Background
Nikola Zdunic filed suit against Ajay Reddy, the founder and CEO of Code Genesys, LLC, for unpaid wages under the Massachusetts Wage Act, G. L. c. 149, § 148. The employment agreement specified that it would be construed under Massachusetts law, and the employment relationship had meaningful contacts with the Commonwealth: Zdunic flew into Boston to begin work, opened a Massachusetts bank account for direct deposit of his paychecks, and returned to Boston at the employer’s direction. A Superior Court jury found for Zdunic, and judgment entered in January 2024. Reddy moved for judgment notwithstanding the verdict and for a new trial; both motions were denied. He appealed.
On appeal, Reddy raised three arguments: (1) Massachusetts law should not apply to the employment relationship because the work was performed partly in Australia and other states; (2) the jury instructions on his personal liability under the Wage Act were erroneous; and (3) the trial judge abused her discretion by excluding and then allowing evidence of settlement negotiations. Reddy also argued that he was entitled to remittitur to prevent duplicative recovery, but he never filed a notice of appeal of the denial of that motion.
The Court’s Holding
Affirmed. The Massachusetts Appeals Court (Shin, Ditkoff & Tan, JJ.) rejected all three arguments. On choice of law, the court held the argument waived: Reddy’s motion for a directed verdict raised only the general sufficiency of the evidence and never mentioned the applicability of Massachusetts law. Under Mass. R. Civ. P. 50(a), a directed-verdict motion must “state the specific grounds therefor,” and a motion that omits a ground does not preserve it for post-trial or appellate challenge. The personal-liability argument suffered the same fate: Reddy never raised the jury-instruction error before the jury retired, as required by Mass. R. Civ. P. 51(b).
Addressing the merits in any event, the court confirmed that Massachusetts law applied: the parties’ express choice of Massachusetts law was valid because the Commonwealth had a “substantial relationship” to the transaction, Taylor v. Eastern Connection Operating, Inc., 465 Mass. 191, 196–97 (2013), and Reddy identified no fundamental policy of any other state that would be contravened by applying Massachusetts law. On personal liability, the evidence that Reddy was the founder, CEO, and “manager” of Code Genesys—his own admissions on the stand—satisfied the Wage Act’s standard that a person “ha[ve] the management” of the corporation. G. L. c. 149, § 148; Segal v. Genitrix, LLC, 478 Mass. 551, 559 (2017). On the settlement-evidence question, the court found no abuse of discretion: the judge properly excluded the evidence under Mass. G. Evid. § 408(a) when Reddy first raised it, but correctly allowed plaintiff’s counsel to open the door during cross-examination, at which point Reddy had the opportunity to follow up. The remittitur claim was dismissed for lack of appellate jurisdiction.
Key Takeaways
- A Massachusetts Wage Act directed-verdict motion that states only “general sufficiency of the evidence” does not preserve more specific arguments—such as a choice-of-law challenge or a personal-liability theory—for appeal. Matley v. Minkoff, 68 Mass. App. Ct. 48, 52 (2007); Mass. R. Civ. P. 50(a).
- An express choice-of-Massachusetts-law clause in an employment agreement is enforceable when Massachusetts has a substantial relationship to the work, and the burden falls on the challenger to identify a fundamental policy of another state that would be contravened—not just a greater interest. Taylor, 465 Mass. at 196–97.
- Under G. L. c. 149, § 148, a founder, CEO, and manager of an LLC who “ha[s] the management” of the entity is personally liable for Wage Act violations as an “employer,” even where the LLC is the direct employer. Cook v. Patient Edu, LLC, 465 Mass. 548, 556 (2013).
- Settlement offers and compromise discussions are inadmissible to prove liability under Mass. G. Evid. § 408(a) once an actual dispute has arisen, but a party that elicits such evidence on cross-examination opens the door to follow-up, and failure to use that opportunity is not reversible error.
- A denial of remittitur must be separately appealed by filing a new notice of appeal under Mass. R. A. P. 4(a)(3); a notice of appeal from the underlying judgment does not encompass it.
Why It Matters
For Massachusetts employment practitioners, Zdunic v. Reddy reinforces two high-stakes points. First, the court’s reaffirmation of personal Wage Act liability for LLC officers tracks directly with the SJC’s holding in Segal v. Genitrix: if a person holds the title of CEO or manager of an LLC and controls its operations, they are personally on the hook for unpaid wages, not just the entity. Given that LLC principals sometimes try to shield themselves behind the entity, practitioners should understand that “founder + CEO + manager” is more than enough to satisfy the personal-liability standard.
Second, the waiver holdings are a potent reminder about the specificity requirements for directed-verdict motions in Massachusetts. Unlike a general demurrer, a Mass. R. Civ. P. 50(a) motion must identify the precise legal grounds the defendant wants preserved. Trial counsel handling complex employment cases should make separate, targeted motions on each theory—choice of law, personal liability, damages—rather than bundling them under a catch-all sufficiency argument. Losing the ability to raise those issues post-trial and on appeal can be outcome-determinative.