Lipsitt v. Plaud
994 N.E.2d 777
Mass.2013Background
- Lipsitt was hired as museum director for the Franklin D. Roosevelt American Heritage Center; his written agreement provided specified monthly wages but the Center often failed to pay full salary.
- Lipsitt continued working through 2007 based on Plaud’s promises that arrearages would be paid; many payments came from Plaud’s personal account.
- The Center closed in 2007; Lipsitt filed a Wage Act complaint with the Attorney General in 2008 and received a right-to-sue letter in 2010.
- In Superior Court (2010) Lipsitt sued for breach of contract, quantum meruit, Wage Act violations, fraud, and G.L. c. 93A; defendants moved to dismiss, arguing the Wage Act preempts common-law claims and that Plaud should be dismissed individually.
- The motion judge dismissed the common-law and c.93A claims, limited Wage Act recovery to the 3-year statutory period, and dismissed Plaud for insufficient veil-piercing allegations; Lipsitt appealed.
- The Supreme Judicial Court reversed: the Wage Act does not preempt common-law contract and quasi-contract claims; allegations were sufficient to keep Plaud as a defendant and leave to amend should have been granted.
Issues
| Issue | Lipsitt's Argument | Plaud/Heritage Center's Argument | Held |
|---|---|---|---|
| Whether the Wage Act (G.L. c.149, §§148,150) is the exclusive remedy for unpaid wages | Wage Act supplements but does not extinguish existing common-law remedies; Lipsitt may pursue contract/quantum meruit | The Wage Act creates a comprehensive statutory remedy that preempts common-law breach of contract and quasi-contract claims | Not exclusive; common-law claims survive unless statute manifestly or necessarily implies repeal |
| Whether Wage Act filing/reporting requirement bars pleading common-law claims | Reporting to AG is not a jurisdictional gatekeeping device for common-law suits outside the statute | Failure to follow Wage Act reporting would undermine enforcement scheme and bypass AG’s role | Reporting serves notice/investigation purpose only; does not preclude common-law suits, especially where Wage Act claims are time-barred |
| Whether Plaud was properly dismissed individually for insufficient veil-piercing allegations | Complaint alleged payment from Plaud’s personal account, lack of corporate formalities, no tax filings—sufficient for plausibility at pleading stage | Allegations were conclusory and failed Iannacchino/Twombly plausibility standard; dismissal proper | Allegations were sufficient to plausibly state veil-piercing claim; dismissal was improper and leave to amend should have been allowed |
| Whether leave to amend to add veil-piercing facts should have been denied as futile | Amendment would cure pleading defects and is allowed absent futility or prejudice | Amendment futile because common-law claims were preempted and therefore veil-piercing irrelevant | Denial of leave was erroneous; amendment should have been allowed (futility argument moot after holding on preemption) |
Key Cases Cited
- Eyssi v. Lawrence, 416 Mass. 194 (presumption against statutory abrogation of common-law remedies)
- Ferriter v. Daniel O’Connell’s Sons, 381 Mass. 507 (statutes do not take away common-law remedies absent clear intent)
- Passatempo v. McMenimen, 461 Mass. 279 (statute expanding remedies will not be read to preempt long-standing common-law causes absent manifest intent)
- Melia v. Zenhire, Inc., 462 Mass. 164 (purpose and evolution of Wage Act and recent enhancements)
- Wiedmann v. The Bradford Group, Inc., 444 Mass. 698 (Wage Act individual liability and remedial context)
- Iannacchino v. Ford Motor Co., 451 Mass. 623 (pleading standard; plausibility requirement)
- Evans v. Multicon Constr. Corp., 30 Mass. App. Ct. 728 (factors for piercing corporate veil)
- Attorney Gen. v. M.C.K., Inc., 432 Mass. 546 (corporate disregard as equitable remedy to prevent injustice)
- Crocker v. Townsend Oil Co., 464 Mass. 1 (balancing statutory remedies and common-law recovery periods)
- My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614 (corporate veil jurisprudence)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading plausibility standard)