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.       

Baltimore Business Journal Article on Non-compete Agreements (Subscription Required)

The Baltimore Business Journal recently published a pro-non-compete piece directed at small businesses.  No surprise there:  the BBJ is a business oriented publication.  The reporter, Jack Lambert, called me for the employee perspective on non-competes.  Here is the part of the interview that made it into the article:

When drafting non-compete contracts, employers should consider how great of a burden to put on their employees, said Jim Rubin, a principal of the Rubin Employment law Firm in Rockville. He said some businesses include jury waivers. Those are clauses that dictate where the case can be litigated. They also include requirements that employees pay the company's legal fees if they lose the case."All sorts of provisions are put in there that are really unfair," said Rubin, who represents employees in non-compete contract matters.

I wrote about unfair non-compete contract provisions in my last post.

Arbitration of Employment Disputes in Maryland

I am pursuing more and more employment law cases in arbitration right now than I ever have in my career.  Arbitration is an alternative to Court.  In arbitration, the parties "choose" to have their disputes heard by an arbitrator (often a retired Judge or an experienced lawyer), rather than a judge or jury.

I am certain that my personal experience of an uptick in arbitration is common among employment lawyers.  Several Maryland and U.S. Supreme Court decisions allow employers to make their employees "agree" to waive their right to a jury and to pursue class actions as a condition of employment.  Employers generally prefer arbitration because of a belief that it is private, cheaper, and more employer-friendly than the court system.

In my experience, arbitration is  more expensive than court for the employer because the employer often must pay the costs associated with arbitration.   Hence, the employer has to pay its own lawyer and the arbitrator's fee.  Also, arbitration is  not always private.  Also, I have had some good success in arbitration.   Finally, when the employee is the one being sued, employers either forget about an arbitration or regret having made the employee sign an arbitration agreement as a condition of employment.  


  

Legal Jujutsu: Compelling Arbitration When Sued For Alleged Breach of a Non-Compete

I have mentioned forced arbitration often on this blog.  That is, when an employer requires its employees to sign an arbitration clause and waive their right to a jury trial as a condition of employment. 

But, what happens when at the end of the relationship, it is the employer that sues the employee in Court for a non-compete violation?  With a bit of legal jujutsu, I have had some success getting the matter dismissed from Court based on a motion to compel and to dismiss using the employer-drafted forced arbitration clause.  Dismissal may or may not be the end of the story as the employer may still pursue the matter in arbitration.

Ticket Office Employees v. Washington Redskins

Redskins Workers Fight For Their Right to Rights

Click here for a brief write up of the ticket workers' case against the Redskins.  It is focused on the fact that the Redskins required my clients to sign arbitration clauses as a condition of employment.  I have written about such clauses several times on this blog. 

Even Written Employment Contracts Can be At Will

Maryland is an "at will employment" state. With limited exception, an employer or an employee can terminate the relationship without notice for any reason. One familiar exception is that an employer cannot terminate an employee because of his or her protected status, i.e., because of his or her race, color, religion, gender, age, disability status, etc. Another familiar exception is if the parties have entered into a written agreement altering the at will relationship. The parties usually do this by agreeing in writing to an employment term (i.e., a year) and limiting the employer right to terminate to very specific reasons (often referred to in shorthand as limiting the right to terminate only "for cause").

But, what if the employees and the employer enter a written agreement without specifying an employment term. United States District Judge Blake ruled in this case that the absence of a term means that the relationship is "at will." How does this affect you? If you are an employee and are going through the trouble of negotiating an employment agreement make sure it has a term (and make sure you have an employment attorney review that agreement).

Two sidenotes:

• I wrote here that under Maryland law a written at will employment agreement can contain a arbitration provision (waiving the employee's right to a jury trial).

• Under Maryland law a written at will employment agreement can contain a non-compete provision (limiting the employee's ability to earn a living after the relationship ends).

Two more reasons to get expert advice when asked to sign an employment agreement.

Year in Review: 5 Top Maryland Employment Law Issues from 2006

5. Employers can require at-will employees to waive their right to a jury trial through mandatory arbitration provisions in job applications. At the same time many Maryland employment lawyers realize that arbitration is just as expensive, unwieldy and unpredictable as litigation.

4. After the skirmish over Governor Ehrlich's political appointments, the citizens of Maryland elect a new governor. Will the General Assembly investigate soon-to-be Governor O'Malley's appointments?

3. The Maryland Federal District Court strikes down the Wal-Mart bill. The case is now pending at the Fourth Circuit Court of Appeals.

2. The Supreme Court's Burlington Northern decision expands employee rights to challenge workplace retaliation. At the same time, the Fourth Circuit greatly restricts such rights in Jordan v. Alternative Resources Corp. Will the Supreme Court review the Jordan case in 2007?

1. The Maryland Wage Payment and Collection Law really means that it says. Employer must pay employees earned wages, whether they be accrued vacation, bonuses, or commissions.

NLRB issues opinion invalidating broad arbitration clause

The NLRB issued a decisionthat may have an effect on Maryland employees facing mandatory arbitration clauses (discussed here).

The policy at issue states that it:

. . . applies to all . . . employees. . . and covers all disputes relating to or arising out of an employee’s employment . . . or the termination of that employment.

The Board invalidated the provision because it tended "to inhibit employees from filing charges with the Board." Employees facing a similarly broad clause now have an arrow in their quiver: filing an unfair labor practice charge with the NLRB.

Mandatory Arbitration Agreement Enforced Against Maryland Employee At Will

In Holloman v. Circuit City Stores (March 13, 2006), the Maryland Court of Appeals enforced a mandatory arbitration agreement against an employee who attempted to pursue her discrimination claim in court. The agreement:

• was a condition of applying for a job with Circuit City;
• could be amended only by Circuit City once per year provided the company gave 30 days notice of its intention to alter the agreement's terms;
• applied to "any and all claims;"
• did not confer any rights to the applicant or employee -- if hired, he or she remained an "at will" employee.

The five judge majority opinion held that the arbitration agreement was enforceable and thus prohibited the employee from pursuing her claims in court. (She was required to pursue them through arbitration). Writing for the majority, Judge Battaglia found "Circuit City's promise to arbitrate . . . constitutes consideration. . . " Chief Judge Bell (joined by Judge Greene) stated that the agreement was a contract of adhesion and was unconscionable because of the extraordinary difference in bargaining power between the parties.

The lesson in Holloman is that Maryland employers can require that their employees consent to arbitration as a condition of employment. Such agreements require carefully drafting and should be reviewed by counsel.