Board of Review Decision 352-N49L-LDDN

The claimant was fired for forming a competing business. Because the employer never communicated that doing so was prohibited, the Board held that the employer did not show that the claimant acted in wilful disregard of the employer’s interest. He is eligible for benefits pursuant to G.L. c. 151A, § 25(e)(2).

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Issue ID: 352-N49L-LDDN

Board of Review Decision

Introduction and Procedural History of this Appeal 

The claimant appeals a decision by a review examiner of the Department of Unemployment Assistance (DUA) to deny unemployment benefits. We review, pursuant to our authority under G.L. c. 151A, § 41, and reverse. 

The claimant was discharged from his position with the employer on July 7, 2025. He filed a claim for unemployment benefits with the DUA, effective July 13, 2025, which was denied in a determination issued on October 6, 2025. The claimant appealed the determination to the DUA hearings department. Following a hearing on the merits, attended by both parties, the review examiner affirmed the agency’s initial determination and denied benefits in a decision rendered on December 15, 2025. We accepted the claimant’s application for review.

Benefits were denied after the review examiner determined that the claimant engaged in deliberate misconduct in wilful disregard of the employer’s interest and, thus, was disqualified under G.L. c. 151A, § 25(e)(2). After considering the recorded testimony and evidence from the hearing, the review examiner’s decision, and the claimant’s appeal, we remanded the case for the review examiner to make subsidiary findings from the record pertaining to the employer’s policies and expectations. Thereafter, the review examiner issued her consolidated findings of fact. Our decision is based upon our review of the entire record.

The issue before the Board is whether the review examiner’s decision, which concluded that by creating a competing business, the claimant had engaged in deliberate misconduct in wilful disregard of the employer’s interest, is supported by substantial and credible evidence and is free from error of law, where, after remand, the findings now show that the employer had not communicated such an expectation to the claimant.

Findings of Fact

The review examiner’s consolidated findings of fact and credibility assessment are set forth below in their entirety:

