Whether a retaliation claim may lie under c. 151B where the employee was terminated three years before the employer’s alleged retaliatory action; whether board members may be liable for tortious interference with their own corporation’s contract.

Plaintiff Psy-Ed, a magazine publisher, employed defendant Kimberly Schive in its Boston office from 1993 to 1996. In 1996 Psy-Ed closed the Boston office and fired most employees. Schive, who is deaf, filed MCAD claims in 1997 alleging discrimination and retaliation. Defendant Stanley Klein, Psy-Ed’s editor-in-chief, initially gave an affidavit denying discrimination. After being terminated and failing in an attempt to take over Psy-Ed’s board, however, he issued a second affidavit supporting her claims.

In 1999, MCAD found probable cause for Schive’s discrimination claim. Psy-Ed’s board immediately granted CEO Joseph Valenzano’s request to file suit against Schive and Klein, with various claims arising from factual allegations related and unrelated to the MCAD claim. Schive and Klein brought counterclaims including retaliation under c. 151B, abuse of process, and tortious interference with a contract, eventually joining the directors as third-party defendants.

The judge eventually dismissed all claims by Psy-Ed, and found for Schive and Klein on their counterclaims. All parties appealed, and the SJC transferred the case sua sponte from the Appeals Court.

The parties raise many issues in this sprawling case. Two may be of particular interest:

1. Post-termination retaliation. The judge found that Psy-Ed’s lawsuit in 1999, shortly after MCAD found probable cause but three years after Schive’s termination, constituted retaliation in violation of G.L. c. 151B, § 4(4). Psy-Ed argues that it cannot be liable for retaliation for conduct occurring after Schive’s termination, because retaliation requires an “adverse employment action.” Schive argues that Sahli v. Bull Hn Information Sys., Inc., 437 Mass. 696 (2002), assumes that employers can be liable for conduct occurring after termination.
2. Tortious interference with contract. The judge apparently found that Valenzano and the other directors were liable for tortious interference with a settlement agreement between Psy-Ed and Klein, which they voted to cancel at the same time they approved the lawsuit. The directors argue that they cannot be liable for interfering with a contract entered by their own corporation, unless Klein shows that they were motivated by actual malice rather than corporate interests, citing Blackstone v. Cashman, 448 Mass. 255 (2007). Klein implies that cases prior to Blackstone support a standard of ill will rather than actual malice, but in any case that the judge’s findings support an actual malice finding against the directors.

1. Post-termination retaliation. It seems clear that a retaliation claim can be supported by employment-related activities after termination, such as refusal to give references or a sham lawsuit related to prior employment. The Court will have to decide whether retaliation claims may lie for retaliatory lawsuits that are less related to employment, such as the defamation suit in this case. 
2. Tortious interference with contract. This case may give the justices a chance to rehash the argument in the 4-3 decision of Blackstone, where the Court split on whether directors should receive a higher standard of review in interfering with their own corporation’s contracts than unrelated third parties. (Since Blackstone, two new justices have joined the Court.) It makes sense that directors would be presumed to have acted on behalf of the corporation, and therefore only face liability if the plaintiff shows they were acting entirely in their own interests.