Monday, December 03, 2012

What to do when you are threatened with a non-compete lawsuit.

I recently had two successful outcomes in a non-compete cases on behalf of employees either being sued or threatened with being sued. It got me to thinking what are the ways my clients should prepare for the first meeting with a lawyer in these circumstances. Here are my thoughts:

1. If you are served with legal papers call a lawyer immediately. Employers often ask the Court to grant immediate emergency relief in these cases. Time is of the essence. Bring the Court papers with you. Record the date you are served.  Bring the cease and desist letter if you received one.

2. Bring a copy of the non-compete agreement to your first meeting with a lawyer.

3. Bring copies of your job descriptions at your old job and your new job or be prepared to describe your job duties in detail. An employee's best defense is often that he or she is not the type of employee who can be covered by a non-compete agreement.

4. Did you advise your new employer in writing that you signed a non-compete with your previous employer? If yes, bring a copy of the document that proves this fact. If no, consult a lawyer.

5. Gather other relevant documents presented in an organized fashion, including:
  • Evidence of affirmative claims you have against your former employer. Are you owed wages? Were you mistreated? Employees often can use their own claims to leverage their ways out of a non-compete agreement;
  • Documents you believe your old employer might claim as evidence of your breach.
  • Contact information for your new employer and any potential witnesses.

Maryland Employees: Do Not Lose Earned Wages When You Change Jobs

I have written many times about the Maryland Wage Payment and Collection Law, the basic law that protects employee wages.  The Law states that employees are entitled to the wages that they earned. If an employer fails to pay earned wages, it could be liable for triple damages and attorney's fees.

Below are examples of earned wages that can be recovered in Wage Payment and Collection Law cases.

Commissions. A series of favorable Maryland decisions (reviewed here) state that if an employee performs the work necessary to earn a commission, he is entitled to it -- even if he or she has left the company

Bonuses. Did you do everything you could possibly do to earn the bonus? If so, you probably earned it and are owed it.

Severance. If severance is promised to entice an employee to take a job or to reward an employee for years of service, it likely falls under the category of earned wages.

Straight wages.  Did your employer just fail to pay?  You are owed your wages.

Overtime:  A recent amendment  includes overtime in the Law's definition of wages.

The Law can be enforced in three ways:

1.  You can file a lawsuit.  I recommend you consult a Maryland Employment attorney before doing so.

2.  You can file an administrative complaint with the Maryland Department of Labor (DLLR).  Instructions on how to file such a complaint can be found on the DLLR website.  

3. You can file a criminal complaint for a willful violation.  A warning:  I have not yet seen a criminal wage violation prosecuted.   My impression is that such claims are rarely prosecuted (since they are left to the civil process).

NOTE: Beginning in October 2013, Maryland employees can place a lien on their employer's property under the   Maryland Wage Lien Act.

Wednesday, November 28, 2012

Promise in Employee Handbook Not Enforceable, Fourth Circuit Overturns Jury Verdict

  Make clean with hand; then make dirty with the other.

  That is what a lot of employers do in employee handbooks.  They publish employee-favorable policies, but then pepper the handbook with disclaimers that state that their policies are not contractual and cannot be enforced in Court.

A Maryland employee sued her employer claiming its anti-retaliation policy rose to the level of a contract.   The policy stated:

Retaliation and threats of retaliation against employees who raise concerns, or against individuals who appropriately bring important workplace and business issues to the attention of management, are serious violations of [the Company's] values and standards and will not be tolerated. . . . All directors, officers and employees are strictly prohibited from engaging in retaliation or retribution . . . which is directed against an individual on the basis of or in reaction to that individual making a good faith report to the Company . . . of suspected violations of law, regulation, policy or procedures, or Our Values and Standards.

The employee claimed her supervisor fired her for reporting the supervisor's violations of the company's published ethical rules.  

She won a $555,000 jury verdict in the Maryland Federal District Court.

The Company, of course, appealed.

On appeal, the Fourth Circuit reversed and directed the trial court to enter judgment in the Company's favor.  The Appellate Court ruled that the disclaimers in the employee handbook rendered unenforceable the Company's anti-retaliation promise.

Tuesday, November 27, 2012

Individual Owners of Corporations May Be Liable Under the Maryland Wage Payment and Collection Law

  The Maryland Wage Payment and Collection Law provides that employers must pay employees their earned wages on time.  An employer that violates the Law may be liable for triple damages and attorney's fees.   Lawyers have long debated whether a company's owners individually can be held responsible for failing to pay wages (in addition to holding the corporation responsible).  A recent decision holds that individuals can be liable if they control the employee's work.  Control can mean the power to hire and fire, set wages and schedules, and maintain records.  Hence, company-owners cannot hide behind a corporation when they control their employees but fail to pay them.  

