Both state and federal wage and hour laws protect employees’ rights to receive payment of the wages due to them in a timely manner. In some cases, the court must determine which laws, including the laws of which states, apply to a plaintiff’s claims. In Ossenbruggen v. Cowan Systems, LLC, the District Court of Massachusetts had to consider whether Maryland would apply its own wage laws or Massachusetts’ Wage Act in determining if it was appropriate to transfer the case in accordance with a forum selection clause in the contracts between the parties.
The plaintiffs filed suit to recover wages they alleged were due to them and similarly situated workers who had also worked as drivers for the defendants. The plaintiffs alleged, in part, that the defendants violated the Massachusetts Wage Act.
The plaintiffs originally filed the case in Suffolk Superior Court, but it was removed to the District of Massachusetts. The plaintiffs then moved to have the case transferred to the Western Division of the District of Massachusetts. The defendants also sought to have the case transferred, but to the Baltimore Division of the District of Maryland, based on a forum selection clause in the contract.
The plaintiffs claimed they only filed the case in Suffolk Superior Court because of its Business Litigation Session. They argued that they should have the right to choose where the case is litigated.
Pursuant to 28 U.S.C § 1441(a), when a case is removed from state court, it is removed to the district and division in the location where the case is pending. The court pointed out that Suffolk County is within the Eastern Division. The court denied the plaintiffs’ motion, noting they had a choice of venue when they originally filed the action. The court found no good cause for transfer.
The court then considered the defendants’ motion. The plaintiffs had signed individual contracts with the defendants. The contracts included both a forum selection clause and a choice of law clause. The contracts provided that the agreements were governed by the laws of the United States and Maryland. The contracts further provided that any claim or dispute arising from or connected to the agreement or with respect to the parties’ overall agreement must be brought within the state or federal courts serving Baltimore County, Maryland. The defendants sought transfer to the District of Maryland, Baltimore Division, based on the forum selection clause. Citing case law, the court found the transfer should be allowed because forum selection clauses should generally be honored unless there are extraordinary circumstances that disfavor the transfer. The court found no extraordinary circumstances present here.
The plaintiffs argued that the forum selection clause must be invalid. If the case were transferred to the Maryland district court, Maryland’s conflict of laws principles would apply. The plaintiffs argued that the Maryland district court may then apply Maryland’s wage laws instead of the Massachusetts Wage Act, based upon the choice of law clause. The plaintiffs contended that the Massachusetts Wage Act is fundamental state policy and is non-waivable. They reasoned that the forum selection clause was against public policy as an invalid attempted waiver of rights under the Wage Act.
The court pointed out, however, that the Supreme Judicial Court has stated that forum selection clauses that cover claims under the Wage Act are presumed to be enforceable, which places the “substantial burden” of showing enforcement would be “unfair and unreasonable” on the party opposing enforcement. Furthermore, the court noted that the plaintiffs’ bare assumption that the choice of law provision applied to the Wage Act claims was flawed. The language in the forum selection clause is broader, covering not only claims arising from or connected to the agreement but also those “with respect to the overall relationship between the parties.” The choice of law provision, however, stated that “[t]his Agreement” was to be governed by Maryland law. A Wage Act claim is not contractual but is a statutory right. The court noted that Maryland has previously distinguished between contractual claims and claims based on Maryland’s wage statute. Since the plaintiffs’ argument was based on an assumption that Maryland would apply its own wage law, but case law suggested otherwise, the court found the plaintiffs failed to meet the burden of showing that the Maryland district court would violate fundamental public policy.
The court therefore denied the plaintiffs’ motion to transfer the case and granted the defendants’ motion to transfer venue to the District Court of Maryland, Baltimore Division.
This case illustrates the importance of thoughtfully choosing the forum in which to file a case, especially if it is likely the case will be removed. As the court stated, a plaintiff’s ability to control the forum where the case is litigated lies in that original decision. If you have a legal issue involving the Wage Act, you should seek the assistance of a knowledgeable Massachusetts wage violation attorney immediately to protect yourself. The Law Offices of Richard Mucci have experience handling both sides of wage and hour claims. Call us at (781) 729-3999 to schedule an appointment to discuss your case.