New England Biz Law Update
AP Photo/Elise Amendola, File
The former president of Boston Globe Media Partners cannot pursue treble damages — up to three times actual damages — under the Massachusetts Wage Act for the news organization’s failure pay him amounts allegedly due under a profit-sharing agreement, a trial court judge has decided.
Plaintiff Vinay Mehra was named president of The Boston Globe in 2017. He alleged that the company hired him for the express purpose of reversing the organization’s declining revenues. To that end, the parties entered into a profit-sharing agreement under which the plaintiff would receive 5 percent of The Globe’s profits above $5 million, beginning in his third calendar year in the job.
Under the agreement, the plaintiff received $1.4 million as his share of the company’s increased profits in 2019.
However, The Globe terminated Mehra in June 2020, allegedly because he refused to revise his compensation agreement to reduce his share of the newspaper’s profits for 2020 and subsequent years.
Mehra asserted a claim for violation of the Wage Act in addition to claiming breach of contract. He contended that the share of profits he received constituted a “commission” under the act, meaning he was entitled to treble damages and attorneys’ fees for The Globe’s failure to pay him his share of the more than $10 million in profits that it realized in 2020.
But Business Litigation Session Judge Peter B. Krupp granted The Globe’s motion to dismiss the Wage Act claim, concluding that Mehra’s contractual entitlement to a share of the profits did not support a right of recovery under the statute.
“Mehra’s compensation agreement, as alleged, expressly entitled him to a share of the Globe’s profits, not a percentage of revenues he personally generated,” Krupp wrote. “Under the caselaw construing the Wage Act, Mehra’s incentive compensation based on a percentage of the Globe’s annual profit is not a commission protected by the Wage Act.”
