MacLean v. TD Bank, N.A.

Filing 36

District Judge Timothy S Hillman: ORDER entered finding as moot 3 Motion to Dismiss for Failure to State a Claim; granting 11 Motion to Dismiss; finding as moot 13 Motion for Summary Judgment. (Jones, Sherry)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_________________________________________
)
DOUGLAS J. MACLEAN,
)
)
Plaintiff,
)
)
v.
)
)
TD BANK, N.A.,
)
)
Defendant.
)
_________________________________________ )

CIVIL ACTION
NO. 14-40038-TSH

ORDER ON DEFENDANT TD BANK N.A.’S MOTION TO DISMISS (Docket No. 11) AND
PLAINTIFF DOUGLAS J. MACLEAN'S MOTION FOR SUMMARY JUDGMENT (Docket
No. 13)
July 14, 2014
HILLMAN, D.J.
Introduction
Douglas J. MacLean ("Plaintiff") brought a claim against TD Bank, N.A. ("Defendant")
for violations of M.G.L. c. 148 s. 149 (the "Wage Act"). Defendant filed a motion to dismiss the
complaint, and in response Plaintiff filed a motion to amend his complaint, which this Court
allowed. Defendant then filed its Motion to Dismiss Plaintiff's First Amended Complaint
(Docket No. 11). Plaintiff filed an Opposition and Cross-Motion for Summary Judgment (Docket
No. 13). For the reasons set forth below, Defendant's Motion to Dismiss is granted and Plaintiff's
Cross-Motion for Summary Judgment is denied as moot.
Facts
Defendant employed Plaintiff from June 1, 1999 until January 6, 2011, the effective date
of his layoff, most recently as a Commercial Regional Group Manager II, which is a Senior

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Management position. On or about October 28, 2010, Commercial-Lending Division Head
Walter Owens and Senior Vice President Brian Gervais notified Plaintiff that Defendant had
decided to terminate his employment, effective January 6, 2011. Gervais told Plaintiff that he
would remain on payroll and should make himself available should anyone require his
assistance, but would not be required to report to work. Plaintiff claims he was not permitted to
use any paid time off ("PTO") during this time period. Defendant disagrees, claiming that while
Plaintiff was asked to remain "on-call" from October 28 through January 6, he was never told he
could not use his PTO during this time period.
Defendant afforded Plaintiff PTO benefits, as with all of its employees, in accordance
with the terms of the Paid Time Off Policy (the "PTO Policy") contained within its Employee
Handbook. The PTO Policy provides, in relevant part:


"The amount of PTO you accrue is based on your length of service, job grade and
standard weekly hours. It is accrued over the twenty-six (26) pay periods from January
through December. By the last pay period of the year, you will have earned all of your
PTO for that year."



"Standard weekly hours, job grade, and length of service determine your PTO accrual
rate."



"PTO accrual rate may include fractional rounding differences based on which legacy
company administers your payroll."



A full-time member of Senior Management [such as Plaintiffs accrues 12.31 hours of
PTO per pay period with a maximum of 320 hours (or 40 days) per year.

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

"At no time can you have more than five (5) carryover PTO days in a calendar year. If
you have unused PTO at the end of a calendar year, you can carry up to five (5) days, or
equivalent standard weekly hours, of this time as PTO for the new calendar year."



"Exempt Employees are responsible for reporting PTO days used on a timely basis
throughout the year. If an exempt Employee does not report used PTO days by a
designated day at the close of the calendar year, no PTO days will be carried over into the
new calendar year, or paid out upon termination."



"You will receive payment for earned, but unused PTO, for the current calendar year, as
well as any carryover PTO (maximum of five (5) days at any given time) when your
employment terminates with TD Bank.... Exempt Employees will be paid for carryover
PTO only if this information had been reported to Payroll by a designated day in the
previous calendar year."



"You will earn PTO accrual in the last pay period worked if you are paid fifty percent
(50%) or more of your standard weekly hours in that pay period. If you are paid less than
fifty percent (50%) of your standard hours in your last pay period, you will not earn PTO
accrual."

