Thursday, May 5, 2022

‘Til Death Do Us Part?

Meghan E. Hall

A partition action is a legal proceeding to force the sale of real estate that is held by two or more joint tenants (or tenants in common), in


order to fairly divide the sale proceeds among the owners.  A partition action is often used a last resort when one or more owners want to sell, but cannot agree with the other owners on the terms of the sale. Partition actions are governed entirely by Chapter 241 of the Massachusetts General Laws.  Pursuant to G.L. c. 241, §1, “[a]ny person, except a tenant by the entirety [a married couple], owning a present undivided legal estate in land, not subject to redemption” has a right to partition.  What happens, however, when a partition action is initiated, but one joint tenant dies during the partition proceedings, but before the property is sold?

This question is properly addressed in the SJC decision of Freda Battle, as personal representative of the Estate of Charles R. Dunn, v. Barbara Howard, SJC-13177.  

In Dunn v. Howard, the parties owned a property in the Dorchester neighborhood of Boston as joint tenants with rights of survivorship since 1993.  Then, at the age of 93, Dunn brought a partition action seeking a sale of the property.  As the property could not be advantageously divided (that is, physically divided), the Court appointed a commissioner and issued a warrant for the sale of the property.  Thereafter, on or about January 30, 2021, the appointed commissioner accepted an offer to purchase the property, which was “subject to approval by this Court [the Land Court].”  Following the accepted offer, the commissioner was to prepare a purchase and sale agreement for the Court’s review and approval.  However, before the Court approved the sale, Dunn passed away.

Following Dunn’s passing, Howard filed a motion to dismiss the partition action arguing that Dunn’s interest in the property vested in Howard at the time of his death and that the filing of the partition action did not sever the joint tenancy.  The Land Court denied the motion to dismiss, which Howard appealed and the SJC took up the matter sua sponte.  

The SJC concluded that the initiation of the partition action, the subsequent proceedings, and the acceptance of the offer did not serve to sever the joint tenancy.  That is because a joint tenancy can only be severed when one of the four unities is destroyed. (The four unities are: (i) interest, (ii) title, (iii) time, and (iv) possession.) “Generally, acts that will severe one or more of the four unities and terminate a joint tenancy include alienation of the land by conveyance, including some forms of granting a mortgage by one or more joint owners, and severance by partition.”  As the filing of the petition to partition did not sever the joint tenancy, the SJC noted that the operative act that would have severed the joint tenancy would have been the commissioner’s actual conveyance of the property by deed to the buyer.  “Thus, until Dunn’s death, the parties remained joint tenants with a right of survivorship.  When Dunn died, Howard became the sole owner of the property.”  

The Court further addressed the potential buyer’s right to possess the property based upon the accepted offer to purchase and differentiated this case from McCarthy v. Tobin, 429 Mass. 84 (1999).  In McCarthy, the SJC held that where there is a firm offer and all materials terms have been agreed to by the parties, the offer to purchase creates a binding contract to sell entitling the buyer to specific performance.  In this case, however, the terms of the offer between the commission and the buyer were subject to the approval of the Land Court judge, the parties had the ability to object to the sale, and the parties had the right to prevent the sale by matching the buyer’s offer or presenting their own offer.  Additionally, the acceptance of an offer does not bring about the conveyance itself and did not alter the owner’s property rights.  Accordingly, based on the foregoing, the SJC concluded that the buyer’s offer did not manifest the same definite intent to be bound as the buyer in McCarthy and the buyer did not possess property rights in the property. 

In conclusion, the SJC held that the heirs of a decedent in a partition action do not have standing to continue a partition action.  That is because the heirs of a joint tenant with rights of survivorship do not inherit the interests in the property, as it passes to the other joint tenant by operation of law.  As such, the SJC found that the motion to dismiss should have been allowed on the grounds that Dunn’s heirs lacked standing as they held no interests in the property.

While G.L. c. 241 provides an “out” from the shared ownership of property, Dunn v. Howard serves as a reminder of the key difference between holding property as joint tenants with rights of survivorship or tenants in common.  Joint tenants with rights of survivorship operate to the disadvantage of heirs, where tenants in common hold property together, but their respective interests in the property pass to their heirs at death.   Joint tenants with rights of survivorship, much like tenants by the entirety (married couples), hold the property together until death when the decedent’s interests pass to the other owner, which cannot be severed by the initiation of a partition action.  For advice on pursuing a petition to partition, the counsel of an experienced real estate attorney is recommended. 

