You May Be Entitled to Unemployment If You Quit With Good Cause for Health Reasons.

  Maryland's Unemployment law states that you are eligible benefits if you quit with "good cause."  Good cause is not fully defined but may be shown if the reason  you left work is "directly attributable to, arising from or connected with the conditions of the employment or the actions of the employer."

 Resigning because you suffer from a health problem resulting from an on-the-job injury may constitute good cause.  For example, in the attached decision (identifying information redacted), a Hearing Officer found my client quit with good cause for health reasons.  She suffered from a mold allergy.  When the office flooded, she began suffering symptoms. After being told the office would not be renovated for six months, she quit.  As stated, the Hearing Officer  found my client quit for justifiable reasons directly attributable to work.

You May Not Be Within the Class of Employees That Can Be Covered by a Non-Compete Agreement.

  Maryland Employers often require employees to sign non-compete agreements as a condition of employment.  But just because you signed a non-compete agreement does not mean that it is enforceable as to you.  Only a narrow class of employee may lawfully be covered by such an agreement. 

  The case, Ecology Services, Inc. v. Clym Environmental Services, LLC, illustrates the point.  There, the Maryland Court of Special Appeal refused to enforce a non-compete agreement applied to “Radioactive Waste Specialists” and “Radioactive Waste Technicians.”  The Employer bringing the action could not prove that the employees possessed (a) any truly unique skills or (b) exploited any specialized personal contact at their new job. Truly unique skills are those that would make it difficult to find a substitute employee with the same skills.  Specialized personal contacts are generally limited to proprietary sales opportunities.

  In sum, an employer can only enforce non-compete agreement against a narrow class of employees and only when it can state a legally protectable interest. 

   See this post and contact an attorney if you are threatened with enforcement of a non-compete in Maryland.

Triple Damages When The Employer Disputes Only Part of the Wages Claimed

I recently tried a small Maryland Wage Payment and Collection Law case in the District Court of Maryland.  The employer conceded that it owed some -- but not all -- of the wages we were seeking.  The Court did not award the disputed amount;  but tripled the undisputed amount. The Court relied on this passage from my trial brief on the issue: 

An employer may be liable for treble damages on only a portion of the amount claimed.  In Medex, for example, the Court noted that the employer’s withholding of one part of the employee’s claimed wages “might itself be evidence of a lack of good faith” Id at 43.  Likewise in, Baltimore Harbor Charters, Ltd. v. Ayd, 365 Md. 366, 397, 780 A.2d 303 (2001), the Court noted that the “bona fide dispute” provision of § 3-507.2 contains no language which would permit an employer to withhold amounts it concedes are owed to employee. According to the Court:  “where an employer alleges the existence of a bona fide dispute as to the total amount of wages owed to an employee . . . yet concedes that a certain amount of wages are due. . . the employer acts at his or her peril in failing to pay the conceded amount.”  Id. The penalty provision in § 3-507.2 thus applies to any portion of the amount claimed to be owed or paid late that is not subject to a good faith dispute.

The Court's award of triple damages is important.  It allows my client to seek to collect his attorney's fees from the employer that withheld his wages.

Contact Me

James Edward Rubin
The Rubin Employment Law Firm, P.C.
600 Jefferson Plaza, Suite 204
Rockville, Maryland 20852
Phone (301) 760-7914
jrubin@rubinemploymentlaw.com

Is Maryland's Labor Climate Improving? It Depends How You Spin It.

Maryland's Department of Labor recently pulled from its website a gloomy report on our State's labor climate (specifically job growth).  It subsequently issued a more rosy report.  Why?  The DLLR claims it was published prematurely.  Candidate for Governor, Bob Ehrlich, contends the DLLR fudged the numbers. 

Dirty Labor Laundry On-Line

Want to know if your employer is a serial labor law violator? Check The U.S. Department of Labor - Enforcement Data . There, you can search by to see if your employer has previously violated USDOL-enforced labor laws (like the Family and Medical Leave Act and the federal minimum wage and overtime law).

How to Apply for Maryland Unemployment Insurance

Many, many clients asks me about the nuts and bolts of filing an unemployment claim. This video published by the State of Maryland does a good job explaining the process.

Winning Attorney's Fees in Maryland Wage Payment and Collection Law Cases

On June 8, 2010, I won a $30,769.08 wage payment verdict on behalf of my client (which was 100% of the amount owed).  The jury was asked three essential questions:

1. Did the employer owe my client money and if so, how much?  (The answers were, "yes" and "$30,769.08").
2. Did the employer withhold the money in bad faith?  (The answer was, "yes").
3. Do you award the plaintiff additional damages up to three times the amount owed?  (The answer was "no").

Translation:  my client won what he was owed but was not awarded additional damages.

Because the jury found the employer withheld the money in bad faith I was permitted to seek my client's attorney's fees.   Had the jury answered "no" to the second question above, we would not have been permitted to seek my client's attorney's fees under a 2009 Maryland Court of Appeals case. 

In the end, the Court awarded my client an additional $36,212.35, 100% of the fees he incurred in obtaining the verdict.

Maryland Whistleblower Success Story

  The firm recently won a Section 1983 jury verdict in the Circuit Court for Montgomery County. The case was unusual in that the firm represented a volunteer firefighter seeking to be reinstated in a Volunteer Fire Department. The client exposed financial mismanagement and safety issues in the firehouse to a citizen who passed the information on to the Montgomery County Council. Up until the day of trial he would have accepted reinstatement as settlement with little or no money. (We unsuccessfully moved to enforce what we believed had been such a settlement shortly before trial). We proved at trial that the Department and Fire Chief terminated him for the disclosures. Although the jury awarded a modest amount in compensatory damages, it affirmatively found that the Department and Fire Chief terminated my client for protected speech. The verdict opened the door to reinstatement and attorney’s fees.

The Court did, in fact, later award my client significant post-trial relief, including: (1) reinstatement; (2) the award of six years of missed pension credits; (3) expungement of all negative information in my client’s personnel file related to his whistle-blowing activity; (4) an injunction against further retaliation and (5) $143,116.78 in attorney’s fees and costs (100% of the fees and costs the firm charged to the client).

Employees of Large Retail Employers Entitled to Breaks beginning in March 2011

Back in 2007, I wrote that adult Maryland Employees are not entitled to breaks.

As a result of a new Maryland law that takes effect in March 2011, certain Maryland employees must be given breaks.  The law only applies to retail establishmentswith 50 or more employees and excludes wholesalers and restaurants.

Triple Damages for Overtime Starting October 1, 2010.

Q:  What might you receive if your employer withholds overtime wages in bad faith?

A:  Triple damages and attorney's fees (starting October 1, 2010). 

The Maryland General Assembly clarified that the Maryland Wage Payment and Collection Law's definition of wages includes overtime.  As such, you might be able to collect three times the amount owed under the Maryland Wage Payment and Collection Law.

Wrongly classifying workers can land employers in hot water

Here is good article on the dangers of misclassifying employees as independent contractors.    Below is the main point (sorry for the horn toot):

Attorney James Rubin has been hearing a lot from underpaid and confused employees lately. Most of them work in construction or landscaping, but Rubin, principal of The Rubin Employment Law Firm PC in [Rockville], says he also is hearing from workers in fields like nursing and government contracting.



These workers have more in common than being confused and underpaid: They are all from Maryland, and many have been improperly classified as contractors when they should be considered employees by the companies that sign their paychecks.

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. 

License To Smoke Pot May Not Hold Much Weight In The Workforce

A local reporter interviewed me about how DC's new medicinal marijuana law may affect workplace rules. Not much is the answer:

"Once it affects your work performance, it's the employer's rule, just like with any other drug."

In other words, whether or not marijuana is legalized for medicinal purposes, if you come to work under the influence you can be fired (just like if you come to work under the influence of other legal substances, i.e., alcohol). Also, most states allow random drug testing and zero tolerance policies and possession of marijuana is still a federal offense. So, even if the use of marijuana does not affect your job performance, if your employer finds out you are using it, your employer can terminate you.

