Maryland Employment Law

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

2008-05-13T15:32:00.005-05:00

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

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

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

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

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

5. Gather other relevant documents presented in an organized fashion, including:

Evidence of affirmative claims you have against your former employer. Are you owed wages? Were you mistreated? Employees often can use their own claims to leverage their ways out of a non-compete agreement;
Documents you believe your old employer might claim as evidence of your breach.
Contact information for your new employer and any potential witnesses.

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

2008-05-13T11:04:00.002-05:00

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

2008-05-13T10:46:00.003-05:00

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?

2008-01-18T14:44:00.000-05:00

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

2008-01-16T15:16:00.000-05:00

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

2007-12-30T09:39:00.000-05:00

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

2007-11-28T10:12:00.000-05:00

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

2007-11-27T15:45:00.001-05:00

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

2007-09-04T11:02:00.000-05:00

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.

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

How Employment Lawyers Charge Their Clients

2007-08-30T14:07:00.000-05:00

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

2007-08-29T13:53:00.000-05:00

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

2007-07-27T10:54:00.000-05:00

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

2007-07-26T13:05:00.000-05:00

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

Employees win Jury Verdict in Accrued Vacation Case

2007-07-23T08:12:00.000-05:00

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

2007-07-20T09:45:00.000-05:00

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

2007-07-20T09:25:00.000-05:00

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

2007-06-14T16:40:00.000-05:00

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

2007-05-14T16:25:00.001-05:00

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

2007-05-14T09:12:00.000-05:00

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

2007-04-17T20:01:00.001-05:00

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.

2007-04-17T08:09:00.000-05:00

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?

2007-04-13T09:13:00.000-05:00

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.

2007-04-11T08:12:00.000-05:00

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

2007-04-09T08:54:00.000-05:00

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.

2007-04-06T08:48:00.000-05:00

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.