An associate in the litigation department of Moriarty Troyer & Malloy LLC, Meghan is an experienced real estate litigator licensed in Massachusetts. Meghan’s experience includes representing clients in all Massachusetts trial courts, including the Land Court, and the Appeals Court. Meghan’s email is mhall@lawmtm.com. 



The Massachusetts Wage Act Continues to Bite… Employers

Daniel S. Tarlow

Many Massachusetts employers are aware that the Commonwealth’s Wage Act, G.L. c. 149 sec. 148, is uncompromising regarding an


employer’s obligation to pay wages in a timely fashion and imposes harsh penalties (including mandatory treble damages) for non-compliance. Also, most Massachusetts employers understand and try to comply with the Wage Act’s requirement that terminated employees be paid their final wages (including accrued vacation pay) on the date of termination.

In a statutory scheme that is otherwise entirely inflexible and harsh, one bit of “wiggle room” has been an influential line of superior court cases (the leading case being Dobin v. CIOview Corp. from 2003), which held that so long as final wages were paid before the employee files a lawsuit, the employee’s damages under the Wage Act would be limited to the lost interest on the money (trebled) from the date of termination to the date of the payment.  These rulings provided some comfort that when an employer was not in a position to provide final pay on the day of termination, the failure to do so would not devolve into a hefty legal claim.

All this changed on April 4th, when the SJC, in the case of Reuter v. City of Methuen, 2022 WL 996270, at *4, overruled this line of cases, and held that nearly any failure to provide final wages and vacation pay on the date of termination entitles the employee to three times the wages and vacation pay, as well as reasonable attorneys’ fees incurred in pursuing a claim. In essence, the SJC held that the rule articulated in these cases may be laudable or sensible, but is not supported by the statutory language or history. As the SJC itself recognized, its ruling has major implications for how and when employers terminate employees.

The basic rules of the Wage Act are well-known:

  • Employers must pay their employees within either six or seven days of the “termination of the pay period during which the wages were earned.”
  • “Wages” include all regular wages, accrued and unused vacation pay, and commissions when due and determined.

With respect to final pay upon termination, however, the Wage Act treats employees who resign or quit differently than those who are terminated. With respect to the former, an “employee leaving his employment,” must “be paid in full on the following regular pay day.” With respect to the latter, an “employee discharged from such employment,” must “be paid in full on the day of his discharge.” In Reuter, the SJC described this distinction as likely emanating from the Legislature’s determination that, while employers may not have advance notice of an employee’s resignation, they control the timing of when they terminate an employee. By and large, this distinction may be valid, and the employer that has decided to terminate an employee has time to organize final payment for the employee’s last day.

However, there are numerous circumstances where an employer may have difficulty arranging final payment for the date of termination.  These range from: administrative or technical difficulties with payroll; a sudden termination due to misconduct; or the employee not being in the workplace to receive final payment (think, “remote workers”). In these and similar circumstances, employers often find themselves playing “catch-up,” and having to make final payment shortly after the employee’s last day.

Under the Dobin line of cases, employers had some comfort that a small “miss” would not result in a big “hit” under the Wage Act. Now, with the Reuter decision, all that has changed:  a miss by a day, a month, or a year all entitle the employee to treble damages for the entire amount that should have been, but was not, paid on the employee’s last day.

Practical Considerations

The question then is, what is an employer to do if it needs to “part ways” with an employee but cannot arrange final payment right away? The SJC addressed this scenario directly in Reuter, and suggested that the only viable solution is to suspend the employee pending termination and final payment. Further, while the SJC did not directly address whether this type of suspension –i.e., one simply to arrange for final wages – must be paid or unpaid, it would be prudent to provide the suspension with pay in order to avoid any appearance that the employee’s employment ended on the date of suspension.

