Tuesday, January 15, 2019

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

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

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

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

No comments: