Digital privacy rights have received more attention since it was revealed that the voter-profiling firm Cambridge Analytica gained access to personal data of millions of Facebook users. This prompted the European Union to establish some of the toughest online privacy regulations in the world. Even companies outside Europe must comply with the E.U.’s new General Data Protection Regulation (“GDPR”) if their web presence extends into Europe. Facebook, for example, announced in April that it will offer the privacy controls required under the GDPR to all Facebook users, not just Europeans.
The State of California also recently enacted the Consumer Privacy Act, A.B. 375, which is modeled on the GDPR. The California Consumer Privacy Act is set to take effect on January 1, 2020, giving citizens an array of new rights, and more control over how their data is used. California consumers will have the right to request deletion of personal information, to opt-out of the sale of personal information, and to access personal information in a “readily usable format” that enables transfer to third parties without hindrance. It also makes it more difficult to share or sell data related to children younger than 16.
This California law will have an impact outside of that State, because it will apply to any legal entity that (i) does business in California, (ii) is operated for the profit or financial benefit of its owners, (iii) collects consumers’ personal information and determines the purpose and means of processing such information, and (iv) satisfies at least one of the following three conditions:
* Has an annual gross revenue of over $25 million
* Alone or in combination, annually buys, receives, sells or shares for commercial purposes the personal information of $50,000 or more consumers, households or devices, or
* Derives 50% or more of its annual revenues from selling consumers’ personal information
The California law will force companies meeting the minimum size threshold to be transparent about how they use consumer data. These companies will have to obtain permission before using targeting ads based on personal information that they’ve received, such as a person’s job, education, or the websites and apps used by the person.
Many companies that use or gather consumer data, from retailers to cellular network providers to internet companies, have at least some California customers. Companies large enough to be subject to the new law must bring their systems and websites into compliance, and ensure that their processes are robust enough to take action in response to consumer inquiries and requests.
People that cannot afford to retain an attorney, or don’t wish to pay substantial attorneys’ fees, sometimes ask lawyers whether they can help with drafting court papers or with preparing a court argument, for the unrepresented party to then present himself or herself in court. While the person making the inquiry may not realize it, this presents a number of ethical concerns for the attorney, and for the legal system. The so-called “ghostwriting” of court papers by attorneys on behalf of pro se litigants has received increasing attention in recent years, and some observers see it as a partial solution to the high cost of legal services. The Journal of the American Bar Association published an article this month suggesting that some jurisdictions have become more accepting of the practice. The fact remains, however, that most jurisdictions in the United States take a dim view of attorneys ghostwriting court papers for non-lawyer litigants.
The state bar for each state creates ethical rules that bind attorneys practicing in that state, and these ethical rules vary on issues of ghostwriting and the “unbundling” of legal services. Different court systems also may have their own rules regarding the practice. The Federal court system, for example, has a well-established hostility to ghostwriting by attorneys. In Federal court practice, anonymous drafting of pleadings by attorneys for pro se litigants, without the attorney signing the pleadings, can result in suspension or disbarment from practice before the court. Almost ten years ago, the American Bar Association published a formal ethics opinion approving the practice, however. This ABA opinion is not binding on state bar associations, though, and the state authorities that actually regulate the profession generally have been far less open to the practice.
The term “ghostwriting” refers to an attorney representing a pro se litigant, informally or otherwise, and preparing pleadings, motions, or briefs for the litigant that the assisting lawyer does not sign. The Federal courts have expressed great concern about this practice because the attorney seeks to remain anonymous and therefore potentially outside the professional, ethical, and substantive obligations that are imposed on members of the bar when they sign a court pleading. Courts can view this as a deliberate evasion of the attorney’s ethical obligation to the court. When an attorney signs a court submission, he or she is thereby representing to the court that there are grounds to support the assertions made in the submitted paper. The practice of ghostwriting frustrates this obligation by keeping the identity of the attorney who drafted the paper anonymously. In addition, courts often give liberal interpretation to papers filed by self-represented parties, and allowing pro se litigant to benefit from this latitude while actually receiving counsel from an attorney is a disadvantage to an opposing party that may not have the benefit of a ghostwriting. Some courts have also viewed ghostwriting as a misrepresentation by the attorney, which violates an attorney’s professional responsibility to be candid with the court.