1. The claimant worked full-time as a Field Service Technician for the employer, a sales and service business for fire pump controllers, from February 20, 2023, through July 7, 2025. 
2. The claimant earned $38.00 per hour working for the employer. 
3. The employer was a small family business. 
4. The claimant was the sole field technician with the operations manager until a second field technician was hired around October of 2024. 
5. The employer did not have a specific rule, policy or expectation that addressed the formation of a competing business. 
6. The employer did not communicate a rule, policy or expectation that addressed the formation of a competing business to the claimant. 
7. The claimant never signed a non-compete agreement with the employer. 
8. The claimant created a website for his own service business for fire pump controllers. (Exhibit #7) 
9. The claimant’s business website was registered and activated on June 20, 2025. (Exhibit #7) 
10. The claimant’s website was public and active as of June 20, 2025. (Exhibit #7) 
11. The claimant created the business website on his personal computer. 
12. The claimant created and developed the business website on his personal time. 
13. The website had its own URL as of June 20, 2025. (Exhibit #7) 
14. The claimant’s business website set forth in part, “(Claimant business) was founded on the belief that fire protection systems deserve expert care and rapid response. With years of experience as a fire pump controller at (the employer), our founder brings unmatched knowledge of systems….We specialize in fire pump controller repairs, NFPA 25 inspections, pump room audits, and 24/7 emergency service. Our mission is to deliver reliable, code compliant solutions that safeguard lives, property and peace of mind— one controller at a time.” The website further set forth, “Our clients benefit from customized service plans, fast 24/7 emergency response, and expert troubleshooting across all major controller brands. From NFPA 25 inspections to full pump room compliance audits, we deliver reliable solutions that prioritize safety, performance, and peace of mind.” (Exhibit #7 pp. 1-2) 
15. The claimant’s business website set forth a contact phone number for fire pump controller sales and services. (Exhibit #7) 
16. On the claimant’s business website, there is a section that people can access that is called “Contacts.” (Exhibit #7) 
17. The claimant’s business website set forth in part, “Use our contact form to connect with us – and let’s ensure your fire protection systems are always ready when it matters most.” (Exhibit #7) 
18. The claimant’s business website set forth the employees working for the business including pictures of the claimant and the Office Manager. (Exhibit #7) 
19. The claimant’s business website did not mention a field service application. (Exhibit #7) 
20. The claimant’s business website set forth the same services that the employer’s business provides. 
21. The claimant’s business website used similar language and terminology as the employer’s website. 
22. The claimant developed a field service computer application for his new business. The field service application could be used by technicians in the field. Among other uses, the claimant’s field service application utilized QR codes that would allow technicians to have access to the history of work done for the customers. The field service application would allow customers to have access to reports immediately. (Exhibit #13) 
23. The employer had an application that they used in the field where technicians created reports on-site and customers could have immediate access to their reports on-line. 
24. The claimant never informed the employer that he developed a field service application for technicians to use in the fire pump controller field. 
25. The claimant never informed the employer that he created a website and started his own fire pump controller service business. 
26. On June 17, 2025, Customer A was scheduled to have an inspection performed by the employer.
27. The claimant, as an employee of the employer, went to perform the inspection for Customer A on June 17, 2025, but the service was not performed on that date. The Service Report for the job sets forth that the reason the claimant did not perform the service was because the customer had not been contacted and would have to reschedule. (Exhibit #6) 
28. Customer A never contacted the employer to reschedule the inspection. 
29. On July 7, 2025, the employer’s secretary and Operations Manager saw the claimant’s Facebook page where he set forth his new fire pump controller business. 
30. On July 7, 2025, the Operations Manager looked up the claimant’s business on the computer and was directed to the website for the claimant’s fire pump controller business. (Exhibit #7) 
31. On or about July 7, 2025, the employer looked up the Domain Information regarding the claimant’s business website. 
32. On July 7, 2025, the Operations Manager called the claimant and asked him about the website. The claimant told the Operations Manager that it was his business. 
33. During the July 7, 2025, conversation, the claimant never told the Operations Manager about the field service application he developed. 
34. The employer discharged the claimant on July 7, 2025, because the claimant formed a competing business that provided the same services as the employer’s business and the employer lost trust in the claimant. 
35. The claimant performed the inspection for Customer A on July 22, 2025, for his own business. (Exhibit #5) 
36. The claimant issued an inspection report for the inspection performed on July 22, 2025. (Exhibit #5) 
37. The Operations Manager contacted Customer A and asked why they no longer used the employer for their fire pump controller services. Customer A told the Operations Manager that they hired the claimant. Customer A told the Operations Manager that they no longer used the employer for their fire pump controller needs because the claimant’s business charged less.

Credibility Assessment:

In the hearing, the claimant testified that he created the business website specifically to test a new field service application. The claimant testified in the hearing that the website was a “PWA” or a progressive web application that he created to test his field service application. The claimant testified in the hearing that the field service application needed a web server in order to operate the application. The claimant testified in the hearing that his intent was not to compete with the employer but to work with the employer with the new field service application he developed. The claimant testified in the hearing that he did not mention the field service application on the website because he did not want anyone to steal or copy his idea. The claimant’s testimony regarding his intention in creating the website and the purpose of the website is undermined by the actual website. The website was active and public as of June 20, 2025, while the claimant was still employed by the employer. The website had its own telephone number and contact form as of June 20, 2025. Again, this was while the claimant was still employed by the employer. The website set forth the same services as the employer’s business. The website set forth the claimant’s personal expertise in the field based on his years of experience as a fire pump controller specialist with the employer. The website displayed pictures of the claimant and the Office Manager. The claimant’s testimony is further undermined by his answers to questionnaires from the DUA. In the Employment History Questionnaire, the claimant was asked by the DUA, “Describe the incident that caused you to be discharged.” The claimant responded, “Due to being overworked and underpaid, I took steps to advocate for fair compensation in my field. As part of that effort, I created a website showcasing my professional skills and industry knowledge. My intention was to highlight the value of my work and encourage a fair wage discussion. Unfortunately, instead of addressing my concerns, my employer chose to terminate my employment on July 7, 2025.” (Exhibit #1). Nowhere in the claimant’s answers to questions from the DUA did the claimant set forth that he created the website to test a new field service application. Instead, the claimant’s answer reveals that he was disgruntled and felt undervalued by the employer. The claimant’s answer reveals that he formed the business to compete and push for higher wages from the employer.

