Stephens v. Global NAPs (Massachusetts Appeals Court)

This case challenges a guideline of the Massachusetts Commission Against Discrimination (“MCAD”) concerning an employer’s liability under the Massachusetts Maternity Leave Act (“MMLA”), Mass. Gen. Laws ch. 149, § 105D. The MMLA requires that pregnant female employees must be provided with eight weeks of unpaid maternity leave and reinstatement to their positions at the end of the eight weeks. At the same time, in order to encourage more generous maternity leave policies than the statutory maximum, the MMLA expressly allows employers to agree to more generous benefits, such as a longer leave period. An employer who violates the MMLA’s requirement of eight week’s leave with reinstatement is subject to extensive statutory remedies, including emotional distress damages, punitive damages, and reasonable attorney’s fees. The MCAD has issued a guideline stating that when an employer offers a longer leave period, unless the employer gives advance written notice that full MMLA rights will not apply, the statutory remedies will apply if the employer breaches its agreement to a longer leave. This case raises the issue whether an employer who violates its agreement or policy for a leave period beyond the MMLA’s maximum eight weeks is subject to these enhanced statutory remedies or is only liable for normal contract damages. Relying on the MCAD guideline, the plaintiff in this case, Sandy Stephens, brought suit in the Massachusetts Superior Court under the MMLA against her employer, Global NAPs, when she was terminated from her job after taking an extended maternity leave of 11 weeks. Stephens alleged that Global NAPs had agreed to an extended maternity leave of 11 weeks and breached its agreement by terminating her employment before she returned to work. Global NAPs disputed that it had agreed to more than the eight week statutory maximum. Over defense counsel’s objections, the trial court followed the MCAD guideline and instructed the jury that, if it found for the plaintiff that Global NAPs had agreed to a leave greater than the statutory maximum and had breached that agreement, the employer would be liable for statutory damages under the MMLA unless it had provided advance written notice stating that it was not operating under the statute. The jury found that Global NAPs had violated its agreement that Stephens could take an 11 week leave, found that in so doing Global NAPs had violated the MMLA, and awarded Stephens $2.5 million in damages (including punitive damages), which the trial court subsequently reduced to $1,356,130.20. Global NAPs then filed an appeal with the Massachusetts Appeals Court. NELF filed an amicus brief on its own behalf and on behalf of the Associated Industries of Massachusetts (“A.I.M.”), arguing that, by presumptively extending the MMLA’s liability provisions to the entire duration of an agreed-upon leave (unless an employer gives advance written notice that the MMLA will not apply), and not just the first eight weeks that the statute requires, the MCAD guideline contravenes the unambiguous eight-week requirement of the MMLA, discourages the flexibility in private arrangements that the MMLA sought to encourage, and transforms a common law claim for breach of contract into an MMLA violation. NELF pointed out that the MMLA expressly defines “maternity leave” as “a period not exceeding eight weeks,” and that the MMLA does not authorize parties to alter the term “maternity leave” by private agreement. While the MMLA encourages employers to grant “greater or additional benefits” by private agreement or company policy, “maternity leave” is a fixed statutory right, while “greater or additional benefits” are malleable creatures of contract. Therefore, an employer who grants a leave longer than eight weeks has conferred a “greater [contractual] benefit” rather than an expansion of the fixed statutory term “maternity leave.” When an employer grants more than eight weeks leave, that part of the leave period exceeding eight weeks is not “maternity leave” for purpose of the MMLA but is instead a “greater or additional benefit” and is enforceable only by a breach of contract lawsuit. NELF also argued that to extend MMLA liability beyond the MMLA’s eight-week requirement discourages employers from offering more generous leave benefits to their employees. Employers, fearing the risk of exposure to heightened liability attaching to their agreements or company policies under the MCAD guideline, will be disinclined to offer more than what the MMLA requires. Consequently, employees will lose the benefit of longer leave periods and the flexibility of bargaining for a leave period appropriate to their particular circumstances. For all of these reasons, NELF argued that the MCAD’s guideline is invalid and that the damages awarded to the plaintiff under the MMLA were improper.