massachusetts has joined the majority of jurisdictions that don’t obligate an insurer to cover the costs of an insured’s counterclaim, even where the counterclaim is related to and assists in the defense of the underlying case.

The defendant/insured, Visionaid, Inc., argued that the duty to defend included all reasonably necessary steps to reduce the liability of the insured, including the costs of a counterclaim. The SJC relied on the plain meaning of the insurance policy and held that the policy did not impose an obligation on the insurer to fund a counterclaim.

Chief Justice Gants dissented and noted that an insurer can’t fulfill its duty to defend without prosecuting related counterclaims that reduce its insured’s liability. The majority disagreed and held that an affirmative counterclaim did not fall within the definition of “defend” under the policy.

Practically speaking, an insured who believes that it has valid counterclaims may still assert the claims, but will have to do so at its own expense. When this scenario occurs, insurance defense counsel will have to work closely with the insured’s personal counsel to both defend the case and prosecute the counterclaim.

Pierce and Mandell’s insurance and litigation attorneys are well-versed in these areas and can assist both insurers and policyholders in assessing what claims are covered under an insurance policy.

SJC Ruling Provides New Remedies for Shareholders of Deadlocked Corporations

Monday, November 13, 2017

Sam Hoff, Pierce & Mandell, P.C.By Sam Hoff

In its recent ruling in Koshy v. Sachdev, the Massachusetts Supreme Judicial Court issued an early holiday gift to any shareholder of a deadlocked Massachusetts corporation. Thanks to the SJC’s ruling, such shareholders now have available to them several alternative forms of relief which may allow them to regain control of their corporation, as opposed to taking the “extreme” measure of dissolving their corporation.

The facts in Koshy are all too familiar to any shareholder who has experienced the frustration of corporate deadlock before. Two friends, Koshy and Sachdev, co-founded a corporation which provided computer aided design services. They split the corporation’s shares 50/50 and served as its only two directors. After some initial growth and success, Koshy’s and Sachdev’s relationship began to deteriorate. They differed in opinion on a variety of issues including strategic business decisions, the amount and frequency of distributions, and managerial hiring. Their inability to compromise with one another on these issues eventually caused business to grind to a halt. Koshy and Sachdev each attempted to buy the other out and, as a last resort to get out of business with Sachdev, Koshy brought suit claiming that the corporation was deadlocked and must be dissolved. A Superior Court judge found that no deadlock existed, and Koshy appealed the finding.

Koshy is the first case in which the SJC has been called to interpret Section 14.30 of the Massachusetts Business Act (the “Act”). The Act allows any shareholder who holds 40% of the combined voting power of a corporation’s outstanding stock to petition the Superior Court to dissolve the corporation in the event that its directors are deadlocked. The SJC determined that the Act applies only in cases of “true deadlock” and set forth four factors which are relevant in determining whether true deadlock exists:

(1)Whether irreconcilable differences have resulted in a “corporate paralysis,” which is defined as a stalemate between the directors concerning a primary function of management (e.g., payroll, client services, hiring and retention of employees, and/or corporate strategy).

(2)The size of the corporation at issue, with deadlock more likely to occur in a small or closely held corporation, particularly one where ownership is divided on an even basis between two shareholder-directors.

(3)Any indication that a party to a lawsuit has manufactured a dispute in order to engineer a true deadlock.

(4)The degree and extent of distrust and antipathy between the directors.

Where true deadlock exists, relief is available under the Act so long as the shareholders cannot work around the deadlocked directors and irreparable injury is threatened to or being suffered by the corporation as a result of the true deadlock. The SJC found this to be the case in Koshy. Further, the SJC found that the relief available to shareholders of a deadlocked corporation is not limited to the “extreme” measure of dissolution, but includes alternative remedies such as a court-ordered buyout of one shareholder by another or the sale of the corporation to a third-party buyer. The appropriate remedy must be determined by the Superior Court on a case-by-case basis.

From a legal standpoint, the SJC’s ruling in Koshy is a major break from the prior understanding of the Act, as it opens the door for alternative equitable forms of relief. The key takeaway for shareholders of Massachusetts corporations is that they need not resign themselves to the dissolution of their corporation should it become truly deadlocked. This is especially good news for shareholders of small or closely-held Massachusetts corporations, many of whom have built their business from scratch and are personally invested in the goodwill and future success of the corporation. It is understandable that any such shareholder may be reluctant to dissolve his or her corporation. In light of the SJC’s ruling in Koshy, they may now bring suit and argue before the Superior Court that they should be allowed to regain control of their corporation and continue business by buying out their fellow shareholder(s).