Sick With Flu? Workers Have Few Rights

I did an interview with WUSA 9 last night on employee rights when you get the flu. Here is a bit more detail on your rights if you are an immediate family member gets sick with the flu:

• FAMILY AND MEDICAL LEAVE ACT. If you and your employer are covered you have the right to up to 12 weeks of protected leave if your illness qualifies as a "serious health condition." A serious health condition is one the incapacitates you for more than three consecutive days and requires one treatment by a health care provider (i.e., an in-person visit within 7 days of the first day of incapacity) with a continuing regimen of treatment (e.g., prescription medication, physical therapy). You may also be entitled to protected leave is you caring for a spouse, son, daughter, or parent with a "serious health condition."

• MARYLAND FLEXIBLE LEAVE ACT If you and your employer are covered you have the right to use accrued sick or vacation leave for yourself if you are sick or to care for a child, spouse, and parent.

• DISTRICT OF COLUMBIA FAMILY AND MEDICAL LEAVE ACT. If you and your employer are covered you have the right to up to 16 weeks of protected leave if your illness qualifies as a "serious health condition."

The above laws provide protected leave, i.e., your employer cannot retaliate against you or fire you for taking protected leave. Whether you and your employer qualify under the above laws can be a tricky issue and varies by jurisidiction.

Ticket Office Employees Sue The Redskins for Unpaid Overtime: Granted Collective/Class Status.

Six former employees of the Washington Redskins are prosecuting an overtime arbitration against The Washington Redskins. The suit charges the Redskins with failing to pay overtime wages and commissions in violation of federal and state labor laws. The suit was filed by the Rubin Employment Law Firm, P.C. The suit is pending before the American Arbitration Association as the Redskins required its employees to waive their right to a jury trial as a condition of employment. All six ticket office employees worked at FEDEX field in Landover, Maryland.

The suit alleges that the Redskins failed to pay the ticket office employees the required overtime premium. The suit also alleges that the Redskins retaliated against three of the six former employees by terminating their employment within days of learning that they were asserting their rights to overtime payments. Finally, the suit alleges that the Redskins failed to pay most of the plaintiffs out of their final commission checks.

The Arbitrator recently certified the employees' claims as a collective (or class) action. A notice will be sent to eligible employees inviting them to join the claim. The Arbitrator also rejected as an initial matter the Redskins defense that they are exempt from the overtime laws as a recreation establishment.

Current and former Redskins employees who wish to learn more should call The Rubin Employment Law Firm at 301-760-7914 or email James Rubin.

Recent press coverage can be found at the Washington Post (which blogged about it here) and the Washington City Paper.

Maryland Workplace Fraud Act of 2009 - "Independent Contractors" in the Construction and Landscaping Industries

The General Assembly last session passed the Workplace Fraud Act of 2009. The Act grants to the Maryland Department of Labor authority to 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. The Act uses Maryland's broad definition of employee.

While a step in the right direction, the Act is limited. It only applies to landscaping and construction. There is no private right of enforcement (only the State Department of Labor has a right to enforce the law).

Employees who have been misclassified (in any industry) as independent contractors in Maryland have other remedies. They can often pursue claims for overtime, unpaid wages, unemployment and can appeal their tax treatment to the IRS. Contact me if you believe you have been misclassified as an independent contractor.

Important Changes to Maryland Unemployment Law

The 2009 General Assembly enacted several changes to Maryland's unemployment law (the link goes to a review of the session -- scroll down to page 35 for the unemployment law reforms)

Here are the highlights:

Increase in benefits: The maximum weekly benefit rate will increase from increase from $380 to $410 for claims establishing a new benefit year on or after October 4, 2009. For claims establishing a new benefit year on or after October 3, 2010, the maximum weekly benefit is increased from $410 to $430. Additionally, by virtue of Federal Law, unemployment benefits have been extended up to an additional 33 weeks.

Benefits for Part-Timers: Individual who work on a part-time basis for at least 20 hours per week are now eligible for benefits.

Severance pay is disqualifiying. Eliminating what many thought was a loophole all severance and dismissal payments are deductible from unemployment insurance benefits

In Record Numbers, Employers Move to Block Unemployment Payouts

The front page above-the-fold article in the Washington Post today is about how more and more employers are contesting employee claims for benefits. It provides empirical support to what I have witnessed in my law practice: an increased number of calls from employees facing appeals. Sadly, there is often not much I can do for them because, like most lawyers, I am usually reluctant to get involved in an unemployment appeal.

Edit:  As a result of a change in the law, I am now taking unemployment appeals.

Workers Rights' Legal Clinic at the University of Maryland School of Law

If you have a meritorious unemployment benefits appeal and need legal representation, you may want to contact the Workers Rights' legal clinic at the University of Maryland School of Law. Trained law students, working under the supervision of their professor, who is an experienced employment law attorney, represent claimants in unemployment appeals.
For more information you can call Professor Deborah Eisenberg at 410-706-5995.

Is Severance Pay Deducted from Unemployment Benefits in Maryland?

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UPDATE -- THE GENERAL ASSEMBLY ELIMINATED THE LOOPHOLE DESCRIBED BELOW. Severance now usually disqualifies you from receiving unemployment.
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The answer: it depends. Here is a direct quote from the DLLR Employer's Quick Reference Guide (see page 19):

The receipt of severance payments will not be deducted from . . . benefits if the individual’s job has been abolished through layoff, facility closure, etc., unless the employer continues to pay all wages and benefits, including leave accrual, after the individual has physically stopped working.

Translation: Severance will not be deducted if your job was abolished when you were laid off unless during your severance period you are receiving ALL of your wages and benefits and are still accruing leave.

Nevertheless, be careful to answer of all the DLLR's questions about severance benefits truthfully, and disclose severance benefits whenever asked.

Why Maryland Employment Lawyers Are Reluctant to Represent Claimants in Unemployment Hearings.

UPDATE:  Maryland unemployment changed the regulation discussed below.
=========================================================
Today The Washington Post published two articles on unemployment compensation: Deluge Is Holding Up Benefits to Unemployed Decline in Funding Forces Staff Cuts as Claims Swell and New Jobless Claims Surge to 626,000. The first article mentions the often harrowing appeal process that may occur when an employer contests a claim for benefits.

Potential clients often ask me if I will represent them in unemployment hearings. Sadly, my answer typically is no. The reason: a regulation limits the amount of compensation an attorney may charge for a hearing. The regulation limits the fee to $100 for a hearing, which can be increased to 150 percent of the claimant's weekly benefit amount upon an attorney submitting "an itemized account of services rendered in the case." The maximum weekly benefit amount is now $380. Hence, the maximum fee that could be awarded for an unemployment hearing is $570.

Five hundred seventy dollars is nothing to scoff at, but: (1) not every applicant is eligible for the maximum amount; (2) preparing for and attending a hearing often involves several hours of attorney work; and (3) a fee of more than $100 is awarded for a hearing only upon submission of a petition and approval by the Board of Appeals. Hence, most Maryland employment lawyers are reluctant to represent claimants in unemployment hearings.

Triple Damages Standard Under the Maryland Wage Payment and Collection Law

I recently won a verdict at a bench trial (no jury) that included enhanced damages under the Maryland Wage Payment and Collection Law. The Law allows an employee to recover up to three times the amount of earned unpaid wages. I am frequently asked what the standard is for awarding enhanced damages. The Law states that enhanced damages can be awarded if the employer withholds the money not as a result of a bona fide dispute. The Maryland Courts have interpreted this to mean that enhanced damages can be awarded if the employer withholds wages in bad faith. With any evidence of bad faith the issue should go to the jury.