Several years ago, Maryland court rules were amended to expressly permit attorneys and clients to contractually agree to a “limited appearance” by the attorney. In a limited appearance, the attorney agrees to appear in a court proceeding for the client only for a limited, well-defined aspect of the case. For example, a client could retain an attorney to represent the client only in the child support aspect of a family law action, but not in the property aspects of the divorce proceeding. The limited appearance must be for a discrete matter or judicial proceeding, and the notice of appearance filed with the court must be accompanied by an Acknowledgment of Scope of Limited Representation signed by the client, specifying the scope of the limited appearance. This rule does not condone ghostwriting by attorneys in Maryland state courts, but it has moved the Maryland bar some distance down the road toward acceptance of unbundled legal services.
A limited liability company (LLC) is a “pass-through” entity for tax purposes, once properly registered with the IRS, and is the preferred form of business entity for many small and mid-size companies.
Forming an LLC in Maryland is a straightforward process. A person authorized to do so by those persons forming an LLC files signed articles of organization with the Maryland Department of Assessments and Taxation (SDAT). Articles of organization in Maryland need only contain the name of the new LLC, the address of its principal office in Maryland, and the name and address of its resident agent. Articles of organization may also include other provisions, as long as they are not inconsistent with law. For example, articles of organization can provide that the authority of individual members to act for the LLC, solely by virtue of their being members of the LLC, is limited.
Although establishing a Maryland LLC by the filing of articles of organization is relatively easy, one of the advantages of using the LLC form of business entity is flexibility in structuring governance of the entity. The “ground rules” for operating a particular LLC are set forth in the LLC’s operating agreement – a document that plays a role similar to that of bylaws for a corporation. Maryland law does not even require an LLC to have an operating agreement, but any LLC having more than a single member should have a well-drafted and thoroughly considered operating agreement. (In some cases, single-member LLCs should have a written operating agreement, as well). Working with an experienced attorney to draft the right operating agreement for an LLC is a sound investment. Lawyers that have practiced in this area for any length of time will have stories of inadequate operating agreements that clients pulled together informally, or using ill-fitting examples found on the internet, to the later regret of the LLC’s members. Creating a solid, written operating agreement for an LLC, especially at or near the time of its formation, can head off a lot of problems later.
The subjects that can be covered in a written operating agreement are too numerous to be addressed in this article, but one significant matter to be included in an operating agreement for a multi-member LLC is the designation and powers of a “manager” for the LLC. Unless otherwise provided in an operating agreement, each member of a Maryland LLC would have the power to bind the LLC in the ordinary conduct of its business. Unless the articles of organization place limits on the authority of members to act for the LLC, each member of a Maryland LLC has apparent authority to execute any document in the name of the LLC. Instead of operating under these default arrangements, members of a Maryland LLC will wish to clearly designate, in a written operating agreement, who is to serve as the manager of the LLC and provide clear delineation of the manager’s authority to act for the LLC, along with the limits on that authority.
Unlike LLC statutes in other states, the Maryland LLC Act does not use the term “manager.” The Act does not establish statutory duties or a standard of care for members, managers, or other agents of a Maryland LLC, but court decisions during the past ten years suggest that a manager of a Maryland LLC owes the LLC, and its members, the common law duties of an agent. Courts have further suggested that this imposition, by default, of agency liability on managers can be altered or expanded by the LLC’s operating agreement. Another reason to have a written operating agreement, therefore, is to expand, alter, or clarify the manager’s duties to other members.
There are many good reasons for early-stage and other companies to seriously consider choosing an LLC as a legal entity. Forming an LLC in Maryland is relatively easy, but thinking through whether the company should have a written operating agreement, and the terms of any operating agreement, is an exercise in which an experienced business attorney will add real value.
At the end of its session this month, the Maryland Legislature approved $5 Million in tax credits for those small businesses that provide benefits under the Mandatory Paid Sick Leave Law to employees earning less than earn 250% of the annual federal poverty guideline. A small business may receive a tax credit equal to the lesser of $500 for each qualified employee, or the total amount of paid time off provided in accordance with the Paid Leave Compromise Act (SB 135/HB 98 of 2018) to qualified employees. Only businesses with 14 or fewer employees are eligible for this credit. The credit is to be provided on a first-come-first-credited basis until the $5 Million aggregate credit amount is reached. If signed by Governor Hogan as expected, this law will take effect on July 1, 2018, but will apply retroactively to the entire 2018 tax year.
The Maryland Department of Labor, Licensing and Regulation (DLLR) updated its official FAQs on March 9, 2018, to guide Maryland employers in implementing the Maryland Healthy Working Families Act (the so-called “Paid Leave Law”). Since February 11, 2018, Maryland employers have been required to provide “sick and safe” leave benefits to their employees under this new law. Companies with 15 or more employees must provide paid leave to their employees. Companies with fewer than 15 employees need only provide unpaid leave.
