Thursday, June 13, 2019

New Maryland Law Broadens Protections Against Workplace Harrassment

A new law, that takes effect October 1, 2019, expands the protections Marylanders have against workplace harassment.  The new law:

  • Allows independent contractors to claim workplace harassment.
  • Extends the time for individuals to file administrative claims for workplace harassment to two years (up from 180 days).  
  • Expands the scope of our State's anti-discrimination law to employers with one or more employees (down from 15 employees).    
  • Clarifies that harassment based on the following is prohibited: race, color, religion, ancestry or national origin, sex, age, marital status, sexual orientation, gender identity, or disability.
Facing workplace harassment?  Consult a Maryland Employment attorney.

Thursday, May 23, 2019

Law Limiting Non-Compete Agreements in Maryland to Take Effect October 1, 2019

The Maryland General Assembly passed a law rendering unenforceable non-compete agreement as applied to certain lower wage employees.  The law renders void non-compete agreements that attempt to restrict competition by employees earning equal to or less than $15.00 per hour or $31,200 annually.    The new law, for the most part, codifies the existing state of affairs in Maryland under decision law.  That law makes clear that only a narrow class of employees may lawfully be covered by such an agreement. 

Monday, January 28, 2019

Varying Independent Contractor Tests Apply to Maryland Employees

Employees in Maryland enjoy our broad array of worker protection statutes.  Employees may qualify for sick leave and parental leave.  They can sue for overtime and lost wages (and may be eligible for triple damages).  They may be eligible for unemployment.  Employers, of course, are required to withhold income and payroll taxes for their employees.

Independent contractors get bupkis (nothing).  They likely have to pay self-employment tax.

This disparity in rights creates an incentive for employer to push individuals toward being classified as independent contractors. 

But, could you be an employee for one purpose and an independent contractor for another?   The answer is, "yes."  That is because there are different independent contractor tests for different statutes.

The broadest test is called the "ABC" test because all three prongs of the test must be met.  It applies to claims for unemployment and the Maryland Workplace Fraud Act (which only applies in the construction and landscaping industries).  To be an independent contractor under this test the employee must be:
  • free from control and direction;
  • performing work in his or own business or occupation; and
  • either (i) performing work that is different than the business of the person for whom the work is performed; or (ii) performing the work in a different location than the person for whom the work is performed.

A narrower "economic realities" test applies to most other Maryland statutes.  This flexible approach focuses on whether the worker is economically dependent on the business to which he renders.  It looks at 

  • the degree of control that the employer has over the manner in which the work is performed;
  • the worker's opportunities for profit or loss dependent on his managerial skill;
  • the worker's investment in equipment or material, or his employment of other workers;
  • the degree of skill required for the work;
  • the permanence of the working relationship; and
  • the degree to which the services rendered are an integral part of the putative employer's business.
Though similar to the economic realities test, the IRS and the NLRB have their own tests as well.  What should one do to navigate this forest of varying and multi-factored tests?  Of course, my advice on this is to seek some professional advice.  You might be surprised that you qualify as an employee for one purpose but not another.


Friday, January 18, 2019

New Maryland Law Makes General Contractors Liable for Unpaid Wages Owed by Sub-Contractors

As of October 1, 2018, under a new law, general contractors in the construction industry are liable for wage theft by their sub-contractors.  General contractors are liable regardless of whether they control the sub-contractor's employees.   This new law broadens the possible defendants in a claim under the Wage Payment and Collection Law.  An employee in the construction industry may file for a lien, and may sue his direct employer, the individual owner of the company he or she works for, and - now - the general contractor.  The Law allows for triple damages and attorney's fees if the employee can prove that wages were withheld in bad faith.   

Tuesday, January 15, 2019

Maryland's “Disclosing Sexual Harassment in the Workplace Act of 2018"

Maryland has a new law effective October 1, 2018, called the Disclosing Sexual Harassment in the Workplace Act.  One of the Act's main provisions says this:
Except as prohibited by federal law, a provision in an employment contract, policy, or agreement that waives any substantive or procedural right or remedy to a claim that accrues in the future of sexual harassment or retaliation for reporting or asserting a right or remedy based on sexual harassment is null and void as being against the public policy of the State.
What does this mean?  Some employers require that employees sign employments agreements that limit the employees' ability to pursue their legal claims.  One example is a provision waiving an employee's right to a trial by jury in any future claim against his or her employer.  Such a provision "waives" a "procedural right" for "asserting" a claims "based on sexual harassment.   Under this new law, the provision is void. 

Employment agreements and employee handbooks attempt to limit employment claims in all kinds of different ways, including ways that may appear neutral on their face.  For example, a provision in an agreement might select a different State's law to apply to employment-based claims. Such a choice-of-law provision could well be viewed as waiving a Maryland claim (as is the case for claims under the Maryland Wage Payment and Collection Law).