How does this translate to a jury trial? Below is version of an instruction I suggested the Court give to the jury on this issue:

The Maryland Wage Payment and Collection Law authorizes employees and former employees to recover up to three times the amount of unpaid wages if the withholding of payment was not the result of a bona fide or good faith dispute.
If you rule in favor of the Plaintiff on his claims under the Maryland Wage Payment and Collection Law, you must determine whether the Defendant's refusal to pay the Plaintiff all or part of his earned commission, bonus, or severance was not the result of a good faith dispute.
An employer may be liable for treble damages for all or any portion of the amount claimed.
If you find that the withholding of all or part of the commission, bonus or severance was not the result of a good faith dispute, you may award up to three times the amount of the commission, bonus or severance that was not the result of a good faith dispute.

Sadly, Not Much To Contest About an Across-The-Board Pay Cut.

A reader recently asked:

I've read over your blog and must thank you for posting all of the information. Your blog is very helpful. I have a question that I would like to ask you that I am having trouble finding an answer to. All salary and hourly employees at the company I work for have been told that a mandatory pay cut would be put into effect on our next pay cycle. What laws exist in the state of Maryland in regards to this?

I wrote back:

Not much. Employers cannot take back money that already been earned (i.e., commissions and bonuses), and must give one paycheck notice of a pay cut.

I add: of course the decision to make the cut must be non-discriminatory and cannot reduce an employee's wages below the minimum wage.

Maryland Flexible Leave Act Likely to Be Amended

Last session the General Assembly passed the Maryland Flexible Leave Act. The Act requires employers with 15 or more employees that provide paid leave to allow the employee to use earned paid leave to care for the illness of an immediate family member (child, spouse, or parent). The Maryland Department of Labor has provided a synopsis here. Employers are prohibited from retaliating against individuals who take protected leave.

The Maryland Chamber of Commerce reports significant support to amend and clarify the Act by adding definitions. I hope to add a link to the proposed amendments when the bill is introduced.

Maryland Department of Labor to Push Bill Increasing Penalties for Mislcassifying Employees as Independent Contractors

It will be a difficult General Assembly session with our State facing nearly a $2 billion deficit. Our State Department of Labor (the DLLR) will be pushing a bill to stiffen the penalties for misclassifying employees as independent contractors for unemployment and workers compensation. Since such a bill should produce revenue it might have a better chance of passing this year.


An article in the Daily Record has this to say about the bill's likely features:

Though [DLLR Secretary] Perez said his department had not completed the legislation it will propose this year, he said the law could be a better deterrent than the “slap on the wrist” that employers now get for underpaying for unemployment or workers’ compensation. That usually involves an order that employers make back payments and may include fines.

The bill proposed last year by DLLR would have created new civil penalties including $3,000 fines for misclassification, but Perez said the violation should be referred to as “workplace fraud.”

Maryland Unemployment Benefits Extended

Congress extended unemployment benefits by twenty weeks. Check the Maryland Department of Unemployment Insurance for details.

Promised Profits and Deferred Compensation Can be a Wage -- Triple Damages Awarded!

Accountant Kevin Fetridge worked at Aronson & Co. for over 25 years. Under Mr. Fetridge's employment agreement, if he was terminated, he would receive "Terminating Employee Compensation" (TEC), a form of severance pay. However, if Mr. Fetridge violated a non-compete agreemen, Aronson would be entitled to offset damages from the TEC.

Aronson argued that the TEC was not a "wage" under the Maryland Wage Payment and Collection Law because of the offset agreement.

The Court of Special Appeals rejected this argument. It held the TEC is a wage because Mr. Fetridge was allowed to receive the TEC, at least in part, even if he violated the covenant. This is important because it allowed Mr. Fetridge to collect under the triple damages provision in the Wage Payment and Collection Law.

Aronson also argued that the definition of a "wage" under the Law does not include a business's allocation of its profits because they are not directly tied to an employee's efforts. The Court held that the jury could find that the Deferred Compensation Account funds were "promised as compensation for work performed" under the terms of his agreement and were therefore a "wage."

Aronson also appealed the jury's award under the Wage Law which allows treble damages when wages are withheld in bad faith. Aronson argued that it withheld the payments because of a bona fide dispute over whether Fetridge violated the non-compete covenant. Aronson contended that it had a good faith basis to believe that Fetridge had violated the covenant by moving to a new firm and taking Aronson's clients with him.

The jury makes the determination about the existence of a bona fide dispute, the Court held. Reviewing the record, the Court affirmed that the jury had sufficient evidence to decide that Aronson did not have a "good faith basis" for refusing to pay Fetridge.

Attorney's Fees Available Under Maryland Wage Payment and Collection Law

Karl Clark sued his former employer, Programmers' Consortium, Inc., for unpaid wages. The Consortium paid Mr. Clark sporadically because of financial difficulties in the company. He ultimately sued his former employer under the Maryland Wage Payment and Collection Law.

Under the Law, if the court finds that employer withheld the wage of an employee and it was not as a result of a bona fide dispute, the court may award the employee treble damages and reasonable attorney's fees and other costs.


A jury found that the Consortium withheld wages and it was not as a result of a bona fide dispute between the parties. However, the jury did not grant any additional damages beyond the back wages. A major question on appeal was whether the judge could award attorney's fees when the jury did not award enhanced damages.

The Court of Special Appeals decided that there are two separate and independent determinations- one decided by the jury and the other by the judge:

• The jury decides whether wages were withheld in the absence of a bona fide dispute.

• The judge decides whether to award attorney's fees, regardless of whether the jury awarded any additional damages.
  

The decision is important, especially for plaintiffs, because it allows judges to award attorney's fees and costs, even if the jury does not find the absence of a bona fide dispute and/or does not award treble damages.

NOTE: The Maryland Court of Appeals is currently reviewing this decision.

General Assembly Severely Limits Employees' Rights to Accrued Vacation Pay Upon Termination

The Maryland Wage Payment and Collection Law defines wages as including fringe benefits. Many plaintiffs' employment lawyers, like myself, argued that vacation pay is a fringe benefit earned just like any other wage. In August 2007, the Court of Special Appeals agreed with us ruling in Catapult v. Wolfe, that promised vacation constitutes a wage under the Law. Catapult was an important decision for Maryland employees. It gave them the right to sue to recover earned vacation pay and, possibly, three times the amount actually owed under the Maryland Wage Payment and Collection Law.

Employers were not happy with the Catapult decision. In a show of political force, the business lobby pushed through Senate Bill 797 as "emergency legislation.: The bill allows employers to require that their employee forfeit accrued vacation if the employer has a written policy to that effect. The Bill's fiscal note show that its intent is to undo Catapult.

The Governor signed the bill into law.

Court of Appeals Dismisses Hoffeld

As mentioned in a previous post, the Maryland Court of Appeals had agreed to review the most recent commissions case brought under the Maryland Wage Payment and Collection Law. The name of the case is Hoffeld v. Shepherd Electric. Our lower appeals court, the Court of Special Appeals, ruled that a salesman was not entitled to several commissions because the employer had not yet invoiced several deals. I helped draft a brief urging the Court of Appeals to review the decision to further define the rights that Maryland's salespeople have to their commissions in their pipeline when their employment terminates.

After oral argument, the Court of Appeals dismissed Hoffeld. The Court offered no explanation for its action. As a result the Court of Special Appeals decision is intact.

What does this mean?

1. Maryland salespeople still have the right to commission in their pipeline if they have completed the sales work necessary to earn those commissions.

2. The Court is likely to re-visit this area of the law when the right case comes around -- since Hoffeld was not the right case.

Q: My Employer Has Offerred Me Severance In Exchange for Signing a Waiver. What Should I Do?

Q: You have been fired. Your employer offers you a severance agreement. The agreement offers you money in exchange for signing a waiver. What should you do?

A: You should understand exactly what it is you are waiving. If possible, have a lawyer review the agreement. Some employers take advantage of their superior bargaining power and insert unfavorable terms in severance agreements. I have seen non-competition, non-solicitation, attorney fee-shifting, and arbitration provisions inserted into severance agreements.

You should protect your interests. Understand what your former employer will say to future employers seeking a reference. Will your former employer give you a positive, or at least, a neutral reference. Will your former employer contest your claim for unemployment benefits?

