MCAD Emotional Distress Awards Increase Dramatically

The amount of damages for emotional distress awarded by the MCAD has increased dramatically. Before 1990, the MCAD typically awarded between $5,000 and $10,000 for emotional distress damages. In 1995 the typical award increased to between $20,000 and $50,000 with a few awards reaching $250,000. In 1996 the MCAD made a record $300,000 emotional distress award in one case.

Why This Is Important . . . The increased emotional distress damages awarded by the MCAD means employers must take harassment and discrimination very seriously. A successful claim can cost heavy damages even before back pay, attorney fees and interest are added.

Prior Release Bars Claim For Environmental Costs

A corporation paid nearly $2,000,000 to cleanup hazardous waste on property it bought from another corporation. It sued the shareholders of the prior owner for contribution. The prior owners claimed that a release signed by the parties in an unrelated prior dispute barred the claim for contribution. The Court of Appeals agreed and upheld the dismissal.

Why This Is Important . . . Parties commonly sign "general releases" when settling lawsuits. A broadly worded release can be used to bar future unrelated claims, such as claims for contribution for Chapter 21E clean up costs, that you did not, or could not, foresee. If you are signing a release with a party with whom you have ongoing business relations, consider using a limited release instead of the standard broad form.

Age Discrimination Law Expanded By Supreme Court

In an Age Discrimination in Employment Act ("ADEA") case, the U.S. Supreme Court held that a 56-year-old employee could sue for age discrimination even though he was replaced by someone in his early forties. Only persons 40 or over are protected by ADEA. The employer argued there can be no ADEA discrimination where one member of the protected class is replaced by another. The fact that the replacement was over 40 was irrelevant. The Plaintiff only had to show his replacement was "substantially younger."

Why This Is Important . . . The decision makes it more difficult for employers to defeat ADEA claims. Under this decision, the age of the replacement cannot defeat the claim if the replacement is substantially younger than the discharged employee. Remember that Massachusetts Law protects persons aged 18 through 70.

Keeping Your Corporate Protection Alive & Well

You created a corporation for tax benefits, asset protection and to reduce personal exposure. Not meeting the documentation requirements a corporation requires can undo this protection. Active Nicolai Law Group clients received a memorandum showing them what generally needs to be done to assure this protection.