April 2013 Newsletter

    Marc Redlich with German Ambassador Peter Ammon. (Photo by Dominic Tschoepe)
Dear Friends and Colleagues,

    It was a cold, snowy winter here in New England, but springtime has finally arrived.  I hope you and your family are well, and enjoying the warmer weather.  Over the past six months, we have been involved in a number of matters that I thought might be of interest to you.

    In one case, a small consulting firm was hired by my corporate client under several contracts to provide a range of consulting services.  One of the contracts provided that the consultants would provide services “equivalent to an interim COO and an interim Vice-President-Operations.”  The consulting firm was to be paid a set amount each month as a consulting fee for their work.  When my client declined to pay some of the monthly fees (for substantial reasons having to do with performance issues), the consultants and their attorneys claimed that in fact they should have been treated as employees for purposes of the Massachusetts Wage Act. 

    Not generally known to the business community is that there are three requirements, all of which must be met by the hiring entity, or else a “consultant” or “independent contractor”, even with a signed agreement, will be treated as an employee for purposes of wages and tax withholding.  The key statute provision in our case was that a person “shall be considered to be an employee unless: . . . the service is performed outside the usual course of the business of the employer.”  The consulting firm and its attorneys argued that having someone perform the services of a Chief Operating Officer and interim Vice President-Operations could not be deemed to be outside the “usual course of business” of the corporation.    
    I’ve been involved in other Wage Act cases, including where an individual was hired as an outside salesman or independent contractor, so I was concerned about how this case would eventually turn out, especially where the appellate courts have issued a series of decisions strictly enforcing the wage statute.  We had some strong facts and arguments to present in my client’s favor.  In the usual case of a contract claim by a consultant, the worst case scenario is that the company might owe the full amount claimed plus interest.  Here the downside was far more precipitous:  a possible judgment against not only the corporation, but also its responsible officers and directors, for three times the amount earned, plus interest and the other side’s attorney’s fees.  Such is the in terrorem effect of our Wage Act.  To paraphrase the old expression, employer beware.  In our situation, weighing all of the pros and cons of the case, the decision was to settle the case.  The good news is that both sides are now  working together for the benefit of the corporation and its shareholders.

    We are presently defending a case which involves a dispute of well over a million dollars between two corporations.  We believe strongly that our side is right and that the other side is wrong in this situation, and we are defending the case vigorously, as well as bringing counterclaims against the other side.

    We are also working on two school-related cases.  One is a “reverse discrimination” case in which a white male college professor at a state university was terminated during his probationary period due to what we believe was gender and racial bias compared to other less qualified minority faculty members.  Our laws provide that all persons, of whatever race, nationality and gender, are entitled to equal treatment in hiring and retention decisions. We also represent a young student who we believe was the victim of handicap discrimination at her private secondary school.  Both of these cases are in the early stages of legal proceedings.

    We have some cases that pose some interesting legal conundrums.  In one, I was named executor of the Will of an elderly woman, originally from Europe, who lived in the U.S. for many years.  When she passed away last year she was widowed, with no children or siblings.  We are in the process of searching out her next of kin, as required by our Probate Court.  Since the closest relatives are likely to be children of her cousins, this is quite an undertaking, in which we are being assisted by a genealogist in Europe.

    I am deeply honored and appreciative that the Board of Directors and past Stratton Laureates of Friends of Switzerland have chosen to award me the 2013 Stratton Prize. On May 17, at the Harvard Club of Boston, I will receive the award that I have been conferring on behalf of FOSI for these past two decades.  I look forward to seeing many of my friends and colleagues at the Dinner. 

    The Boston Warburg Chapter of the American Council on Germany had several events that it sponsored over the past year.  The ACG has cooperated in the “German Conference at Harvard.”  At last year’s conference, I had a chance to meet and talk with Hon. Peer Steinbrück, the former Federal Minister of Finance of Germany, and presently the candidate of the Social Democratic Party (SPD) for Chancellor in the next national election.  At this year’s event, held in February, I met the recently-appointed German Ambassador to the United States, Hon. Peter Ammon.

    Swissnex, the Swiss Consulate of Boston, recently held a Basel-Boston event, celebrating the relationship between these two cities.  As some of you may recall, I was involved in helping to establish a Sister State Agreement between the Canton of Basel-Stadt and Massachusetts.  At this year’s Swissnex event, Basel Cantonal Councilor Eva Herzog and Cambridge City Councilor Leland Cheung were both present to address the audience of Swiss and Americans. Photos from these events are enclosed.

    We have had a very productive six months in a steadily improving economy.  As always, we are grateful for the opportunity to represent our clients, and thank those of you who have referred clients to us.

    We continue to practice in a wide range of legal areas, including corporate, business and commercial law, trials and appeals, real estate issues, employment, discrimination, divorce and university law.  If you have any questions about our areas of practice or about any legal matters where we can be of assistance to you or someone you know, please do not hesitate to call on me.


                            Marc Redlich


Marc Redlich with Basel-Stadt State Councilor Eva Herzog and Cambridge City Councilor
Leland Cheung at Basel-Boston Conference held at Swissnex in Feb. 2013. 
(Photo by Matthias Geering/Artinside)

Marc Redlich with Germany's former Economics Minister Peer Steinbrueck,
who is now head of the Social Democratic Party (SPD) of Germany.
 (Photo by Tilman Dette)

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