Lastly, do not leave money on the table. Understand your rights to earned wages under the Maryland Wage Payment and Collection Law.

Satisfied Client -- Commissions Case Under the Maryland Wage Payment and Collection Law

Last year I worked very hard for a client suing his former employer for commissions under the Maryland Wage Payment and Collection Law. We settled the case on the courthouse steps toward the end of the year. Because we worked so hard on the case last year I am posting with his permission my client's very kind testimonial.

To Whom it May Concern:

I am writing this letter in support of Mr. Jim Rubin. I will preface this letter by saying that I had very high expectations of the attorney I hired for my case. The amount of commission money I had at stake was substantial, and the company that I worked for was putting all of their resources into their legal machine to prevent me from collecting the money I earned. I interviewed several employment attorneys before selecting Mr. Rubin to take on my case, and am confident I made the right decision.

As a commissioned sales representative fighting for unpaid wages, I knew I needed an advocate knowledgeable in employment law. The selected attorney needed to guide me through the legal process, and counsel me throughout this stressful and emotional process.

Mr. Rubin was organized, knowledgeable, confident, and prepared for the legal onslaught we faced. After a long and hard fight, we settled the case with my previous employer. I feel very strongly that my previous employer was more amenable to settlement knowing I had a good attorney that was going to present a very persuasive case. I am thrilled with the result, but would have liked to see Jim present the case he worked so hard preparing. I have no doubt that if we had to go the distance we would have had a favorable result.

As with most serviced based occupations (real estate agents, lawyers, dentists, etc.) everyone seems to have “someone” to recommend. I am fully confident in Jim’s ability to take care of my friends, family members or colleagues that require the services of a skilled employment attorney. It is a situation that I never hope to be in again, but I am glad I now have a very good “someone” if the need arises.

Best Regards,
AJW
Former Outside Salesman

My comment on Hoffeld v. Shepherd Electric

In my prior post I reviewed the recent decision issues by the Court of Special Appeals in Hoffeld v. Shepherd Electric. After a bench trial (no jury), the Court held that the plaintiff was not entitled to several commissions because the employer had not yet invoiced several deals. The Court apparently reasoned in part that because Hoffeld knew that invoicing was part of the sale, he was not entitled to a commission on deals Shepherd had yet not invoiced by his last day worked.

After reading the decision, my feeling and the feeling of several of my colleagues was that it was not entirely consistent with the seminal case in the area, McCabe v. Medex. Medex holds that an employer cannot tie the payment of commission to a condition unrelated to the work necessary to earn those commissions. Because it appears from the trial record that Hoffeld had done all the work necessary to earn several commission, tying commission to the invoice date appeared to be arbitrary.

Hoffeld asked the highest Court in Maryland, the Court of Appeals, to review the Court of Special Appeals decision. The Metropolitan Employment Lawyers Association (MWELA) and Maryland Lawyers Association (MELA) filed an amicus brief supporting Hoffeld's request. I co-authored the brief.

I am pleased to report that Court of Appeals granted Hoffeld's request and will review the decision issued by the Court of Special Appeals.

New Commissions Case issued by Court of Special Appeals

The Court of Special Appeals recently issued Hoffeld v. Shepherd Electric Co. There, Mr. Hoffeld worked for a wholesale and retail electrical supplier as an outside salesman. Shepherd Electric paid Mr. Hoffeld solely on commission. Shepherd Electric did not pay a commission until an order was shipped and invoiced. Mr. Hoffeld had continuing responsibilities from the date a customer indicated its intent to purchase through the date of delivery and invoice. Specifically, business requirements for a customer’s particular project frequently evolved in terms of the nature, amount, and/or prices of the goods specified, inevitably requiring adjustments to the original purchase order. Such changes required Mr. Hoffeld to perform additional work throughout the order interval, continuing those duties until the order is actually shipped. When Mr. Hoffeld quit, Shepherd Electric transferred his accounts to a new representative who received the entire commission at issue.


Mr. Hoffeld contended he was entitled to commission on several purchase orders that were not invoiced and/or shipped until after his termination. Shepherd Electric contended the commission was not earned until invoiced and paid.


The Court of Special Appeals ruled that the trial court did not commit clear error in finding that sales were made and commissions were earned when the orders were shipped and invoiced. According to the Court, commissions were not linked to the arbitrary factor of employment, but to a reasonable job requirement, i.e., Mr. Hoffeld’s continuing service to a customer. Of particular importance to the Court of Special Appeals was the fact that Shepherd Electric did not keep the commissions at issue, but paid them to another salesperson who assumed Mr. Hoffeld’s accounts. Notably, in Hoffeld, the Court of Special Appeals stated Shepherd Electric’s policy was properly scrutinized to ensure that it has not been used to circumvent the MWPCL. Indeed, an employer may not terminate an employee as pretext to avoid paying commissions. Such act would violate the Wage Payment and Collection Law.

Triple Damages Under the Maryland Wage Payment and Collection Law

I frequently represent salespeople seeking unpaid commissions under the Maryland Wage Maryland Wage Payment and Collection Law. I have written about this area of the law many times.

One important part of the Maryland Wage Payment and Collection Law is the provision that allows the Court to award triple damages if the plaintiff successfully proves his or her claims. If the jury finds that an employer withheld earned commissions “not as a result of a bona fide dispute,” the jury may award the employee an amount not exceeding 3 times the wage. The Court may then also award reasonable counsel fees and other costs. Under the provision, a claim for $25,000 may represent $75,000 or more of potential liability.

What does a plaintiff need to prove to get triple damages?

• Here is a brief on when employees are entitled to triple damages under the Maryland Wage Payment and Collection Law.

• Here are suggested jury instructions on triple damages.

Top Five Ways Employers Violate Maryland's Wage Laws

I am amazed at how creative employers can be when it comes to violating Maryland's wage laws. However, as my law practice continues to grow, several consistent wage violations continue to recur. In no particular order, here is what I see.

1. Employers fail to pay their non-exempt employees overtime when they work more than 40 hours in a week.
2. Employers misclassify their non-exempt employees as exempt from receiving overtime.
3. Employers misclassify their employees as independent contractors.
4. Employers fail to pay salespeople commissions in their pipeline when their employment terminates.
5. Employers fail to pay accrued vacation at termination.

How Employment Lawyers Charge Their Clients

Employment lawyers work to earn money. When an employment lawyer is evaluating a case his or her eyes are on the bottom line. "Can I service my client while making a profit?" is the question we are asking. Many cases come with laudable rewards in addition to money, including working to attain a measure justice for our clients. But do not kid yourself: lawyers work for money.

There are four ways a lawyer can charge: by the hour, on a flat rate, on a contingency-fee basis, or some combination therof. Choosing how to charge involves an evaluation of risk for both the attorney and the client.

Hourly billing -Most risky for client; Least risky for attorney.

The attorney keeps track of his or her time and send the client a bill for the hours worked. Because liability often is not readily apparent in employment law cases, many employment law attorneys require that the initial phase of the attorney-client relationship be based on hourly billing. In purely defensive cases, such as when an employer is claiming my client is violating a non-competition agreement, hourly billing is often the most rational choice. (Much has been written about hourly billing variants, such as value-based billing. I am keeping it simple for this article.)

Flat Rate -- Moderately risky to the client; Moderately risky to attorney.

Employment lawyers bill a flat rate for certain discrete tasks. For example, I have processed federal employee disability retirement applications on a flat rate. The client pays a set fee and does not need to worry about the amount of time I am spending on his or her matter.

Contingency Fee -- least risky to the client; most risky to attorney.

The attorney only recovers a fee if the client wins. For this reason, most employment attorneys will not consider a pure contingency fee relationship unless the employer's liability and ability to pay are clear. I generally only consider pure contingency fee arrangements in overtime, unpaid commissions, and accrued vacation pay cases.

Combination of Hourly, Flat Rate, and/or Contingency Fee.