Maryland's intermediate appellate court issued the decision.  I suspect there will be continued debate about the issue, which may end up before the Maryland Court of Appeals.    

Wednesday, October 24, 2012

Court Rules that Baltimore County's Pension System Discriminated Based on Age

 The U.S. District Court in Baltimore recently ruled that Baltimore County's pension system violated the Age Discrimination in Employment Act. The problem with the system is that it charged older employees more because in theory they would have less time to work before reaching retirement age. The pension system however was amended to add an early retirement option that was not based on age. Instead, it was based on years of service. The early retirement provision "decoupled" age from contributions making it likely that some older workers had to pay more for the same benefits that younger workers received.

The Baltimore Sun has posted a series of articles on the case. I am quoted in one article predicting that the next phase of the case will likely be a battle over damages calculations (sorry for the horn toot):

James E. Rubin, of the Rubin Employment Law Firm in Rockville, said it is "impossible to tell right now" how much the case could cost the county in damages. Typically, both sides hire their own economic analysts to calculate what people are owed.

"There will probably be dueling calculations on what the damages are," Rubin said.

Baltimore County has vowed to fight until there is no one left to fight. If the ruling is upheld, the County predicts. " County employees would have to repay millions of dollars in pension funding. Their paychecks would be decreased as a result of this decision."

Thursday, October 11, 2012

Q: How many times has the Montgomery County Domestic Worker Law been enforced?

A:  Once

Since 2008, Montgomery County, Maryland, has a Domestic Worker Law.  The Law requires that a family who employs a domestic worker have a written employment contract with that worker.  The Law is enforced by the Office of Consumer Protection.  The Office may seek a civil penalty of not more than $1,000.00 for each violation, and additional damages, restitution, or any other available legal or equitable relief.

A recent Washington Post article noted that the Office has only sought to enforce the law once.  According to the article:

Take the law passed in 2008 requiring residents to offer domestic workers a written contract. At the time, Council member Roger Berliner (D-Potomac-Bethesda) said he was worried about “whether we would be deemed to be the nanny government of all time.” 
Still, the bill passed unanimously. 
Since then, it’s been enforced once.

Maryland Unemployment Overpayments

    Maryland recently issued an audit of its unemployment system.  The audit found that the Department of Unemployment Insurance (Department) was likely overpaying unemployment benefits to individuals who were actually working.  The Department cross-checks its list of benefit recipients with a nationwide list of new hires (by looking for matching social security numbers).  The audit checked the cross checking done in the third quarter of 2010 and found that the Department only pursued 43 of 71 individuals who cam up as a match.  The Department had not pursued the other 28 matched who received $167,200 in benefits.

    Other audit highlights:

  • The Department was also not doing a great job cross-checking its list of benefit recipients with death records, incarceration records, and records of current State employees.
  •  A Department programming error allowed employers to receive improperly a certification for a tax credit.
  • The Department had allowed improper access to critical data files.
The Department accepted all or nearly all of the audit's findings, stating that it has addressed or was in the process of addressing the identified issues.  

Thursday, August 09, 2012

Harassed at Work in Maryland? Here are a few things to consider.

Not all harassment is legally actionable.  "Harassment" in the common sense of the work can range from perceived slights to outright physical abuse.  While you may being treated unfairly, there may no legal avenues for relief.  It is in the nature of the word "harassment" that it can describe varying levels of conduct.

But some workplace harassment is actionable.  You should contact an attorney for help when you believe you are being subject to any sort of conduct that approaches anywhere near the level of actionable harassment.  

Harassment based on a protected category, like age, race, gender, etc., may be actionable.  The EEOC defines such actionable harassment as: 

Unwelcome conduct that is based on race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. Harassment becomes unlawful where 1) enduring the offensive conduct becomes a condition of continued employment, or 2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive."

Certain severe harassment may also make you eligible for an immediate peace or protective order from the District Court of Maryland or a Commissioner.

If you are facing harassment (even the non-actionable type), should you quit?  I have previously discussed this exact question.   Your decision has legal implications (as an example, quitting could have an affect on your eligibility for unemployment benefits).  Your decision has life implications. You should consult the people you trust (an possibly consult counsel).  The answer is that there is no easy answer.  

Friday, August 03, 2012

EEOC Wins Maryland Jury Verdict of $350,000 for Sexual Harassment and Retaliation Victims

In Baltimore, the EEOC won a recent jury trial on behalf of three employee accusing their bosses of sexual harassment and retaliation.    Lind Luz was the lead plaintiff.  She was the receptionist in a physician's office.   After Ms. Luz repeatedly rejected the advances of the physician CEO  and the CFO, the practice began retaliating against her by issuing to her unwarranted  discipline and rescinding approved leave, which eventually culminated in her  retaliatory termination.   The CEO and CFO sexually harassed two other employees, a nurse and a study coordinator.  The jury  returned a verdict finding  that three women were entitled to compensatory damages in amounts ranging  from $4,000 to $10,000, and awarded each claimant punitive damages in the amount of $110,000.