Some special mention needs to be made about the complicating aspect of remote work, especially in light of the dramatic increase in this mode of working. For a variety of reasons, it is very difficult for an employer to correctly time and sequence termination and final payment for the same day for a remote worker. It is also awkward, to say the least, to call a worker “in,” just to terminate him or her. How then to heed the Reuter decision when it comes to remote workers?

One of the only exceptions in the Wage Act’s strict timing mandates is when workers are “absent” from their “regular place of labor at the time of payment.” Does this exception apply to remote workers? Unfortunately, there is no clear answer to this question as yet, and a remote worker might be able to successfully argue that the situs of their work has shifted to their home so that they are not absent from their regular place of work. For this reason, we suggest that for now, and until this question is clarified, an employer should either arrange for payment on the remote worker’s last day, or suspend or place the remote work on leave, with pay, until final payment can be made.

In sum, in light of the Reuter decision, employers must carefully plan and prepare for nearly all terminations in order to avoid a failure to pay all final wages on the last day of employment.

Chair of the employment law practice group at Prince Lobel Tye LLP, Dan has more than 25 years of experience in the field of employment law and litigation. He has represented businesses of all sizes in a wide range of matters, from discrimination and harassment complaints to claims involving misuse of trade secrets, privacy rights actions, and wrongful termination litigation.  Dan can be contacted by email at dtarlow@princelobel.com.


If you have any questions about the information presented here, or have any employment law concerns, please contact Daniel Tarlow, chair of the firm's Employment Practice Group, at 617 456 8013 or dtarlow@PrinceLobel.com.

Thursday, April 21, 2022

Free Advice, Well Worth the Price.

Robert M. Ruzzo

Despite the relative dearth of political headlines at the time of this writing (mid-spring), Massachusetts


is actually in the throes of a Governor’s race this year. The Housing Watch does not wish to back a particular candidate in this fight, but will always grab the opportunity to put housing in any headline. Given the fact that pandemic shortages and supply chain price pressures are now being coupled with interest rate increases aimed at curbing inflation, there are storm signals all along the housing horizon. Compelled by this confluence of events, your humble correspondent dares to share some thoughts about housing as a campaign issue and, more importantly, housing as a priority for any incoming administration, regardless of its political stripe.


We’re Number One?

Occasionally, it’s helpful to at least consider the experiences of those who have gone before you. And in all candor, this column does not recall the outgoing governor focusing much on housing during the halcyon days of the 2014 election cycle. Governor Baker campaigned as an experienced manager with financial and health care management credentials. To be candid, he came into office bringing with him the sympathies of a Swampscott selectman when it came to the demands being placed on the municipal level of government by the state. Not exactly the profile of your typical housing stalwart. All of this was swiftly overshadowed by the great "Snowmaggedon” and its aftermath, particularly its impact on the MBTA. While transit service is irrevocably intertwined with housing (hope you’ve been paying attention), the priority was, to borrow a health care term, simply to get the patient (the MBTA) ambulatory first. Then, during the second term, there was this little matter known as Covid 19. 

That's why it was particularly revealing to hear the governor, in his final speech before the Greater Boston Chamber of Commerce (somewhat akin to a commencement address) identify housing as the "principal headwind" facing the Commonwealth in the future. It's not quite the same as an outgoing President Eisenhower warning about the military-industrial complex, but it should make everyone think. Housing needs to be the priority for any incoming administration. That's not The Housing Watch talking, that’s the voice of hard-earned experience.


Build, Baby, Build!

No, The Housing Watch hasn’t “gone rogue,” but the harsh truth is current housing production levels are half of the already inadequate levels from thirty years ago. Rising construction costs and interest rates aren’t going to make things any easier. We need to focus both on the construction process itself, including exploring prudent means of greater reliance on modular construction in a way that does not irrevocably alienate union sensibilities and we need to focus intensively on the permitting/preconstruction side of the equation, seeking out what will really motivate municipalities to welcome more housing and what land use regulation techniques will deliver that production efficiently. Implementation is the most difficult stage of any policy, so that means, in particular, focusing on implementation of the new Section 3A of Chapter 40A, and its authorization of “as of right” MBTA multi-family zoning districts. Tweaking broader issues related to that goal, such as the consequences for failing to comply with new Section 3A, should be prioritized, notwithstanding The Housing Watch’s sympathy with the notion of adopting the “as of right” multi-family zoning concept state-wide.