The lawyer and client and agree to any combination of the above. For example, the lawyer and client may agree to hourly billing until the bills reach a certain dollar amount and then agree to convert the matter to a contingency fee relationship. The possibilities are infinite and require careful analysis of the merits of the claim and the possibility for settlement or success at trial.

Accrued Vacation Pay Is Covered by the Wage Payment and Collection Law

I have written many articles on why accrued vacation should be considered a wage under the Maryland Wage Payment and Collection Law (MWPCL) . This is an important issue for Maryland employees. If accrued vacation is covered by the MWPCL, a plaintiff suing to recover earned wages may be entitled to three times the amount actually owed.

The Maryland Court of Special Appeals settled the matter in favor of Maryland employees. In Catapult Technology, LTD v. Wolfe, the Court held that accrued vacation is covered by the MWPCL and cannot be forfeited. The Court stated that information on on the Maryland Department of Labor's website stating that accrued vacation is not a wage -- is wrong. In a troubling portion of the opinion the Court denied treble damages finding that the plaintiffs did not prove Catapult kept their earned waged in bad faith.

My colleague, Marc Smith, of Smith, Lease and Goldstein,and WageCollection.com, litigated this case.

Protecting Employee Rights in the State Courts of Maryland

The Third Annual Maryland Employment Lawyers ("MELA") Conference, "Protecting Employee Rights in the State Courts of Maryland," will be Friday, September 28, 2007 at the Columbia Sheraton.

There will be an exciting line-up, focused on how to succeed in the Maryland state courts. Special attention will be given to the new private right of action under 49B, Maryland's anti-discrimination law. Judges from various circuit courts in Maryland, and from the Office of Administrative Hearings, will give an insider's view to their jurisdictions. You'll also learn how to run a "lean and mean employment law practice," and get tips from seasoned employment litigators about how to win employment cases in the circuit courts (especially under local county codes). A full agenda is below and a brochure/registration form is attached.

8:30-9:00 a.m. Registration and Continental Breakfast

9:00-10:00 a.m. How to Run a Lean and Mean Employment Law
Practice

Moderator: Mary T. Keating, Esq.
Law Office of Mary T. Keating

Daniel A. Katz, Esq.
Andalman & Flynn, PC

Gwenlynn Whittle D'Souza, Esq.
Lippman, Semsker & Salb, LLC

Peter Holland, Esq.
The Holland Law Firm, PC

Break

10:15-11:15 a.m. Mechanics of the New Private Right of Action
under 49B

Moderator: Deborah Thompson Eisenberg, Esq.
Brown, Goldstein & Levy, LLP

Kathleen Cahill, Esq.
Law Offices of Kathleen Cahill, LLC

Glendora Hughes, Esq.
General Counsel, Maryland Commission on
Human Relations

11:15-12:15 p.m. Tips for Litigating Discrimination Claims
under the Local County Codes

Moderator: Thomas Gagliardo, Esq.
Gagliardo Law Firm

Linda Hitt Thatcher, Esq.
Thatcher Law Firm, LLC

Rebecca N. Strandberg, Esq.
Rebecca N. Strandberg & Associates

Leizer Goldsmith, Esq.
The Goldsmith Law Firm, LLC

Tammany M. Kramer, Esq.
Heller, Huron, Chertkof, Lerner, Simon & Salzman, PLLC

12:15 - 1:30 p.m. LUNCH

Keynote Speaker:
The Honorable Thomas Perez, Secretary Maryland Department of Labor, Licensing & Regulation

1:45 - 2:45 p.m. How to Litigate a State Administrative Hearing
at the OAH

Moderator: James E. Rubin, Esq.
Rubin Employment Law Firm, P.C.

The Honorable Thomas Dewberry
Chief Administrative Law Judge, OAH

The Honorable Bernard McClellan
Administrative Law Judge, Deputy Director of Quality Assurance, OAH

The Honorable Wayne Brooks
Administrative Law Judge, Deputy Director of Operations, OAH

Jessica Kaufman, Assistant Attorney General Maryland Department of Labor, Licensing and Regulation

Break (Sponsored by JMW Settlements)

3:00 - 4:15 p.m. Views from the Bench: Litigating in Maryland's Circuit Courts

Moderator: Jerry R. Goldstein, Esq.
Bulman, Dunie, Burke & Feld

The Honorable Evelyn Omega Cannon
Circuit Court for Baltimore City

The Honorable Toni E. Clarke
Circuit Court for Prince George's County

The Honorable Ronald B. Rubin
Circuit Court for Montgomery County

4:15 - 5:00 p.m.
MELA Happy Hour

Top Five Ways Restaurants Violate Wage Laws

Over at wagecollection.com, I noted the top 5 ways restaurants violate wage laws.

Employees win Jury Verdict in Accrued Vacation Case

I have argued many times that earned accrued vacation pay counts as wages under the Maryland Wage Payment and Collection law. Counting vacation pay under the law is significant because it allows employees to collect up to three times the amount owed if an employer wrongfully withholds earned vacation pay.

My colleague Marc Smith at Smith, Lease and Goldstein reports at the wage collection blog that he won a jury verdict obtaining accrued vacation and additional damages under the Wage Payment and Collection Law.

DISCLOSURE: Mr. Smith and I are using the wage collection blog to report on updates on developments in wage law and on our own wage collection cases.

Two More Ways to Leverage Your Way Out of A Non-Compete

On this post, I listed three ways to leverage your way out of a non-compete in Maryland:

• Convince your employer to reduce your non-compete obligations by agreeing not to initiate litigation. Another way to put this is convince your employer that the litigation will be more expensive than the benefit of enforcing a non-compete.
• Find out what your employer's real interests are. It may not want you working for its established competitors and may not care if you are working for a start up.
• Give a little. Do you have something the employer wants, like money it owes you for severance? You might offer something of value in exchange for a release from any non-compete obligations.

Here are two more:

• Examine your affirmative claims. Do you have a wage payment, overtime, or discrimination claim that is of equal or greater value to your employer's claimed non-compete violation? If so, it may make sense for the parties to release each other from the alleged violations in a settlement agreement rather then pursuing expensive litigation.
• Convince your employer that the non-compete agreement is not aimed at a protectable interest.

A Non-Compete Success Story

I recently defended an individual salesperson accused of violating a non-compete agreement. (The individual, the companies involved, and the result are confidential.) What I believe played a major role in the favorable result was establishing who can and who cannot be subject to a non-compete in Maryland. Here are two paragraphs (slightly modified) from the papers in the case:

Because non-compete agreements by their nature conflict with the “natural and inherent” right of individuals to pursue their livelihoods and with the right of the “general public . . . to have the energy, industry, skill and talents of all individuals freely offered upon the market,” they are closely scrutinized and narrowly enforced by Maryland's courts . . .

Furthermore, to be enforceable a non-compete agreement must protect a legitimate interest. With regard to salespeople generally the only legitimate interest is preventing a former employee from using a list of unique customers. Non-competition agreements are not enforceable against a relatively unskilled worker who does not actually solicit his or her former employer’s customers. . .

Maryland Permits Church Organist to Continue Lawsuit

I have written a lot about Archdiocese of Washington v. Moerson. Here is a summary I wrote more than a year ago:

In Moerson, the Circuit Court and Court of Special Appeals issued conflicting decisions on whether the "ministerial exception" to Maryland's employment laws applies to an organist's claim against his former employer.

According to established precedent (Presbyterian Church v. Hull Memorial Presbyterian Church), the "free exercise" clauses to the United States and Maryland Constitutions create a zone of autonomy for religious organizations. The church autonomy doctrine deprives civil court of subject matter jurisdiction to review matters involving church governance and doctrine. However, the First Amendment is no impediment to a civil court's jurisdiction when it can resolve a Church's conflict by "neutral principles of law" without examining its religious doctrine (Maryland and Virginia Eldership of the Churches of God v. Church of God at Sharpsburg, Inc.).

