CLIENT ALERT – Massachusetts High Court Clarifies Rule for Release of Wage Claims

The Massachusetts Supreme Judicial Court recently clarified that a general release between an employer and employee will only be enforceable as to claims under the Massachusetts Payment of Wages Act if the agreement is stated in “clear and unmistakable terms” and is “plainly worded and understandable to the average individual.” An enforceable release also must specifically refer to the rights and claims under the Wage Act that the employee is waiving. While the Court held that general releases are ineffective to bar claims under the Wage Act, it failed to either provide illustrative, enforceable releases or define the phrase “clear and unmistakable terms.”