It's About the Infrastructure, Stupid!

Speaking of zoning, there's more than one kind of infrastructure. Hard infrastructure, such as utilities (particularly water and sewer) are obviously vital to greater production and density. And that’s a great rationale for fostering ever more multi-family housing in the Commonwealth’s Gateway Cities where the infrastructure likely needs a solid upgrade rather than full scale installation.  

But there's a second kind of infrastructure and that's land use regulatory infrastructure. Here’s where Massachusetts falls down miserably, due largely to our notoriously outdated zoning enabling act, compounded by our snowflakish desire to proliferate local environmental regulations. If we are going to continue to go beyond state-wide environmental standards, better training at the local level is simply a must.  

The Housing Watch supports a dual track approach. And yes, that means tackling full scale zoning reform. But it also means first improving the carrot and stick tools we have such as Chapter 40R and Chapter 40B (more about that next time) and implementing the new Section 3A. If these tools can be tweaked enough to make continued opposition to housing production at the local level sufficiently burdensome, the eternal optimist can see an opening for the large-scale zoning reform that the Commonwealth really needs. 


Affordable Housing Doesn’t Need to Be this Complicated.

Every Affordable Houser has a horror story (or ten) about mixing multiple sources of subsidy from different entities in order to make an affordable development work. Long ago, Massachusetts’ subsidizing agencies wisely banded together to produce a “uniform” set of documents (known as “MassDocs”) to make legally tracking the requirements imposed by these various sources comprehensible. That’s been very helpful, as far as it goes, but since we have an Affordable Housing Trust in this state, one that can accept “donations” by the way, wouldn’t it be easier to “launder” (excuse me, “funnel”) the various sources through the Affordable Housing Trust and then have the subsidizing agencies provide simplified form and content for the restrictions? 


Ownership Equals Opportunity. 

Our time grows short. But this may be the most important point of all. More simply has to be done on the homeownership front in affordable housing (beyond the federal proposal for a homeownership tax credit). This may mean experimentation with the once heretical notion of “burning off” affordability restrictions on resale over time, even if that means fewer affordable units in theory. The Housing Watch is fascinated by the proposal made by the My City at Peace-HYM Investments team with respect to the P-3 parcel in Roxbury. It raises the possibility of affordable homeownership units with restrictions that fall away after fifteen years. The Housing Watch will keep a lookout for similar experiments. If we can change the municipal mindset on housing production, we can generate both new restricted units and a new generation of middle class, particularly among traditionally underrepresented communities. 

We also need to encourage new thinking about incentivizing the private sector to integrate housing assistance into the employee compensation equation.


One Last Thing. 

Can our new governor please get behind the notion of expediting (not eliminating, but really expediting) abutter (not municipal) appeals involving affordable housing developments? 

Please? 

Until next time.

Co-chair of the REBA affordable housing section, Bob Ruzzo is a former Massachusetts Deputy Secretary of Transportation. He also served as the Deputy Director/Chief Operating Officer at both MassHousing and MassDevelopment.  His column, “The Housing Watch…” will be a regular feature in REBA News and on the REBA Blog He can be reached at bob@bobruzzo.com. 


 

Thursday, April 14, 2022

21-Day Timing Provisions in the Wetlands Act Are Obligatory and Pre-Empt Local Wetland Bylaws

Gregor I. McGregor, Esq.

Local wetlands bylaw (or ordinance) jurisdiction over projects in and near resource areas depends on Conservation Commission


compliance with the 21-day deadlines for commencing public hearings and issuing decisions on Notices of Intent (NOI). Indeed, you may safely regard those timing provisions in the state Wetlands Protection Act (the Act) as binding on the Commission, with failure to meet them potentially fatal to any decision the Commission may render. 

Recall that a Commission loses its “Home Rule” wetland bylaw control (with the result that the applicant has no need for the local permit) if it fails to issue its denial, permit or other decision by the deadline of 21 days from the close of the public hearing and the applicant appeals this inaction to the Massachusetts Department of Environmental Protection (MassDEP) under the Act. This is by virtue of the Supreme Judicial Court’s 2007 decision in the Oyster Creek case. 