The PTO Policy also provides that, regardless of the notice period required for using PTO, "you
will be charged PTO when you are absent." Plaintiff last acknowledged receipt of the Employee
Handbook on April 16, 2009.
Plaintiff was employed during the first pay period of 2011, so he accrued 12.32 hours of
PTO for that period, amounting to $1,480.77. Defendant paid him that amount, less applicable
taxes and withholdings, on January 16, 2011. Plaintiff complained to Karen Rosenau, then
Senior Vice President of Human Resources, about not receiving certain PTO payments to which

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he claimed he was entitled. Defendant claims that Plaintiff never reported using any PTO in
2010, and therefore was not eligible for any carryover PTO. Plaintiff denies this, claiming he
always fully reported using his PTO. Though Defendant denies Plaintiff was entitled to his five
carryover PTO days from 2010, it agreed to pay him the five days anyway. On or about March
12, 2011 Defendant paid Plaintiff $4,707.69, representing five days, or 40 hours, of PTO.
On February 23, 2011, Plaintiff signed a Severance Agreement And General Release (the
"Release") through which Defendant agreed to pay him $494,154.18 in exchange for a release of
all claims against it. The Release expressly included a release of "any and all claims or rights
under federal, state or local laws, regulations or ordinances relating to the payment of wages,
bonuses, incentives and other compensation to employees...." and "any and all rights,
entitlements, claims or obligations of any kind whatsoever relating to, arising out of or connected
directly or indirectly with any employment agreements, commissions agreements or
compensation agreements with the Company...."
By signing the Release, Plaintiff acknowledged and agreed that (1) his "Severance
Payment and continuation of benefits [were] made in complete satisfaction of any and all claims
for severance pay, bonus pay, incentive pay or any other compensation or benefits to which [he]
is or may claim to be entitled;" (2) other than Severance Payments he received, TD Bank "is not
under any further obligation to make or provide any payments or benefits to [him];" (3) other
than any rights under a 401(k) account, pension plan, equity plan, or for unemployment, he "is
entitled to no other wages, compensation, privileges, perquisites, benefits or payments from" TD
Bank; (4) he waived "any and all claims or rights under federal, state or local laws, regulations or
ordinances relating to the payment of wages, bonuses, incentives or other compensation to
employees;" (5) he "will not file or initiate or cause to be filed or initiated on his/her behalf any

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Proceeding against [TD Bank] or any of the Company Releasees based upon conduct or matters
occurring prior to [February 23, 2011];" and, (6) in the event he participates in any such
proceeding, he "waives any monetary benefit, recovery or relief." The Release allowed Plaintiff
to cancel within seven days of signing, which Plaintiff did not do, and on March 12, 2011,
Defendant paid Plaintiff $494,154.18, less applicable taxes and withholdings, as per the terms of
the Release.
Plaintiff now claims Defendant violated the Wage Act because did not pay him for an
additional 23 days of PTO he had accrued, but could not use, in 2010 and because it did not
timely pay him for the five carry-over days from 2010 that Defendant eventually paid him for.
Discussion
Defendant argues Plaintiff's First Amended Complaint should be dismissed for two
reasons: first, that the Release bars Plaintiff from bringing a claim under the Wage Act, and
second because Defendant has already paid Plaintiff all the PTO he is entitled to.
On its face, the Release does seem to preclude this action. In exchange for a payment of
approximately $500,000, Plaintiff signed an agreement explicitly releasing "any and all claims or
rights under federal, state or local laws, regulations or ordinances relating to the payment of
wages, bonuses, incentives and other compensation to employees...." and "any and all rights,
entitlements, claims or obligations of any kind whatsoever relating to, arising out of or connected
directly or indirectly with any employment agreements, commissions agreements or
compensation agreements with the Company...." Similar language, such as that reproduced
above, specifically stating that the Release applies to all claims for wages and other
compensation can be found elsewhere in the Release as well.