As applied to statutory or common law employment claims, the church autonomy doctrine bars a civil court from reviewing a church's employment decisions regarding its ministers (hence, the phrase "ministerial exception."). This is so because the "perpetuation of a church's existence may depend upon those whom it selects to preach its values, teach its message and interpret its doctrines both to its own membership and to the world at large." (Rayburn v. General Conference of Seventh Day Adventists). But when a matter does not involve a minister, a civil court may resolve employment disputes, even if they are within a Church, if the
employee provides a purely secular service for the church (as in the 1982 decision EEOC v. Pacific Press Publ'g Ass'n, when the Civil Rights Act was applied to an editorial secretary in a church publishing house). Defining the line between ministerial and secular is often the issue in these cases as it is in Moerson.

Today, in a 4-3 decision, the Court ruled that Mr. Moerson is not a ministerial employee ruling that he merely accompanied relgious services.

Overtime Calculator

Calculating your overtime premium can be a pain. Now the U.S. Department of Labor has an overtime calculator on its website to help with your calculations. Are you owed overtime? Check the calculator to see. (Thanks to Michael Fox at Jottings by an Employer's Lawyer for the link)

Maryland Department of Labor to add Wage investigators

An employee who is owed wages from his or her employer can pursue an action to collect those wages under the Maryland Wage Payment and Collection Law. The employee has two options: (1) hire a private attorney to sue his or her former employer; (2) report the employer to the Maryland Department of Labor, Licensing and Regulation ("DLLR"), Employment Standards Division.

Under Governor Ehrlich, by 2006, the Employment Standards Division had zero investigators devoted to wage payment claims. (For this reason I was reluctant to send employees to the DLLR).

According to the new DLLR Secretary, Thomas Perez, the O'Malley administration added budget money to hire six investigators. As of the ariting of the article cited here, the Department had filled three positions.

Of note:

1. The investigators' starting salary is $24,000 per year.
2. O'Malley's transition teams suggested that Maryland hire 11 investigators.

Two Key Maryland Cases End Today

1. The Fourth Circuit's "black monkeys" case narrowed Title VII's anti-retaliation protection for employees working in Maryland. The Court held that by reporting to your boss that your co-worker called African-Americans "black monkeys" and "black apes," you are not opposing discrimination in the workplace (and therefore not entitled to Title VII's anti-retaliation protections). The Court reasoned that because a single discriminatory outburst does not violate Title VII, opposing such an outburst is not entitled to protection. See here, here, here, and here. Today, the Supreme Court declined to review the Fourth Circuit's decision in Jordan v. Alternative Resources Corp.


2. Attorney General Douglas Gansler today announced he would not seek Supreme Court review of the Fourth Circuit's decision holding that the Maryland's Wal-Mart law is preempted by ERISA. The Wal-Mart law, summarized here, would have required the company to spend at least 8% of its total wages on health insurance.

Restaurant Workers Among the Most Abused.

In fiscal year 2006, the Department of Labor collected nearly $50.6 million in back wages for approximately 86,700 workers in "low-wage industries." What industry made up the bulk of the violations? The restaurant industry.

Although the statistics are drawn from the entire nation, I know it is no different in Maryland since this firm (and several of my colleagues) have pursued claims on behalf of servers, kitchen workers, and custodial employees.

Are You Really an Independent Contractor?

Monday is tax day. Is the individual responsible for payroll taxes or is the employer? Is the individual entitled to overtime for working more than 40 hours in a week. It may depend on whether the individual is an independent contractor or an employee. How can you tell?

One place to start is Maryland's unemployment law. That law provides a narrow (perhaps the narrowest) definition of an independent contractor. The law states an individual is an independent contractor if:

(1) the individual who performs the work is free from control and direction over
its performance both in fact and under the contract;

(2) the individual customarily is engaged in an independent business or occupation of the same nature as that involved in the work; and

(3) the work is: (i) outside of the usual course of business of the person for whom the work is performed; or (ii) performed outside of any place of business of the person for whom the work is performed. (emphasis added)

The Court of Appeals interpreted the statute in DLLR v. Fox. There the Court held that hygienists (and other professionals) were employed by the agency that placed them in temporary positions in the Baltimore area. Why? The hygienists were not "free from control" by the agency. The agency "controlled" the hygienists' placement and pay rate. (As a result the agency had to pay back unemployment tax premiums for hygienists).

Again, the Maryland unemployment law independent contractor test is one of the most restrictive. The IRS and common law tests are slightly different. But, if your employer controls your work and sets your pay you may well be an employee entitled to unemployment benefits.

Do you believe you have been misclassified as an independent contractor? Contact me.

True or False: Maryland Law Does Not Require Employers to Give Breaks to their Adult Employees.

[UPDATE: Starting March 1, 2011, certain retail employee will be entitled to breaks.]

True. According to the Maryland Department of Labor: "There is no law requiring an employer to provide breaks, including lunch breaks, unless the employee is under the age of 18."

But if an employer gives you a "break" you must be completely relieved of your duties for at least twenty minutes. Otherwise you are working and should be compensated for this "break" time. See this post.

Medex v. McCabe and Accrued Vacation

The Maryland Court of Appeals seminal wage payment and collection law decision is Medex v. McCabe. The rule of Medex is:

If an employee earns compensation he or she is entitled to it and an employer cannot arbitrarily require an employee to forfeit those wages.

The Court of Appeals reinforced Medex's holding in a severance case, Stevenson v. BB&T. The Court distinguished between severance an employee earns and severance an employer gives the employee for something other than his or her labor (such as in exchange for a covenant not to compete or in exchange for a waiver of claims). Earned severance is subject to the Wage Payment and Collection Law; unearned severance is not subject to the Wage Payment and Collection Law. (Coverage matters because the Wage Payment and Collection Law allows an employee to recover up to triple the amount owed and his or her attorney's fees.)

Is the law any different for vacation pay. I think not. Medex nearly says as much. The Court citing a series of out of state decisions comes to the conclusion:

[A]n employee’s right to compensation vests when the employee
does everything required to earn the wages

If an employer allows employee to accrue or earn vacation based the time they work such vacation "vests."

Note the idea of vesting vacation pay exists in other states, most notably California.

A Tail of Two Wage Bills.

Legislators introduced two interesting wage bills in this General Assembly session. One "living wage bill" raises the minimum wages for employees working for state-government contractors. The other bill seeks to limit executive compensation to a maximum of thirty times a company's lowest paid worker. (Thanks to Trevor Rosen at the Maryland Law Blog for pointing me to the executive compensation bill)


A vote on a living wage bill is expected today. According to the Daily Record:

The House of Delegates is expected to vote Friday on House Bill 430, which would make Maryland the first state to require companies with state contracts to pay the living wage. The wage would apply to workers on contracts worth $100,000 or more and would be set at $11.30 an hour for contracts performed in Baltimore City and Montgomery, Prince George’s, Howard, Anne Arundel and Baltimore counties. State contracts in the remaining counties would require workers to be paid $8.50 an hour.

The executive compensation bill appears unlikely to make it out of Committee.

Employers May Not Have their Hand in Restaurant Workers' Tip Pool

Employers can pay restaurant workers the "sub minimum wage" ($3.08 per hour in Maryland) because servers and waiters can make up the difference earning tips. Employers call this the "tip credit" against the minimum wage.

Employers may pool all tips and distribute them equitably to those employees who are in the business of providing service to the customers. This is called a tip pool.

But can the House keep any tips? Absolutely not. If the employer keeps the tips then it is not entitled to the tip credit. In such case the serves would have valid claims for the full minimum wage.

Restauruant workers who work overtime: are you entitled to 1.5 x $3.08 per overtime hour or 1.5 x the minumum wage?

Which is it? Hint: Restaurants frequently get the answer wrong. Here is the answer from the United States Department of Labor website:

Overtime: Overtime must be paid at a rate of at least one and one-half times the employee's regular rate of pay for each hour worked in excess of 40 hours per week. Tipped employees who receive $2.13 per hour in direct wages are also subject to overtime at one and one-half times the applicable minimum wage, not one and one-half times $2.13.

Note: Maryland's minimum wage for tipped employees is $3.08.