Now, by virtue of the Massachusetts Appeals Court’s decision in the 2022 Boston Clear Water case, the Commission loses its control, and the applicant does not need the local wetlands permit, if the Commission fails to convene the public hearing by the deadline of 21 days from the NOI being filed and the applicant appeals to MassDEP under the state Act. This is no matter what is the eventual result of any Commission hearing.

These two seminal cases, important in wetlands protection jurisprudence, are cited as Oyster Creek Preservation, Inc. v. Conservation Comm’n of Harwich, 449 Mass. 859, 866 (2007) and Boston Clear Water Company, LLC v. Town of Lynnfield, No. 21-P-166, 100 Mass. App. Ct. 657 (Mar. 23, 2022). 

The upshot of either untimely default by the Conservation Commission is that the project is no longer subject to the municipal bylaw and, in most situations where this comes up, the only wetlands permit needed for an applicant’s project is the Order of Conditions from the MassDEP on appeal under the state Act. 

These legal results are so clear from these two court cases that litigation between the applicant and city or town should not be needed in the typical situation to recognize the loss of Commission jurisdiction when it misses a deadline. A missed date to start the hearing or to issue the decision after the hearing is simply a matter of fact. 

Likewise, an appeal to MassDEP should not be needed in the occasional situations when the project is pending only under the bylaw or when the Commission has already approved (or agrees to approve) the project under the Act. A Superseding approval from the state is not necessary. Consult your counsel for tactical advice in these and other variations.

The results in Oyster Creek and Boston Clear Water came from applying the doctrine of preemption of municipal regulatory authority by the superseding authority of the Commonwealth, based on the intent of the 21-day time frames in the state Act. Home Rule authority of cities and towns, while regarded as very broad and deep in Massachusetts, is nonetheless subject to state preemption in certain circumstances. 

One such circumstance is when the Legislature has made specific provision for a procedure with which a city or town may not conflict.  The 21-day periods specified in the state Act for convening the hearing and issuing the decision, as interpreted in these two court decisions, are such specific provisions and thus critical timelines to meet for the municipality to be able to exercise its Home Rule wetlands power.

At issue in the Boston Clear Water case was whether the Lynnfield Commission’s failure to conduct a hearing within 21 days of receiving the Notice of Intent, pursuant to G. L. c. 131, § 40, and its town wetlands protection bylaw, caused it to lose its authority over the proposed project and as a result forfeit the right to apply and enforce its bylaw.

While under Home Rule principles enunciated in earlier decisions about the state Act and local bylaws, the general rule is that if provisions of a local wetland bylaw are more stringent than the Act, those provisions will apply, that freedom does not apply to the statutory time frames for opening hearings and issuing decisions. 

In other words, the Lynnfield Commission’s failure to commence its public hearing within 21 days was not discretionary, it could not unilaterally reschedule the date for later, and so the Commission lost its jurisdiction to MassDEP when the applicant appealed to the state agency. 

You may regard this as a legal forfeiture of the right which the municipality otherwise has to regulate work and activities under the Bylaw with its local requirements.  Consequently, MassDEP’s Superseding Order of Conditions controls. 

The Appeals Court described in detail the procedural setup under the Act and Lynnfield bylaw, both of which contain the 21-day period, saying:

Notably, the failure to conduct a timely hearing and the failure to issue a timely decision following a hearing result in the same consequence under the same provision of the act--in both instances, the act authorizes the applicant to request an order of conditions from the DEP. See G.L. c.131, §40.  In Oyster Creek, 449 Mass. 866, the court made explicit that “the timing provisions in the act are obligatory, and a local community is not free to expand or ignore them,” even where a conservation commission is seeking to enforce provisions of a local bylaw that are more protective than the act.

The Appeals Court saw the Supreme Judicial Court’s ruling in Oyster Creek as binding precedent as to the beginning of the public hearing, concluding: 

As a result, we are constrained under Oyster Creek to conclude that, by failing to conduct a hearing within the act's twenty-one-day mandatory time period, the commission lost the authority to regulate BCWC's project under the town bylaw. The DEP's superseding order of conditions approving the project thus controls.

It bears emphasizing what the Appeals Court found most significant in the Oyster Creek decision where that SJC observed that the Act’s "timing provisions" --in the plural--are "obligatory

The facts of the Boston Clear Water case were mostly uncontested. The applicant, owner of a public water supply, filed an NOI to construct improvements to an existing enclosed spring house that protects the spring. 

The Commission was unable to convene a quorum within 21 days, did not obtain from the applicant a waiver of the deadline, and commenced the hearing late. Even though the applicant did not participate and made clear its position that it did not need Commission approval, the Commission held several hearing sessions without the applicant and denied the OOC for lack of participation or lack of information. 

The applicant already had appealed to MassDEP the Commission’s failure to open the hearing in timely fashion, as per the Act and MassDEP Regulations, and MassDEP had issued a Superseding OOC approving the project. The court case arose because the applicant sued the Commission seeking a ruling to confirm the invalidity of its late hearing and decision. 

The Commission won in the Superior Court, but the Appeals Court overturned that short-lived victory, for the essential reason that the “timing provisions” in the Act are “obligatory,” under the Act an applicant may appeal noncompliance to the MassDEP, and the resulting Superseding OOC will govern. 


These Oyster Creek and Boston Clear Water holdings, both of which dealt with Commission disapprovals of proposed projects (either after the time for commencing the public hearing or after the time for issuing a decision), which unhappy applicants challenged, will apply as well to approvals, denials or other decisions that are late. Therefore, these cases warrant renewed close attention to the Commission’s timing of all its hearings, meetings, and decisions. 

Commissions, their staff, the applicants, their consultants, and any legal counsel involved should be sure to attend to these 21-day time periods, even though at times that can be challenging, inconvenient, difficult, and even impossible.

Fortunately, there is available the common practice, usually by mutual courtesy, where the applicant and Commission arrange to time the NOI filing to fit the Commission hearing schedule, agree to leave the hearing open (continuing it to dates certain) until all the relevant information is received for the administrative record, plan carefully the Commission meeting(s) for deliberations after the hearing has closed so as to not run out of time, manage efficiently the drafting and circulation of the OOC or other decision for vote, signature and issuance, leave time for the necessary hand delivery or US Postal Service mailing, or, if time is about to expire, secure the applicant’s written waiver of the legal deadline. We recommend it be in writing for a clear record to avoid any doubt or dispute. 

When the applicant’s consent to variation of a 21-day period is not possible, however, the Commission should attend to its obligations by some other means or risk losing its regulatory power over the project. 

We alert the reader that Oyster Creek and Boston Clear Water likely may be regarded as governing one other type of Commission action that is subject to the same 21-day deadline in the Act. The Commission must act on a Request for Determination of Applicability within 21 days of it being filed.  This does not involve convening and conducting a public hearing under the Act, as you know, just a meeting of the Commission. Because there is no hearing, this administrative task is easier to schedule. If needed, the Commission deal with it in an emergency meeting if the regular schedule does not allow.

Here is the phrasing in the Act which we think comprises the “timing provisions” the courts are referring to in making these preemption rulings: 

“If a conservation commission has failed to hold a hearing within the twenty-one day period as required, or if a commission, after holding such a hearing has failed within twenty-one days therefrom to issue an order, or if a commission, upon a written request by any person to determine whether this section is applicable to any work, fails within twenty-one days to make said determination….”

We advise that Oyster Creek and Boston Clear Water appear to govern RDAs because the 21-day deadline for the Determination of Applicability appears in the same text as the deadline for the hearing to commence and the decision to be issued which, if unmet, triggers a right to appeal the inaction to MassDEP for a superseding decision. 

We leave to another day the impact of these decisions, if any, on the other 21-day deadline in the Act, which is not appealable to MassDEP, for the Commission to act on a Request for a Certificate of Compliance. MassDEP does not entertain appeals from COC decisions. The remedy is likely an appeal to court for a writ of mandamus to compel this action by the Commission.

A founder and current co-chair of REBA’s Environmental Law Section, Greg McGregor is also the founder of the Boston-based environmental law firm, McGregor & Legere, PC, which handles environmental, land use, and real estate matters, plus related litigation. He is also a founding member of the Environmental Law Network, an alliance of specialty law firms in the United States and abroad, sharing expertise and experience for the benefit of their clients. Greg can be contacted by email at gimcg@mcgregorlaw.com.