You, Too, Can Apply to be the Secretary of Labor for the State of Maryland

I happened to come across the job announcement for the position of "Secretary - Department of Labor, Licensing & Regulation. [DLLR]"   Essential job function number 1 is:  "Ensures effective enforcement of workplace safety and wage laws to provide critical safeguards to Maryland workers and communities."  The DLLR has a broad mission.  So in addition to enforcing our State's wage laws, the candidate must also be prepared to provide "executive direction for the Maryland Racing Commission and the Governor’s Workforce Investment Board."  

Wednesday, May 09, 2012

What amount of unemployment tax does a Maryland Employer pay for each employee in a year?

$187-$1,147 (in 2012).  The range is because an employer's tax rate is based on its claims history over a period of three years.   The lowest rate is 2.2%; the highest rate is 13.5%.   Employers are only taxed on each employees first $8,500 in wages.   Overall rates are likely to be lowered in 2013.   Even at the very highest end, the total tax per week is under $25.

I have represented employees at several recent unemployment hearings.   It always surprises me how personally some employers take claims for uninsurance benefits.  Most such claims have little affect on the  employer's experience rating and its bottom line.

Friday, May 04, 2012

How Much Does an Entry-Level Maryland Wage and Hour Investigator Make?

$28,434 - $44,520.

There are three ways to enforce the Maryland Wage Payment and Collection Law, the Law that allows Maryland employees to recover earned but unpaid wages.  The three ways are:

  1. By filing a civil lawsuit; 
  2. By filing a criminal complaint for a willful violation (I have never seen this done successfully); and
  3. By filing a claim with the Maryland Department of Labor (the "DLLR").  The DLLR may assign an investigator to investigate your claim.  As mentioned, the DLLR currently is hiring an investigator and is offering a salary of  $28,434 to $44,520.  

Monday, April 30, 2012

Pending Law Will Ban Employer Facebook Password Queries

My take on the pending Maryland Law  (waiting for the Governor's signature) banning employer requests for social media passwords:
“Fishing expeditions into an employee’s private life are both bad form and an invitation for discrimination and breach of privacy claims,” Rubin says. “The real question to me, regardless of liability, is do you want to work for an employer who wants to snoop through your private information and does not trust you simply to provide it yourself?”

(I apologize for the obvious horn toot and the bad picture).

Thursday, April 26, 2012

Q: What amount of fines has Maryland collected under the Workplace Fraud Act of 2009?

A:  Zero.

  I have written about the Maryland Workplace Fraud Act of 2009 in the past.  The law was subject to intense disagreement between the Maryland Department of Labor and the Maryland Chamber of Commerce.  The Law  grants to the Maryland Department of Labor the authority to investigate the misclassification of employees as independent contractors in the construction and landscaping industries. The Act allows an employer who misclassifies an employee but does not do so knowingly to come into compliance within 45 days without penalty. Employers who "knowingly" misclassify employees, however, may be subject to a penalty of up to $5,000 per misclassified employee. 

A recent fiscal note to an amendment to the Act states the following about its enforcement:

As of December 2011, DLLR’s Task Force on Workplace Fraud had conducted  660 investigations under the Workplace Fraud Act, and issued 12 citations, which  translates into a 98% compliance rate.  The task force collected $33,000 in civil fines  from employers for failing to provide employment records in a timely fashion, but it has  not assessed fines for misclassification because the cited employers have either come into compliance or have their cases still pending.

New Maryland Law Protects Unemployment Benefits for Victims of Domestic Violence

The Maryland General Assembly passed a law, effective October 1, 2012, that will protect victims of domestic violence.   The law states that an individual is eligible for unemployment benefits if it is determined that the individual voluntarily left employment because he or she or his or her spouse, child, or parent was a victim of domestic violence. The individual must (1) reasonably believe that the individual's continued employment would jeopardize the safety of the individual or the individual's family; and (2) provide documentation substantiating the domestic violence.   The law's fiscal note give a no nonsense explanation of the sources of funds for unemployment benefits.  

Wednesday, February 22, 2012

Attorney Disbarred for Conduct Related to Her Handling of Employment Law Claim

As follow up on my last post on hiring an employment lawyer, here is a decision disbarring a Maryland attorney in part related to her handling of an employment law case.  While this attorney may (or may not) have been adept at bankruptcy law, it appears she was not so skilled when it came to employment law.