Being a shareholder of a deadlocked corporation can be stressful and harmful to your bottom-line. If you find yourself in this situation, please contact the experienced business litigation attorneys at Pierce & Mandell to learn more about your rights and secure the future of your corporation.

The New Massachusetts Pregnant Workers Fairness Act

Tuesday, October 03, 2017

Pierce & Mandell, P.C.By: Lena J. Finnerty

On July 27, 2017, Governor Baker signed into law the Massachusetts Pregnant Workers Fairness Act (the “MPWFA”) which extends the protections afforded pregnant workers in Massachusetts beyond those currently provided under federal law. The Act, which will go into effect April 1, 2018, will amend the current anti-discrimination statute in Massachusetts, to prohibit workplace and hiring discrimination related to pregnancy, nursing, and other pregnancy-related conditions.

Current federal law protects pregnant and new mothers from discrimination in the workplace under the Americans with Disabilities Act and Title VII of the Civil Rights Act, as amended by the Pregnancy Discrimination Act. If an employee is temporarily unable to perform their job due to a medical condition related to pregnancy or childbirth, the employer must treat that employee in the same way it treats other temporarily disabled employees. However, the ADA does not consider pregnancy itself a “disability.” Rather, only conditions or impairments resulting from pregnancy may be considered covered disabilities.

Massachusetts has expanded these protections under the new MPWFA to provide all pregnant and nursing employees with reasonable accommodations without having to establish that they have a covered medical condition. The language of the MPWFA will be codified with the current Massachusetts anti-discrimination statute, M.G.L. c. 151B, stating that it is an unlawful practice for employers to discriminate based on “pregnancy or a condition related to said pregnancy, including, but not limited to, lactation, or the need to express breast milk for a nursing child . . .”, and to deny a reasonable accommodation for an employee’s pregnancy or any condition related to the employee’s pregnancy, unless the employer can show that the accommodation would impose an undue hardship that requires significant difficulty or expense on the employer’s program, enterprise or business.

Requirements under the MPWFA

(1.) Engage in the Interactive Process

The employer and employee must engage in a timely and good-faith interactive process to determine effective reasonable accommodations to enable the employee to perform the essential functions of their job.

(2.) Reasonable Accommodation

Examples of reasonable accommodation under the MPWFA include:

  • More frequent or longer paid or unpaid breaks;
  • Time off to recover from childbirth with or without pay;
  • Acquisition or modification of equipment or seating;
  • Temporary transfer to a less strenuous or hazardous position; and
  • Private non-bathroom space for expressing breast milk.

(3.) Documentation

An employer may request documentation from an appropriate health care or rehabilitation professional about the need for a reasonable accommodation, unless the request is for the following pregnancy accommodations: (1) more frequent restroom, food or water breaks; (2) seating; (3) limits on lifting over 20 pounds; and (4) private non-bathroom space for expressing breast milk.

(4.) Notice

Covered employers must provide written notice to all employees of their rights under the MPWFA in the form of a handbook, pamphlet, or other written means, including the right to be free from discrimination based on pregnancy and related conditions, and the right to reasonable accommodations. Written notice must be provided to:

  • New employees at or prior to the start of employment;
  • Existing employees by April 1, 2018; and
  • Within ten (10) days of the date an employee informs the employer of their pregnancy or related condition.

Who is Covered

  • Employers with six (6) or more employees; and
  • All employees, regardless of sex or gender.

What Employers Should do Now

  • Provide written notice to all current employees by April 1, 2018; to new hires upon the date of hire; and within ten (10) days to any employee who informs employer of pregnancy or related condition;
  • Review and amend employee handbooks and policies to reflect compliance with requirements of MPWFA;
  • Train human resources personnel, managers, and staff about the requirements of the MPWFA; and
  • Consult counsel with any legal compliance questions regarding the MPWFA.

If you are an employer with questions on how to best comply with the new MPWFA and other statutory obligations, or an employee that believes their employment rights have been violated, contact the experienced employment law attorneys at Pierce & Mandell.

The Wage Act – Are Commissions Considered Wages?