Thursday, April 7, 2022

Project Labor Agreement Requirement Invalidated

In Massachusetts, it is not unusual for public construction contracts to include Project Labor Agreement (“PLA”) provisions that mandate


a successful bidder only hire union laborers and subcontractors. The purpose behind this is that union labor, though more expensive because of prevailing wage regulations, will agree not to strike or engage in work stoppages, thus ensuring public projects are completed within deadlines, which is important to cities or towns building new schools. 

Recently, a group of non-union contractors, joined by their association, challenged the PLA requirements for a school building project in the Town of Braintree. These plaintiffs brought suit in the Superior Court seeking to force Braintree to open its bidding process to non-union shops. The Court, in a 15-page, well-reasoned analysis agreed with the plaintiffs and forced Braintree to open its bidding to any qualified contractor, whether staffed by union labor or not.

In Massachusetts, bidding for public projects is governed by M. G. L. c. 149, §§44A-44H, the Competitive Bidding Statutes. The purported goals of these statutes are to ensure transparency, make certain the awarding authority obtains the lowest price and establish transparency in the bidding procedure. In a 1999 decision, John T. Callahan & Sons, Inc. v. Malden, the SJC opined that while PLAs discourage competition, they may be beneficial based on the size, scope, timing and complexity of public projects. The Callahan decision provided a framework for using PLAs, requiring the agency putting out the bid to meet a two-part test. For a PLA to be upheld, the project must (1) be of such a size, duration, and complexity that the goals of competitive bidding cannot be achieved without the PLA, and (2) the record shows that the awarding authority followed a careful and reasoned process that concluded that a PLA furthered the statutory goals of transparency and cost.

In the Braintree case, the Superior Court analyzed whether the non-union plaintiffs could meet their burden to succeed in seeking preliminary injunction relief. The plaintiffs needed to show that they (1) had a likelihood of success on the merits, (2) would be irreparably harmed if the injunction did not issue, and (3) such harm outweighs any risk of harm to the opposing party.  

The Court held that the non-union plaintiffs met this burden. First, the Court focused on whether the Town of Braintree’s use of the PLA satisfied the two-pronged Callahan test. It determined the town could not show the middle school project was of such a large scope, under a tight deadline, or so complex as to justify a PLA because the project was only one of six schools that were being built or renovated. In addition, the town had hired non-union contractors on some of the other school renovation projects. Finally, the Callahan decision stated that construction of a single school was not a high-caliber project that justified a PLA. The facts on the second prong of the Callahan test showed that there was no robust, reasoned, careful process outlining why a PLA furthered the statutory goals of transparency and cost. In fact, only three members of the Braintree committee argued in favor of the PLA (the mayor, the town solicitor and the committee vice-chair), and no debate or weighing the pros and cons of a PLA could be found on the record. The Court held that the plaintiffs met the first prong of the preliminary injunction standard and satisfied the Callahan test.

The Court then looked to the second and third prongs and held that if the PLA were to stand, the plaintiffs would be irreparably harmed because they would be blocked from bidding on the middle school project. The court held that the disadvantages facing nonunion contractors when bidding under a PLA standard in effect makes them unable to compete for the work.  

With respect to the balance of harms, the record showed that if the injunction were to be granted the Town of Braintree would have to re-open the bids for the job. The Court determined there was still ample time for this process to commence and for the winning bidder to start and complete the work within the desired timelines.  

The Court’s decision underscores that a town should not simply rely on PLAs to ensure union, prevailing wage labor is used. Reading between the lines, political pressure to secure union-only labor will not suffice if non-union bidders challenge the PLA.  

An associate at Rudolph Friedmann LLP, George practices in the areas of real estate conveyancing and general litigation.  A REBA member since 2005, George represents buyers, sellers and lenders in residential real estate and has cultivated strong relationships with real estate professionals, lenders, builders and developers. In addition, George has an active litigation practice representing landlords in disputes with tenants, bringing actions or defending against claims in business disputes, and representing buyers and sellers of commercial enterprises such as restaurants, shops and professional offices. George can be contacted via email at ggeorgountzos@rflawyers.com.