In Cook v. Patient Edu, LLC, 2013 WL 2501940 (Mass.), the Massachusetts Supreme Judicial Court has held that under Massachusetts state law (specifically, the Wage Act), managers of a limited liability company can be found liable for unpaid wages to employees of the LLC.

This would seem to fly in the face of the general principle (codified in most LLC Acts, including in Section 22 of the Massachusetts LLC Act) that absent extraordinary circumstances, managers and members of LLCs are not liable for the debts of the company.  As LLC Law Monitor notes:

[T]he court’s holding is clear: LLC managers who control and direct the LLC will have potential personal liability for the LLC’s failure to pay all wages owed to the LLC’s employees. And although the facts of this case only involved LLCs, the court said that its rule applies to managers or other officers or agents of limited liability partnerships and other limited liability business entities.

Practitioners should remember that the potential personal liability of LLC managers can be quite punitive, because the Wage Act provides for treble damages and attorneys’ fees for an employee or former employee suing for unpaid wages.

This decision will likely cause some consternation to managers of Massachusetts limited liability companies, or of LLCs organized under the laws of other states that employ people within the Commonwealth.