The new DLLR publication provides guidance on the calculation of the 15-employee threshold, sick and safe leave accrual and tracking requirements, permissible uses of earned sick and safe leave, employer verification of sick and safe leave used, rehire requirements, and specific categories of employees. Here are a few of the new items clarified in the DLLR publication:
Does an employee need to give prior notice to the employer before using sick and safe leave?
DLLR says that, if the need for sick and safe leave is foreseeable, an employer may require its employees to provide up to seven days of notice before taking leave. If the need to use leave is not foreseeable, the employee must provide notice as soon as possible.
Can an employer designate different methods of accruing sick and safe leave for different types of employees?
Yes. DLLR says that “an employer could front-load leave to full-time employees but provide that part-time employees earn leave on an accrual basis.” DLLR recommends that such a policy is in writing and clearly communicated to all employees. Such a policy must be applied consistently with regard to each type of employee.
Do paid holidays count toward earned sick and safe leave? Can an employee accrue earned sick and safe leave while using PTO?
The new guidance directs that an employer cannot deduct holiday hours from an employee’s earned sick and safe leave if the employer’s business does not operate on those holidays, and the employer provides paid time off for those holidays. If an employer’s business operates on holidays and employees work or are expected to work on holidays, however, the employer may deduct from the employee’s accrued sick and safe leave if the employee takes a leave day and does not work on the holiday. The law does not require that an employee accrue sick and safe leave while using paid time off.
What happens in weeks where an employee occasionally works less than 12 hours in a week?
An employee that normally or customarily works less than 12 hours a week is not covered by the law. However, if an employee customarily works 12 or more hours per week but on an isolated week works less than 12 hours, those hours would still count toward the employee’s sick and safe leave.
How does an employer handle the accrual of earned sick and safe leave if the employer advances the leave time at the beginning of the year and the employee is not hired at the beginning of the designated benefit year?
If an employer advances sick and safe leave time on January 1st and an employee is hired later during the year, the employer must ensure that the employee earns sick and safe leave in an amount equal to or greater than the leave provided for under the earned sick and safe leave law, until the beginning of the next benefit year.
Does earned sick and safe leave count toward the fringe benefit amount on a Maryland prevailing wage project?
DLLR says that paid sick and safe leave may be credited toward the fringe benefit requirement on a Maryland Prevailing Wage project.
What pay rate should an employee working on a Maryland Prevailing Wage project be compensated when using earned sick and safe leave?
DLLR says that earned sick and safe leave should be compensated at an employee’s standard rate of pay, at the same rate the employer compensates employees for other paid fringe benefits
Most Maryland employers will be required, beginning sometime during the first half of 2018, to provide sick leave to their employees. It’s not entirely clear when this requirement will kick in. Mandatory employee sick leave was enacted by the Maryland Legislature last year but was vetoed by Governor Hogan. The Governor’s veto was overridden by the Legislature, on January 12, 2018. With this veto override, the law is presently scheduled to go into effect on February 11, 2018 (30 days after the override vote).
The main sponsor of the legislation has introduced emergency legislation that would delay implementation of the law for an additional 60 days, to mid-April. Many members wish to allow more time for the Hogan administration to draft implementing rules and regulations. Some Republican members of the Legislature have called for implementation to be delayed further, until July 2018. Unless the Legislature passes emergency legislation before the end of this year’s three-month legislative session, however, Maryland employers will have to provide the required sick leave benefits starting on February 11, 2018. Based on information published by the Legislature, here is a summary of what the law will require, once it goes into effect:
Which employers will be required to provide sick leave?
- Maryland employers with 15 or more employees must provide paid sick leave.
- Maryland employers with fewer than 15 employees also must provide sick leave, but for these employers, the leave may be unpaid.
- To determine the number of employees for these purposes, the law looks to the average monthly number of persons employed during the prior twelve months, including full-time, part-time, temporary, and seasonal employees.
- The following classes of employees are not covered:
- Employees that regularly work fewer than 12 hours a week.
- Construction industry employees who are covered by a collective bargaining agreement that expressly waives the right to leave under this Act.
- Employees that work on an as-needed basis in the health or human services fields, to the extent they (1) can reject a shift offered by the employer, (2) are not guaranteed work by the employer, and (3) are not employed by a temporary staffing agency.
