Board Members and Investors Found Not Personally Liable Under Massachusetts Wage Act

Contact: Scott J. Connolly, Member and Roger J. McLaughlin, Morse Barnes-Brown Pendleton
Posted Jan 31, 2018

A unanimous Massachusetts Supreme Judicial Court recently ruled in favor of two former board member-investors of a biotechnology startup, finding the board member-investors not personally liable under the Massachusetts Wage Act for “wages” claimed by the company’s former CEO.

At issue in Segal v. Genitrix, LLC, 478 Mass. 551 (2017) was whether the individual defendants, former board members of and investors in Genitrix, a Delaware LLC based in Boston, exercised sufficient management authority to impose personal liability on them under the Wage Act (M.G.L. c. 149 §148) for compensation due to the plaintiff. The plaintiff, Genitrix’s former President and CEO, claimed that he was entitled to “wages” earned over a two-year period, for which he was not paid.

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