Tuesday, July 18, 2017

Pierce & Mandell, P.C., Boston, MABy Curtis Dooling

The Massachusetts Wage Act, G. L. c. 149, § 148, requires that employees pay their employees’ wages within six days of the end of the applicable pay period. The law includes harsh penalties for failure to pay wages, including the mandatory award of triple damages and attorneys’ fees. An employer that violates the Wage Act can also be subject to criminal penalties and corporate officers and directors can be held personally liable for Wage Act violations.

While the payment of hourly wages and salaries is generally straightforward, the payment of commissions can be decidedly less so. Employers often refuse to pay commissions to employees upon termination, even when the employee has earned the commission.

The Wage Act applies to commissions and the failure to pay earned commissions subjects employers to the same harsh penalties as the failure to pay hourly wages. The Wage Act states, in relevant part,

This section shall apply, so far as apt, to the payment of commissions when the amount of such commissions, less allowable or authorized deductions, has been definitely determined and has become due and payable to such employee, and commissions so determined and due such employees shall be subject to the provisions of section one hundred and fifty.

In other words, if the commission can be calculated and is due under the terms of an employment contract, the employer must pay it, or be subject to the penalties set forth in the Wage Act.

Even if the commissions are discretionary, that doesn’t necessarily mean they don’t fall under the guise of the Wage Act. Even when employers have wide discretion in making calculations and determinations as to the amount of commissions, an employee can still bring a Wage Act claim and can be awarded damages if the employee can show that the commissions were due and payable and definitively determined.

Pierce & Mandell’s litigation attorneys are well-versed in all aspects of the Wage Act and can guide both employers and employees through the process of filing and defending a Wage Act claim.

Attorney Curtis Dooling Serves as Panelist for MCLE Practicing with Professionalism Course

Wednesday, March 22, 2017

Pierce & Mandell, Curtis DoolingAll newly admitted lawyers in Massachusetts are required to take a one-day professionalism course within 18 months of admission. The day-long course, which is run by Massachusetts Continuing Legal Education (MCLE), covers a variety of topics, including ethics and professional conduct, court practice and successful attorney-client relationships.

MCLE recently invited Pierce & Mandell’s Curtis Dooling to sit on a lunchtime panel as part of the professionalism course. Dooling and three other panelists spoke to attendees and answered questions on such varied topics as balancing work and family, dealing with intransigent opposing counsel and career development.

On participating in the Practicing with Professionalism course, Dooling noted, “I found the discussion to be instructive and enjoyable and I was honored to be invited back by MCLE to be a panelist. I tried to provide some practical advice to the newly-admitted attorneys, advice I would have liked to receive when I was a newly admitted lawyer. The discussion focused on real-life issues, such as client relationships and career development, that aren’t taught in law school. I look forward to participating in more MCLE curricula in the future.”

Dooling Wins Premises Liability Jury Trial in Berkshire County

Thursday, February 02, 2017

Curt Dooling recently obtained a defense verdict on behalf of his clients in a jury trial in the Pittsfield District Court in Berkshire County.

The plaintiff sustained multiple leg fractures after tripping over an entrance rug in a convenience store in Pittsfield, Massachusetts. Dooling represented the owner and operator of the convenience store. The plaintiff alleged that the entrance rug on which he tripped was defective because it failed to comply with American National Standard B101.6, the Standard Guide for Commercial Entrance Matting. The plaintiff also claimed that the store failed to properly secure the mat to the floor, which created a tripping hazard.

Before the trial began, Dooling filed a motion in limine to exclude any evidence regarding the size and type of the entrance rug on which the plaintiff tripped and whether the rug complied with any industry standard or regulation. The trial judge allowed Dooling’s motion in limine, and as a result, the plaintiff was foreclosed from presenting evidence in support of key elements of his theory of liability.

The jury deliberated for less than one hour and returned a defense verdict, determining that Pierce & Mandell’s clients were not negligent.

Supreme Judicial Court Takes Appeal in Case Involving the Stored Communications Act

Tuesday, December 20, 2016

Pierce & Madell, Boston, MA, Robert L. Kirby, JrBy Robert L. Kirby, Jr.

In Ajemian v. Yahoo!, we represent the personal representatives of an estate seeking to gain access to the contents of a decedent’s Yahoo! email account. The Probate Court ruled that the Stored Communications Act, 18 U.S.C. 2701 et. seq., prohibited Yahoo! from divulging the contents of the email account to the personal representatives. We appealed. The Supreme Judicial Court has, sua sponte, transferred the appeal from the Appeals Court. We expect the Supreme Judicial Court to hear the appeal in early 2017.


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