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However, Plaintiff contends that the Release does not cover any claims under the Wage
Act. The Wage Act defines the word "wages" to include "vacation payments due an employee
under an oral or written agreement" and states that "any employee discharged from such
employment shall be paid in full on the day of his discharge." M.G.L. c. 149 s. 148. The Wage
Act also includes a provision stating that "No person shall by special contract with an employee
or by any other means exempt himself from this section." Id. The Massachusetts Supreme
Judicial Court ("SJC") discussed the significance of this provision on releases contained in
contracts between employers and employees in Crocker v. Townsend Oil Co., 464 Mass. 1
(2012). The Court began its discussion by noting that "the legislative purpose behind the Wage
Act (and especially the "special contract" language) is to provide strong statutory protection for
employees and their right to wages." Crocker, 464 Mass. at 13. On the other hand, the Court
considered "the contravening public policy favoring the enforceability of general releases, and
the risk that parties will be unable to settle employment claims by compromising or forgoing a
Wage Act claim where that is the intention of all parties." Id. at 14. The Court concluded that "a
settlement or contract termination agreement by an employee that includes a general release,
purporting to release all possible existing claims, will be enforceable as to the statutorily
provided rights and remedies conferred by the Wage Act only if such an agreement is stated in
clear and unmistakable terms." Id. It went on to explain that the release "must be plainly
worded and understandable to the average individual" and must "specifically refer to the rights
and claims under the Wage Act that the employee is waiving," reasoning that this will ensure
employees do not unwittingly waive those rights. Id. at 14-15 (emphasis added).
In Crocker, the Court found that a general release that stated:
[Each plaintiff] hereby forever releases, remises and discharges [Townsend] and
its shareholders, directors, officers, employees and agents ... of and from any and
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all debts, demands, actions, causes of action, suits, accounts, covenants, contracts,
agreements, damages, and any and all claims, demands, obligations and liabilities
whatsoever of every name and nature, both in law and equity ... that [the
plaintiffs] now have or ever had (or may in the future have, arising out of or in
connection with any events occurring on or prior to the date hereof) against
[Townsend].... The foregoing release is intended to be a general release of all
Claims, to the maximum extent permitted by law, whether or not the subject
matter of any such Claim has been the subject of a previous claim or threatened
claim made by [the plaintiffs].
was not enough to constitute a waiver of the employee's Wage Act claims. Id. at 4 n. 4. That
release contained no specific mention of claims to wages or other compensation or to the Wage
Act itself. Id.
Plaintiff argues for this Court to adopt a 'bright line' test wherein the Release in this case
could not constitute a waiver of his Wage Act claims because it does specifically cite to, or
name, the "Wage Act." Defendant argues that Crocker does not require a release to mention the
Wage Act by name, as long as it refers to "the rights and claims" under the Wage Act being
waived. 464 Mass. at 14. Defendant claims the language in the release in which Plaintiff
relinquished "any and all claims or rights under federal, state or local laws, regulations or
ordinances relating to the payment of wages, bonuses, incentives and other compensation to
employees" does precisely that, in a manner that is "plainly worded and understandable to the
average individual" as required by Crocker. Id. Defendant points out that this language clearly
refers to the payment of wages and other compensation, unlike the general release found
insufficient in Crocker, and that that explicit language ensures Plaintiff could not "unwittingly"
waive his rights under the Wage Act. Id. at 14-15.
I find that Crocker does not require such a release to contain an explicit citation to the
Wage Act, so long as the release makes it clear that an employee is waiving those rights to be
paid any wages due under the Wage Act. The SJC could have included in Crocker a requirement

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that releases must cite to the "Wage Act" in order to operate as an effective waiver of those
claims. Instead it held that a "plainly worded and understandable" reference to the rights under
the Wage Act being released was enough. As the SJC noted, the goal is to ensure an employee
does not unwittingly waive those rights; therefore an explicit recitation of those rights that the
employee is waiving suffices. The Release in this case contained plainly worded and
understandable references to the rights Plaintiff was giving up under the Wage Act by signing
the Release. Therefore the Release bars Plaintiff from now bringing claims under the Wage Act,
and this case is dismissed.
Conclusion
For the foregoing reasons, Defendant's Motion to Dismiss the First Amended Complaint
(Docket No. 11) is granted, and the case is dismissed. Accordingly, Plaintiff's Motion for
Summary Judgment is denied as moot.
SO ORDERED.
/s/ Timothy S. Hillman
TIMOTHY S. HILLMAN
UNITED STATES DISTRICT JUDGE

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