Wednesday, November 28, 2012

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

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

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

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

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

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

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

The Company, of course, appealed.

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

Tuesday, November 27, 2012

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

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

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