- Independent contractors
- Licensed real estate salespersons or brokers, or those affiliated with a licensed broker by a written agreement, who are paid solely on commission, and who qualify as independent contractors for federal tax purposes.
- Employees that were under the age of 18 before the beginning of the year.
- Agricultural employees processing crops or working for a farmer in the production, harvesting or marketing of the product.
- Temporary staffing agency employees, if the agency does not have day-to-day control over their work assignments and supervision.
- Employment agency employees providing part-time or temporary services to another person.
How does sick leave accrue?
- Sick leave must accrue at a rate of at least 1 hour for every 30 hours worked.
- Exempt employees are assumed to work 40 hours in a workweek unless they are regularly scheduled for fewer hours, in which case their regularly scheduled hours are used.
- Tipped employees receiving paid leave must be compensated at the minimum wage rate, which will be $9.25 at the time that the law becomes effective.
- An employer may choose any 12-month period to constitute a “year” for purposes of accruing leave under the Act.
- The amount of leave that may be earned per year is capped at 40 hours (five 8-hour days).
- The total amount of leave that may be accrued (including carryover, as discussed below) may be capped at 64 hours (eight 8-hour days).
- The total amount of leave that may be used by an employee may be capped at 64 hours per year.
- An employer is not required to allow accrual of leave: (1) during a two-week pay period in which the employee worked fewer than 24 hours; (2) during a one-week pay period in which the employee worked fewer than 24 hours in the current and immediately preceding pay period; or (2) during a semi-monthly pay period in which the employee worked fewer than 26 hours.
- An employee starts accruing sick leave immediately upon hire, but an employer may prohibit the use of leave during the initial 106 calendar days of employment.
Does sick leave carry over from year to year?
- Employers are allowed to make available to employees the full annual allotment of leave at the beginning of the year. If an employer does so, then it is not required to permit carry-over from year to year
- If an employer does not make the full annual allotment available at the beginning of the year, however, the employer must permit carryover of the balance of any unused leave to the next year, up to a maximum of 40 hours.
May an employee use his or her sick leave to care for family members?
- Yes, and there is a broad definition of family members for these purposes, including:
- Child, including biological, foster, adopted, or step, as well as one for whom the employee has legal or physical custody or guardianship, or stands in loco parentis (i.e. acts as the parent, regardless of the legal relationship).
- Parent, including biological, foster, adopted, or step for the employee or the employee’s spouse, as well as one who was the legal guardian of or stood in loco parentis to the employee or employee’s spouse.
- Grandparent, including biological, foster, adopted, or step, of the employee.
- Grandchild, including biological, foster, adopted, or step, of the employee.
- Sibling, including biological, foster, adopted, or step, of the employee.
May an employee use leave before it has accrued?
- An employer may, but is not required to, permit an employee to “borrow” leave that has not yet been accrued.
- If the employee terminates employment before the borrowed leave has been accrued (and therefore paid back), the employer may deduct the advanced amount of leave from the employee’s final paycheck only where there is a written, signed authorization by the employee to allow the employer to do so.
- If an employee is rehired within 37 weeks, the employer must reinstate the bank of unused leave unless it was paid out upon termination.
- If an employer acquires another company and retains employees from that company, the employees retain the leave accrued under the prior company.
Does an employee receive payment for accrued but unused sick leave, at the end of employment?
- An employer is not required to pay out accrued but unused leave upon termination of employment.
Does an employee need to give prior notice to the employer, before using sick leave?
- If the need for sick leave is foreseeable, an employer may require its employees to provide up to seven days of notice before taking leave.
- If the need is not foreseeable, the employee must provide notice of the need for such leave as soon as practicable, and must comply with the employer’s notice requirements for absences, as long as those requirements do not interfere with the ability to use leave.
- The employer may deny the use of leave if the employee fails to provide the required notice, and the absence will cause a disruption.
- An employer is not allowed to require an employee to look for or find a replacement worker, as a prerequisite to taking sick leave.
Can an employer require proof of proper use of sick leave?
- Yes. An employer may request verification of the appropriate use of leave if an employee uses more than two consecutive scheduled shifts of leave.
- Verification may also be required if the employee uses leave between the 107th through 120th calendar days after beginning employment, on terms that the employee agreed to at the time of hire.
- If the employee fails to provide the verification, subsequent requests to take leave for the same reason may be denied.
Are their record-keeping requirements?
- Of course, there are! Each time wages are paid, an employer must provide a written statement of available leave. This requirement may be satisfied through an electronic system where the employee can access their leave balances.