The claimant testified in the hearing that he did not create or distribute business cards until after he was terminated from his employment. This testimony is found not credible because it is undermined by the actual website. The business website was active and public as of June 20, 2025. The website on its face indicates that the business was active and soliciting work. The website had a phone number and had a contact form to connect with customers. This contradicts the claimant’s assertions that he was not seeking business prior to the termination and undermines his assertions that he did not distribute his business cards to the employer’s customers.

The employer’s President testified in the hearing that the claimant’s website was similar to the employer’s website. The President credibly testified that the claimant’s website just reworded the key features from the employer’s website. The claimant admitted in his answers to questions from the DUA that his new business offered the same services as the employer. (Exhibit #3). Additionally, in the hearing, the claimant conceded that the website set forth the same services as the employer’s business. The claimant even used the employer’s name in his website. This bolsters the President’s testimony that the website created by the claimant used language from the employer. Additionally, the President testified in the hearing to being hurt and surprised that the claimant created the website. The President’s testimony in this regard was credible based on its tone.

The Operations Manager credibly testified in the hearing that Customer A hired the claimant’s business because they undercut the employer’s price. The claimant testified in the hearing that he did not receive payment from Customer A for his services. The claimant’s testimony in this regard is found not credible. The claimant’s testimony is undermined by the fact that Customer A no longer uses the employer for its fire pump controller services and specifically stated that the claimant charged less. Customer A did not assert that the claimant provided services for free. Also, the claimant’s overall testimony is undermined by the actual business website. The claimant’s answer to questions from the DUA reveal that the claimant felt underpaid by the employer and was seeking fair compensation. This evidence undermines the claimant’s overall testimony that he received no payment for his services.

Ruling of the Board

In accordance with our statutory obligation, we review the record and the decision made by the review examiner to determine: (1) whether the consolidated findings are supported by substantial and credible evidence; and (2) whether the review examiner’s conclusion is free from error of law. Upon such review, the Board adopts the review examiner’s consolidated findings of fact and deems them to be supported by substantial and credible evidence. We further believe that the review examiner’s credibility assessment is reasonable in relation to the evidence presented. However, as discussed more fully below, we reject the review examiner’s legal conclusion that the claimant is ineligible for benefits. 

Because the claimant was terminated from his employment, his qualification for benefits is governed by G.L. c. 151A, § 25(e)(2), which provides, in pertinent part, as follows:  

[No waiting period shall be allowed and no benefits shall be paid to an individual under this chapter for] . . . the period of unemployment next ensuing . . . after the individual has left work . . . (2) by discharge shown to the satisfaction of the commissioner by substantial and credible evidence to be attributable to deliberate misconduct in wilful disregard of the employing unit’s interest, or to a knowing violation of a reasonable and uniformly enforced rule or policy of the employer, provided that such violation is not shown to be as a result of the employee’s incompetence. . . . 

“[T]he grounds for disqualification in § 25(e)(2) are considered to be exceptions or defenses to an eligible employee’s right to benefits, and the burdens of production and persuasion rest with the employer.” Still v. Comm’r of Department of Employment and Training, 423 Mass. 805, 809 (1996) (citations omitted). 

The issue before us is not whether the employer was justified in terminating the claimant’s employment, but whether he is eligible for unemployment benefits. The purpose of the unemployment statute is to provide temporary relief to “persons who are out of work . . . through no fault of their own.” Cusack v. Dir. of Division of Employment Security, 376 Mass. 96, 98 (1978) (citations omitted).  

On the record before us, the employer has not met its burden to establish that the claimant knowingly violated a reasonable and uniformly enforced policy or rule. It has not presented any policy or rule pertaining to the prohibition against employees forming a competing business for us to review. See Consolidated Findings 5–6. In addition, the employer has provided no evidence that it has discharged other employees for engaging in similar conduct for which the claimant was discharged. Accordingly, our inquiry focuses on whether the claimant engaged in deliberate misconduct in wilful disregard of the employer’s interest within the meaning of G.L. c. 151A, § 25(e)(2). 