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.

General Assembly Extends Discrimination Cause of Action Statewide

I wrote here about a quirk in Maryland's anti-discrimination laws. At the time only individuals who lived in four Maryland counties (Prince George's, Montgomery, Howard, and Baltimore County), could file a lawsuit alleging a violation of a local civil rights ordinance.

On March 23, 2007, Maryland General Assembly extended the law to cover the entire State. If Governor O'Malley signs the law, which is expected, all Maryland residents will have the right to bring suit under a local anti-discrimination law. The bill, which takes effect on October 1, 2007, opens the door to state court for discrimination victims.

Daniel Snyder Makes the Number 1 Employment Law Mistake: Jury Awards $44,880 to Nanny

What is the number one employment law mistake? Failing to pay overtime to non-exempt employees. Redskins owner Daniel Snyder learned the hard way after a Montgomery County jury awarded his former nanny $44,880 in unpaid overtime. The jury declined to award the nanny additional damages under the Maryland Wage Payment and Collection Law.

Snyder also learned that Maryland's overtime law contains no exception for in-home workers. Any person who pays another person to work can be an employer in Maryland.

Snyder could have easily avoided the lawsuit with no extra cost. How? You will have to email me to find out.

Rejecting Offer May Disqualify You From Receiving Maryland Unemployment Benefits

STS (a company) laid off Sharon Long from a seasonal position. She applied for unemployment benefits. A few weeks later STS offer Ms. Long a job at a higher rate of pay, but only until tax season ended. Ms. Long rejected the offer because she wanted to full time permanent work.

STS contested Ms. Long's unemployment claim. The company contended that she should be disqualified because she rejected STS's employment offer without good cause. Hence, STS presented the issue -- ultimately decided by the Court of Special Appeals -- of whether Ms. Long's decision to rejects STS's offer was made for good cause.

According to the Court:

We hold that under the circumstances of this case an ordinarily reasonable individual would not have turned down the offer of seasonal employment made by STS. Crucial to our decision in this regard is the fact that Long was offered
a “suitable job.” The job duties were exactly the same as the position she had last held before she became unemployed – and the pay was better.

Best Sources for Maryland Employment Law

My five favorite sources for Maryland Employment Law:

1. Maryland Courts Watcher -- a review of most maryland judicial opinions.
2. Maryland State Court Opinion Index.
3. United States District Court of the District of Maryland Opinions.
4. Paul Mollica's Review of the United States Court of Appeals for the Fourth Circuit.
5. Maryland Business and Technology Court Opinions.

Since the original posting I discovered another excellent site: Trevor Rosen's Maryland Law Blog.

Non-Competes Are Only Enforceable if Directed at a Legally Protected Interest

Not all employees can be covered by non-compete agreements. For example, if you are an administrator with little contact with customers or your employer's secrets, a court is unlikely to enforce any non-compete you signed. Non-compete agreements generally can only be enforced if directed at a legally protectable interest. Maryland Courts have found there to be a only a few (perhaps only two) legally protectable interests. Foremost among those interests are an employer's relationship with its customers and an employer's trade secrets.

No access to customers or secrets = no non-compete.

The Maryland Court of Appeals summarized the concept of what is a protectable interest forty years ago in Silver v. Goldberger. The concepts stands to this day. The Court stated:

There is a line of cases which holds that restraint is justified if a part of the compensated services of the former employee consisted in the creation of the good will of customers and clients which is likely to follow the person of the former employee. And there is another line of cases which holds that restraint is not justified if the harm caused by service to another consists merely in the fact that the former employee becomes a more efficient competitor just as the former employer did through having a competent and efficient employee.

Maryland Court of Appeals Grants Cert. in Two Employment Law Cases

The Maryland Court of Appeals will review two employment law cases in its September 2006 term. Both cases arise in Montgomery County. The issues presented are set forth below.

Sterling v. Atlantic Automotive (Ct. Spec. App. unreported) will address the extent an employer is vicariously liable for the harassment of its employee. Will the Court adopt the United States Supreme Court's Faragher/Ellerth anaylsis? In today's Haas opinion, the Court specifically declined to follow U.S. Supreme Court precedent on a statute of limitations issue.

Friolo v. Frankel will decide the extent to which a plaintiff can recover attorney's fee under the Wage Payment and Collection Law for work performed on a successful appeal overturning a trial judge's fee award. The Court of Special Appeals denied the plaintiff's claims for appellate fees.

Haas: Maryland Court Rules That Statute of Limitations For Discrimination Claim Begins At Termination

I wrote here that the Maryland Court of Appeals granted cert in Suzanne Haas v. Lockheed Martin Corporation. The issue in Haas is when the statute of limitation commences in a discrimination case. Haas contended that the statute began to run on the day that she was actually discharged, October 23, 2001. Her employer contends that the statute began on the day that she was notified of her prospective discharge, October 9, 2001. Haas filed suit October 22, 2003. The statute of limitations for her state law (Article 49B) discrimination claim is two years from the date of the occurence.

Today, the Court of Appeals issued its decision in favor of Haas and found her statute of limitations began on the date she was actually discharged. The Court rejected United States Supreme Court precedent stating that the statute of limitations in discrimination claims begins when a plaintiff has notice of her claims.

More on Accrued Vacation and the Maryland Wage Payment and Collection Law

A line of Maryland cases states that under the Maryland Wage Payment and Collection Law an employer cannot require an employee to forfeit earned wages. Accrued vacation is undoubtedly earned as it is accrued.


Which of the following statements is true:

A. "[I]f an employer informs employees at hiring that unused vacation leave will be lost or forfeited when employment ends, then an employee will probably not be able to claim it."

OR

B. Wages under the Maryland Wage Payment and
Collection Law include: "some accrued or accumulated compensation such as vacation ("annual") leave, sick leave, or other promised benefit."

Statement B is a correct statement of law; Statement A appears to be false. The problem is that both statements, which contradict each other, are taken from the Maryland Department of Labor, Licensing and Regulation's Guide to Wage Payment and Employment Standards.

To further complicate matters, in the 2006 legislative session, several Delegates sponsored House Bill 701 which would have made explicit an employer's obligation to pay accrued vacation. The Bill died in committee. The Fiscal and Policy Note apparently picks up the contradictory language from the Department of Labor, Licensing and Regulation's website. The note states:

In Maryland, the question as to whether an employer must pay an employee for vacation leave upon termination depends on the employer's policies. In the Wage Payment and Collection Law (WPCL), wage means all compensation due an employee and includes any fringe benefit promised in exchange for service. Accrued vacation leave, which accumulates as an employee provides services, is then sometimes viewed as recoverable under WPCL.

My advice: ignore the DLLR's website and follow the WPCL: accrued vacation counts as earned wages.

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.

What You Write Can Become the Reason You Are Fired

I recently signed up for an account on myspace. Not to be a crumudgeon, but in browsing the site, I cannot help but notice that individuals post pictures and comments that they would never want known in the workplace. I then read a series of excellent articles by George Lenard (at George's Employment Blog) about how employers might use such content to screen out or terminate employees.

Would an employer be wrong to use such information in making hiring and firing decisions? Probably not, as long as it acted consistently without regard to an employee's protected class.

You are what you write.

True or False: All computer help desk employees are exempt from receiving overtime (i.e., not entitled to overtime).

FALSE.

The U.S. Department of Labor recently ruled that certain help desk employees are entitled to overtime (if they work more than 40 hours in a week). These help desk employees' duties and the amount of time, in general, that they would spend on such duties are described below:

55%─Analyzes, troubleshoots, and resolves complex problems with business applications, networking, and hardware. Accurately documents all work in
appropriate problem tracking software. Prioritizes tasks based on service level agreement criteria with limited supervision.


20%─Installs, configures, and tests upgraded and new business computers and applications based upon user-defined requirements. Assists users in identifying
hardware/software needs and provides advice regarding current options, policies, and procedures. Creates and troubleshoots network accounts and other business application user accounts as documented in the employee lifecycle process.