- Employers must maintain records, for at least three years, of leave accrued and used by each employee. Failure to keep these records creates a rebuttable presumption that the employer has violated the Act. These records must be available for inspection by the DLLR.
It’s important for all Maryland employers to examine their leave policies before the present effective date of the law (February 11, 2018) to ensure compliance. After the law goes into effect, employees will have the right to file complaints about violation of the law with the commissioner of the DLLR.
This summary is not legal advice, and should not be used for this purpose. Please contact the Law Office of Steven J. Lewicky with any questions about these new requirements.
Supreme Court hears arguments on whether employers can require employees to waive right to class action lawsuits, and mandate arbitration of disputes
On the first day of its term earlier this month, the Supreme Court took up the very important question of whether employers may require, in employment contracts, that any controversy between the employer and its employees be decided through arbitration, instead of in court. Employers have increasingly been including in written employment contracts a requirement that employees arbitrate any disputes with the company individually, and waive their rights to resolve disputes through class action lawsuits.
This exposes a tension between federal laws — the Federal Arbitration Act on the one hand, and the National Labor Relations Act, which guarantees employees a right to engage in “concerted activities” for “mutual aid or protection.” In the pending cases before the Supreme Court, employers have argued that the Federal Arbitration Act is unequivocal and that contractual arbitration provisions must be enforced. The employers also argue that the National Labor Relations Act does not expressly prohibit waivers of class action lawsuits. The employees in these pending cases and the National Labor Relations Board, however, argue that there is no need for the justices to harmonize the National Labor Relations Act and the Federal Arbitration Act because arbitration agreements cannot be enforced by courts when they are illegal. They argue that the National Labor Relations Act’s reference to the right of employees to engage in “concerted activities” for “mutual aid or protection” has long been interpreted by courts to include the right of employees to pursue joint legal claims, which should include class action lawsuits. Contractual limits on asserting class-action lawsuits, therefore, should be seen as illegal and unenforceable. Twenty-eight amicus curia briefs were filed by non-parties in these cases, suggesting how important this issue is to both employers and employees.
Amy L. Howe of SCOTUSblog.com reports that, during the Supreme Court’s oral arguments on October 2, a majority of the justices appeared inclined to come down on the side of employers, and uphold employment agreements that require an employee to resolve a dispute through individual arbitration, waiving class action lawsuits. Chief Justice Roberts, in a back-and-forth with a law professor representing one of the employees in the case, observed that a decision in favor of the employees would invalidate employment agreements covering 25 million people – a step that several of the justices would be reluctant to take, particularly given the court’s strong support of arbitration in recent years. Justice Breyer, on the other hand, told an attorney representing employers that he did not see a path for the employers to win without “undermining and changing radically” the labor laws that are the “entire heart of the New Deal.” An attorney representing employers was pressed repeatedly by the court’s four more liberal justices to explain how the employers’ position could be reconciled with the National Labor Relations Act, but the attorney argued that the NLRA was only intended to protect collective action in the workplace, and to allow employees to get to a forum in which to raise their grievances with employers. Once an employee arrives at that forum, the attorney argued, the employer can raise any defenses that it may have, such as the fact that the employee had agreed to arbitrate any disputes individually. Justice Kagan pointed out that another federal statute, the Norris-La Guardia Act, in her view bars courts from enforcing any waiver of an employee’s right to concerted activity.
The U.S. Government initially filed a brief with the National Labor Relations Board asking the justices to review these cases, but with the change of administrations, the Government thereafter sided with the employers in briefs and argument. Based on questioning during argument, Ms. Howe of SCOTUSblog believes that employers can be assured of the votes of Justices Roberts, Kennedy and Alito, but the two remaining conservative justices – Thomas and Gorsuch – were silent during oral argument and gave no indication of their thinking. Justice Thomas has voted in favor of a broader reading of the Federal Arbitration Act, however, and Justice Gorsuch generally interpreted arbitration clauses broadly while he was a judge prior to appointment to the Supreme Court. Both sides now wait with anticipation for the Supreme Court’s ruling, which will probably be handed down next spring.
More details of the briefs and oral arguments in these cases may be read at SCOTUSblog.
Local government ordered to pay attorneys’ fees for failing to adequately respond to request for access to public records
The town of Chevy Chase, Maryland, was recently ordered to pay $92,000 in attorneys’ fees to parties that sued the town seeking access to public records under the Maryland Public Information Act (“MPIA”). This litigation demonstrates both the breadth of public access rights under the MPIA and the danger to political subdivisions of being hostile to such requests.