The employer discharged the claimant because he formed a competing business that provided the same services as the employer’s business, and the employer lost trust in the claimant. See Consolidated Findings 32 and 34. While still employed by the employer, the claimant created a website for his own service business for fire pump controllers using his own personal computer on his personal time. See Consolidated Findings 8, and 11–12. This website was public and active as of June 20, 2025, set forth the same services that the employer’s business provides, and used similar language and terminology as the employer’s website. See Consolidated Findings 9–10, 13–18, and 20–21. He also developed a field service application for his business. See Consolidated Finding 22. The employer had a similar field application. See Consolidated Finding 23. The claimant never told the employer that he created a website and started his own fire pump controller business. See Consolidated Finding 25. On July 7, 2025, the employer’s secretary and operations manager saw the claimant’s Facebook page, where he set forth his new fire pump controller business. See Consolidated Findings 29–31. 

These facts establish that the claimant engaged in the conduct of creating a competing business for which he was fired. Inasmuch as there is no evidence to suggest that the claimant acted inadvertently, we can reasonably infer that his actions were deliberate.

In order to determine whether an employee’s actions were in wilful disregard of the employer’s interest, the proper factual inquiry is to ascertain the employee’s state of mind at the time of the behavior. Grise v. Dir. of Division of Employment Security, 393 Mass. 271, 275 (1984). In order to evaluate the claimant’s state of mind, we must “take into account the worker’s knowledge of the employer’s expectation, the reasonableness of that expectation and the presence of any mitigating factors.” Garfield v. Dir. of Division of Employment Security, 377 Mass. 94, 97 (1979) (citation omitted).

We remanded this case to the review examiner to obtain subsidiary findings concerning whether the employer maintained any specific rule, policy, or expectation about the formation of a competing business as well as the claimant’s awareness of that expectation. The consolidated findings show that the employer did not have a specific rule, policy, or expectation that addressed the formation of a competing business, and it did not communicate any such expectation to the claimant during his employment. See Consolidated Findings 5–6. Nor did the claimant ever sign a non-compete agreement with the employer. Consolidated Finding 7. 

The Supreme Judicial Court has made clear that a claimant may not be disqualified from receiving benefits when the worker had no knowledge of the employer’s expectation. Garfield v. Dir. of Division of Employment Security, 377 Mass. 94, 97 (1979). Because none of the review examiner’s findings indicate that the employer ever informed the claimant of an expectation to refrain from forming a competing business, it has not shown that the claimant acted in wilful disregard of the employer’s interest. See Board of Review Decision 0018 9688 49 (June 30, 2017) (Board held claimant who started competing business with employer did not engage in disqualifying misconduct, where relevant employment contract was a non-solicitation provision, not a non-compete agreement). Compare Board of Review Decision 0021 7951 15 (Dec. 19, 2017) (Board denied benefits to claimant who was fired for starting competing hair business, because he was shown employer’s non-compete policy and knew employer did not allow employees to open a hair salon that would compete with employer’s business).

We, therefore, conclude as a matter of law that the employer has failed to show that the claimant’s discharge was attributable to deliberate misconduct in wilful disregard of the employer’s interest or to a knowing violation of an employment rule or policy, within the meaning of G.L. c. 151A, § 25(e)(2).

The review examiner’s decision is reversed. The claimant is entitled to receive benefits for the week beginning July 13, 2025, and for subsequent weeks if otherwise eligible.

Boston, Massachusetts                                              Date of Decision – April 3, 2026

Charlene A Stawicki, Esquire
Member

Michael J. Albano
Member

Any further appeal would further appeal further appeal would be to a Massachusetts State District Court.
(See Section 42, Chapter 151A, General Laws, Enclosed)

The last day to appeal this decision to a Massachusetts District Court is thirty days from the mail date on the first page of this decision. If that thirtieth day falls on a Saturday, Sunday, or legal holiday, the last day to appeal this decision is the business day next following the thirtieth day.

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