Background
Gerard Fontana and John F. Walsh served as senior nonunion, salaried chiefs in the Boston Fire Department—Fontana as chief of field services and Walsh as chief of support services. When both retired in 2020, the city paid them substantial sums for unused personal, sick, and vacation time: $239,162.99 to Fontana and $170,486.26 to Walsh. The plaintiffs claimed, however, that the city still owed them additional payments for unused “compensatory time”—$70,083.02 for Fontana and $55,328.70 for Walsh.
The compensatory time at issue arose from a two-page document titled “Essential Duties and Compensation Schedule,” which governed the plaintiffs’ compensation. That document contained a multistep formula called “Annual Vacation Redemption.” Under the formula, eligible chiefs with at least one year of service could convert up to ten days of unused vacation time into both a cash payment and a corresponding bank of “compensatory time.” The newly created compensatory time could be carried over at year’s end with written approval from the Fire Commissioner. Over the years, both plaintiffs accumulated substantial banks of compensatory time that they never used and, upon retirement, sought to convert into cash.
A Superior Court judge granted summary judgment in favor of the plaintiffs, doubled their damages under the Massachusetts Wage Act (G.L. c. 149, § 148)—a statute that requires employers to pay employees all wages earned, including vacation pay, upon separation from employment—and awarded Fontana $298,102.29 and Walsh $196,367.14, inclusive of interest and attorney’s fees. The city appealed.
The Court’s Holding
The Massachusetts Appeals Court reversed. Writing for the panel, Judge Hodgens concluded that the compensation schedule did not entitle the plaintiffs to convert their unused compensatory time into cash. The court explained that compensatory time was merely the “end product” of a formula already used to redeem unused vacation time. The plaintiffs had already received both cash and compensatory time for those vacation days. Nothing in the governing document envisioned—let alone required—a second conversion of the resulting compensatory time back into cash. The court emphasized that the document was not ambiguous on this point but was “simply silent,” quoting the longstanding principle from Marcelle, Inc. v. Sol & S. Marcus Co., 274 Mass. 469, 474 (1931): “There is no room for the construction of doubtful words, for there are no words whatever.”
Turning to the Wage Act claim, the court held that compensatory time derived from the vacation-redemption formula did not constitute “wages earned” within the meaning of the statute. The Wage Act requires payment of wages earned, holiday or vacation payments, and in some circumstances commissions—but is silent as to compensatory time. Because the compensatory time did not arise from any “labor, service, or performance” by the plaintiffs, it could not qualify as wages. Instead, the court characterized the accumulated compensatory time as, at best, something akin to a “contingent bonus”—a category the Supreme Judicial Court has held falls outside the Wage Act’s protections.
The court also rejected the plaintiffs’ argument that their compensatory time was analogous to the overtime-replacement compensatory time at issue in Plourde v. Police Dep’t of Lawrence, 85 Mass. App. Ct. 178 (2014). Unlike Plourde, where a collective bargaining agreement explicitly provided compensatory time “in lieu of overtime wages,” the compensation schedule here prohibited overtime and made no mention of compensatory time outside the vacation-redemption formula. The case was remanded for entry of summary judgment in favor of the city.
Key Takeaways
- Silence is not ambiguity. When a compensation agreement does not address a particular form of payout, courts will not read one in. The absence of a provision for converting compensatory time into cash at retirement meant no such right existed.
- The Wage Act does not cover all forms of accrued time. Compensatory time derived from a vacation-redemption formula—rather than from labor, service, or performance—does not constitute “wages earned” under G.L. c. 149, § 148.
- Contingent and derivative benefits are outside the Wage Act’s reach. Accumulated compensatory time that depends on multiple discretionary steps (eligibility, election, commissioner approval) resembles a contingent bonus, not earned wages.
- Municipal employers should review compensation schedules carefully. Ambiguity in leave-conversion formulas can invite costly litigation; precise drafting that addresses what happens to accrued time at separation is essential.
Why It Matters
This decision reinforces important limits on the Massachusetts Wage Act’s reach in the public employment context. Municipal employers and their counsel should take note that the Appeals Court drew a clear line: derivative leave categories manufactured through internal conversion formulas are not automatically “wages earned” that must be paid out at separation. The ruling provides a significant precedent for municipalities facing claims from retired employees seeking cash payouts for accumulated leave banks that were never contemplated as cash-equivalent benefits.
For employment practitioners advising public-sector clients, the case is a reminder that the Wage Act’s treble-damages framework does not extend to every form of accrued benefit. At the same time, the decision underscores the importance of clear drafting in compensation agreements: because the court’s reasoning turned on the silence of the governing document, municipalities would be well served to state explicitly whether accrued compensatory time is or is not payable at separation. The cost of ambiguity—or silence—can be years of litigation and six-figure exposure.