One issue that will likely arise soon is whether a mandatory arbitration clause is void under this new law.  Such clauses are generally governed by the Federal Arbitration Act.  The meaning of the new law's introductory phrase, "except as prohibited by federal," could be put to the test.  A Court would have to determine whether Federal law prevails and preempts the effect of the new Maryland law.       

Monday, January 14, 2019

Costs To Defend Against Alleged Non-Compete Violations Often Drive Employee Decisions (Even if the Agreement is Likely Unenforceable)

I have reviewed many, many non-compete agreements over the course of my career.  A very large portion of them are likely unenforceable under existing Maryland law.  The agreements are overbroad, do not protect a legitimate business interest, purport to apply to an employee who cannot be covered, or contain terms that are presumptively unlawful.   Employers often demand that low-wage employees sign obviously unenforceable non-compete agreements as a condition of employment.  For example, the sandwich shop, Jimmy John's, required that many of its sandwich makers sign non-compete agreements (until it recently stopped this practice). 

The costs to an employer of requiring non-compete agreements is nominal.  The agreement becomes just another form to be signed.  Many employees do not dwell on these forms -- often because they need the job.  

But the costs to the employee can be great when he or she seeks to change jobs.  The mere threat of lawsuit will often drive the employee to comply (and decline the job offer that he or she otherwise would have accepted).  That is because the costs of defending one of these agreement can be expensive.   

An employee faced with threatened enforcement of non-compete should contact a lawyer.  There are ways to leverage your way out of such agreements.    

Legislators have attempted to address this issue over the years.  Already in the Legislative Session, Al Carr, introduced HB38 (link to fiscal note).  It would render void non-compete agreements signed by employees making $15 per hour or less per hour or $31,200 or less per year.  

If you are facing threatened enforcement of a non-compete agreement, you should review this post and reach out to an attorney.  

Thursday, January 10, 2019

Hiring An Employment Attorney

   If you are searching for an employment attorney, you most likely have come across lawyer marketing material. These materials include pay-per-click ads, videos, testimonials, and websites.  The message of these ads usually is some variation of: sue your former employer using  our law firm because it is the most aggressive, knowledgeable, and experienced in the area.

  But this message is at odds with the advice most good employment lawyers give their potential clients facing litigation:  there are risks and uncertainty ahead; the legitimate grounds for employment law claims are narrow; the law is complex; and the system is, at times, unpredictable. Even when a client has a good claim, he or she will fighting an employer that likely has greater resources than the client.  

  A potential client should look beyond the lawyer marketing messages. He or she should seek out the best possible lawyer for the situation.  A potential client should do the research.  In outline form below, I set forth some tangible and intangible ways a potential client can do just that.   
  • Tangibles
    • Is the lawyer licensed?  In Maryland check here.   
    • Has the lawyer been disciplined?  In Maryland check here.  
    • How long has the lawyer been practicing?    
    • Have clients posted public reviews?      Avvo is a good place to look for answers.
    • How many cases has the lawyer filed and has he or she taken any to verdict and judgment?  Though the records can be difficult to decipher, Maryland State Court Case docket information and Federal Court case information (registration and fees required) are available.
    • Does the lawyer really focus his or her practice on employment law?
  • Intangibles
    • Meet with the potential lawyer in person if possible. 
    • Is the lawyer (not just the staff) easy to reach by phone and electronic mail?
    • Does the lawyer appear worthy of your trust?
    • Is the lawyer willing to give you examples of his or her past experience?
    • Is the lawyer willing to give you an estimate of the costs going forward?
    • Expect to pay for good representation. Seek out attorneys who are willing to take a flexible approach to billing arrangements.  
    • Written retainer agreements are a must.

Choice of Law Provision Likely Unenforceable If It Causes a Maryland Employee to Forfeit Earned Wages

Choice of Law provisions are common in employment contracts and pay plans.  They state that the parties choose that a certain state's law (i.e., New York, New Jersey) will apply should there ever be a dispute over the meaning of the contract or pay plan. 

Maryland has several employee-favorable worker protection statutes, including the Maryland Wage Payment and Collection Law ("MWPCL").  The MWPCL allows employees to collect earned commissions and allows for triple damages if wages are withheld in bad faith. 

One could see how an employer might want to avoid the MWPCL.  One way an employer could do that is through a Choice of Law provision.  The employer could say, "This pay plan will be interpreted in accordance with Laws of New York [or some other law.]"  For many years, Court in Maryland enforced these provisions.

But in a case called, Cunningham v. Feinberg, the Maryland Court of Appeals stated the Maryland Legislature signaled that the policy underlying the MWPCL was so important that it could not be waived through a choice of law provision.  A good example of the effect this has had is this decision in Blanch v. Chubb & Sons, in which a Judge reversed herself on the application of a Choice of Law Provision because of Cunningham.

Bottom line, if you work in Maryland, the MWPCL applies to you.