The treasurers of Boston Children’s Theater, a non-profit organization, are being sued by two former employees seeking unpaid wages.
The theater treasurers filed a motion for summary judgment in superior court, claiming that the case should be dismissed based on the charitable immunity statute (M.G.L. c. 231, § 85W).
According to that statute, an uncompensated officer of a non-profit organization cannot be sued for “any acts or omissions related solely to the performance of his duties as an officer.”
However, the statute does not protect such an officer if his conduct is “intentionally designed to harm” someone.
A superior court judge denied the treasurers’ motion for summary judgment and the denial was upheld by the Appeals Court.
In its opinion, the Appeals Court states that the treasurers continually encouraged employees to keep work for the theater while the treasurers knew that funds were unavailable to pay wages.
Additionally, the theater, which was ultimately forced into bankruptcy, continued to pay third party vendors while employee wages were in arrears.
The Appeals Court concluded that, based on these alleged facts, a jury or a judge could find that the officers’ behavior was “intentionally designed to harm” the employees.
[The executives] claim that merely allowing or encouraging employees to continue working without pay does not show an intent to harm, the Supreme Judicial Court upheld denial of summary judgment on very similar facts in Lynch v. Crawford, 483 Mass. 631 (2019). In Lynch, former employees of a financially struggling nonprofit organization brought Wage Act claims against the former president. 483 Mass. at 632. The president had personally promised employees that they would be paid, while he was aware that the organization would not make payroll and chose to direct funds to outside vendors instead of to employees. Id. at 642. The Court held that those actions constituted “an intentional design to harm employees by failing to pay them the wages they were due.”
Accordingly,
The evidence in the summary judgment record, viewed in the light most favorable to the plaintiffs and drawing all reasonable inferences in their favor, presents a triable question of fact whether the defendants, as treasurers and president of BCT, “acted with an intentional design to harm employees by failing to pay them the wages they were due.”
Law Office of Justin R. McCarthy 