10%─Participates in the design, testing, and deployment of client configurations throughout the organization. This process requires detailed knowledge of Microsoft operating systems and compatible business applications. Leverages application packaging software technology for deployment of business applications to client systems.



5%─Participates in the analysis and selection of new technology required for expanding computing needs throughout the organization. Works with competing vendors to determine the best selection based on price, technical functionality, durability, manufacturer support, manufacturer vision, and position in the healthcare industry.


5%─Documents technical processes and troubleshooting guidelines. Documents end-user frequently asked questions about computer systems or programs and publishes on Intranet as guidelines for the entire organization.


5%─Monitors automated alerts generated by systems management tools and makes decisions on the most effective resolution.

The U.S. Department of Labor ruled that these help desk employees did no fall within either the administrative or computer employee exemptions. Therefore, these employee are likely entitled to overtime pay when they work more than forty hours in a week.

My Employer Just Changed Me From Salaried to Hourly, What Should I do?

Overtime laws divide the workforce into two categories:

1. Salaried exempt employees not entitled to overtime; and
2. Hourly nonexempt employees entitled to overtime.

Which category are you in? It depends on what your job duties are. The U.S. Department of Labor's fair pay website does a good job of describing the type of duties that qualify an employee as exempt and not entitled to overtime.


What is an employer to do when it realizes it wrongly classified an employee as exempt and failed to pay overtime?

Usually, an employer will simply change the employee's classification, begin to track his or her hours worked, and start paying overtime.

But, what about the years that the employee has spent working in the wrong classification and losing out on overtime? That employee likely has a good claim against his or her employer for all of the back overtime worked over the past two or three years. That person should consider meeting with an attorney immediately to discuss his or her options. I say immediately because the statute of limitations in overtime cases run from each paycheck that should have included overtime, but did not. For an employee who was wrongly denied overtime for more than two years, the longer he or she waits to assert a claim, the fewer pay periods that the employee can challenge in Court.

Should I Stay or Should I Go? What to do when you are harassed at work.

Clients facing difficulties at work often ask me: "Should I just quit?" I often respond that there are two ways to look at the question.

1.The Legal Answer. Quitting will not usually help the employee who is considering taking legal action against his or her employer. It is better to consult an attorney, have that attorney file your claim, and endure while the legal process runs its course.

Quitting may cutoff any claim for back pay, unless your working conditions are so intolerable that you can prove a constructive discharge(discussed here)

Quitting may make it more difficult to collect unemployment benefits unless the employee can prove he or she quit for "good cause." Good cause is explained here at page 16.

Most anti-discrimination and wage and hour statutes have provisions that forbid employers from retaliating against an employee who complains in good faith that his or her employer is violating the law. As a result, an employee who make his or her complaint known to his or her employer has an added measure of legal protection. The United States Supreme Court recently addressed Title VII's anti-retaliation protections in the Burlington Northern case.


2.The Reality Check: If going to work is so bad that it is affecting your emotional health, you should consider quitting. You should weigh the potential legal advantages of sticking it out against the emotional toll of continuing to work at you current job. I often tell unhappy employees that ending your current employment relationship will not help your legal claim, but may be the best decision you ever make since it gives you the opportunity to find a better job.

Q: Are You Entitled to Severance? A: It depends.

No Maryland law guarantees an employee's right to severance. Unless an employer promises severance, there is nothing that requires an employer to offer it. However, there are three main ways an employee may obtain severance.


1. As part of an employment contract or severance plan. Some employees negotiate a severance at the outset of their employment. Severance is used as a carrot to entice the employee to accept a job offer. For example, an employer could agree to pay one week of severance for every year of employment. In such case, severance might constitute earned wages under the Maryland Wage Payment and Collection Law. This is important because the MWPCL provides an employee with the opportunity to file suit for earned but unpaid wages, treble damages and attorney's fees.


2. As part of a non compete agreement. Severance can be used to entice an employee to agree not to compete for a period after his or her employment terminates. The Maryland Court of Appeals has suggested that this type of severance is not earned and therefore not covered by the Maryland Wage Payment and Collection Law. (An employee could still recover unpaid severance, but would need to do so by alleging breach of contract.)


3. In exchange for a waiver of claims. When an individual's employment terminates, the employee and employer often want a clean break. They can accomplish this goal by entering into a settlement agreement. Often the employee agrees not to sue in exchange for severance.

Maryland Non-Competes: Things to consider before you sign one.

Starting with the assumption that reasonable non-compete agreements are enforceable in Maryland, what should you do if your employer asks you to sign one? If possible, you should do the following:

1. Try to get out of signing the agreement in the first place.

2. Try to narrow the agreement's terms. Find out which competitors and geographic ares your employer really cares about. Limit the agreement's reach to those terms.

3. Suggest that what your employer really wants is a non-solicitation agreement, i.e., your promise not t0 raid the company of its key employees.

4. Demand compensation. If your employer wants you to get out the industry for a period, your employer should pay for it.

5. Hire a lawyer to review your agreement and meet with you before signing away your right to a livelihood. Employers get legal advice -- so should you. Employers often put highly unfavorable terms -- such as attorney-fee shifting provisions -- in non compete agreements. Consult counsel to know your rights.

Q: Can you leverage your way out of a Maryland Non-Compete? A: Maybe.

As shown by my posts about non-competes in Maryland, reasonable non-compete agreements are generally enforceable. (Further, even if a non-compete agreement is overbroad, many Maryland Judges believe they have the power to re-write such an agreement to make it enforceable). So, can you get out of them or limit them? Maybe. Just as you and your employee can agree to enter a non-compete; you and your employer can agree to modify a non-compete. The more leverage you have, the more likely you can modify a non-compete to your liking. How can you generate leverage? Here are a few ideas:

1. It can be a very expensive proposition for an employer and an employee to litigate to determine if a non-compete is really enforceable. You may convince your employer to reduce your non-compete obligations by agreeing not to initiate litigation.
2. Find out what your employer's real interests are. It may not want you working for its established competitors and may not care if you are working for a start up.
3. Give a little. Do you have something the employer wants, like money it owes you for severance? You might offer something of value in exchange for a release from any non-compete obligations.

Court Enforces Agreement Barring Employee from Working for a Competitor in North America and Mexico for Two Years

The Baltimore Circuit Court permanently enjoined James Braithwaite from working a competitor of his former employer in this decision. Braithwaite signed a non-competition agreement that forbade him from working for any employer in liquid filling system industry located in the United States or Mexico for a period of two years. The Court characterized the industry as "highly specialized" and "relatively small." As such, the Court ruled that the non-competition agreement was reasonable in duration and geographic scope.

Fail to Pay Maryland State Income Tax -- Lose Your Professional License

In 2003, the General Assembly enacted a law that provides that individuals who do not pay their taxes cannot renew their State professional licenses. See 2003
Laws of Maryland ch. 203 § 24.

Along comes Dr. Knoche, a dentist, who did not pay any state income tax between 1980 and 1989. In July 2004, the Dental Board denied Dr. Knoche's application to renew his dental licences.

In Knoche v. State, the Court of Special Appeals upheld the Constitutionality of the law and told Dr. Knoche that he was out of luck.

In 5-5 Split, Fourth Circuit Denies En Banc Review of Black Monkeys Case

By reporting to your boss that one co-worker called African-Americans "black monkeys" and "black apes," are you opposing discrimination in the workplace? (An employer cannot retaliate against an employee for opposing workplace discrimination.) Two Fourth Circuit judges (out of a three judge panel) had ruled that reporting a single racist comment is not sufficient opposition to be entitled to Title VII's anti-retaliation provision. See here, here, and here.

Now, by a vote of 5 to 5, the full Fourth Circuit denied en banc review of Jordan v. Alternative Resources Corp. En banc review (that is: review by all of the judges on the court) requires a majority vote. As a result, employers in Maryland are free to fire employees who complain that a co-worker made a racially derogatory remark.

I imagine this case is headed to the United States Supreme Court.