The controversial Purple Line light rail system planned for the Maryland suburbs of Washington, if constructed, will extend from Bethesda to New Carrolton. Plans call for part of the Purple Line to run along a former railroad right-of-way through Chevy Chase, along what is now the Capital Crescent Trail. Local groups have organized in opposition to the project, and the Town of Chevy Chase has been active in opposition. As part of its opposition to the construction of the Purple Line, the town retained the law firm of Sidley Austin to review the Maryland Transit Administration’s Draft Environmental Impact Statement. The town thereafter also retained another law firm, which in turn contracted with two lobbying firms. In early 2014, the Washington Post and other news organizations published articles about the town’s relationship with these firms, and fees the town paid for these services. After reading these articles, an organization that supports public transportation, along with a local blogger, sought access to town records pertaining to the town’s relationship with the firms under the MPIA. For some of these MPIA requests, they requested a fee waiver under the Act. The town denied this waiver of fees.
The MPIA was enacted in 1970, four years after Congress enacted the federal Freedom of Information Act. Its principal purpose is to provide the public a right to inspect records of state or local governments. The Act states that it is to be construed in favor of allowing inspection of public records, with the least cost and least delay to the person that requests the inspection. Under the Act, the government entity that is the custodian of a record is ordinarily entitled to charge a reasonable fee to cover its costs in searching and compiling records. The government may not charge a fee for the first two hours that are needed to search public records in response to a request, however, and it may waive all fees if the applicant and is indigent, or if the government determines that a waiver would be in the public interest.
In early 2015, the blogger and the organization filed a complaint in the Circuit Court for Montgomery County, challenging the town’s denial of their fee waiver requests. The town argued that the organization and the blogger had a prior “history of attacks on the town,” and that previous requests by the organization and the blogger “demonstrated that Plaintiffs sought the fee waiver for their own personal interests in retaliating against the town for its opposition to the Purple Line project.” The town further alleged that they had “engaged in a smear campaign…to retaliate against the town for its position on the proposed Purple Line project.” The Circuit Court ruled in favor of the town and rejected the challenge to the town’s denial of the fee request. The organization and the blogger appealed.
In a decision handed down in September 2016 (Action Committee for Transit v. Town of Chevy Chase), the Maryland Court of Special Appeals overturned the decision of the Circuit Court, ruling that when presented with a waiver request, a government custodian of records must consider the ability of the applicant to pay the fee, and other relevant factors, in deciding whether the fee waiver would be in the public interest. On appeal from a denial of such a request, the appellate court needs to have sufficient information to satisfy it that the government custodian’s decision was not arbitrary and capricious. In this case, the town informed the applicants of its denial of the fee request without providing any explanation for the basis of its denial. The appellate court found that this type of a bald and conclusory statement provides no insight into the actual considerations that motivated the town to deny the request, thereby preventing the appellate court from adequately considering the actual decision-making process followed, and considering whether the custodian gave appropriate consideration to all factors that it was required to consider under the statute. Even though the town failed to set forth its reasoning in its written denial, the court held that the town still could have done so before the Circuit Court, but its submissions to the court also did not satisfy its burden. Based on the town’s submissions to the Circuit Court, the appellate court found that a significant factor, if not the primary factor, in the town’s decision to deny the fee waiver was that the applicants previously criticized town officials for their opposition to the Purple Line. The appellate court found that the First Amendment’s guarantee of free expression of speech protects persons from the imposition of financial burdens based upon the content of their speech. Therefore, a government custodian cannot deny a fee waiver request under the MPIA simply because the government is upset that the requesters made life difficult for town officials, or because the officials would have preferred the requesters not oppose government policies.
The appellate court remanded the case back to the Circuit Court, with instructions that the court direct the town to respond to the information requests without charge to the requestors, and further directing the Circuit Court to reconsider the request for attorneys’ fees under MPIA. On remand, the Circuit Court in September 2017 awarded the organization and the blogger $92,000 in attorneys’ fees, which was less than the total amount of attorneys’ fees incurred.
The case is interesting because the appellate court took what appears to be a broad statutory grant of discretion to government officials in determining whether a fee waiver is in the public interest, and limited that discretion by requiring the government to clearly articulate reasons for denial of a fee request. The articulated reasons must be unrelated to the content of the applicant’s motivation in asking for access to public records. The 2016 Court of Special Appeals opinion provides guidance to government officials on how to properly support a denial of a fee request, but it also articulates a clear bias toward allowing public access to government records, and toward waiving fees if the request can be seen as supporting a public interest. The subsequent award of $92,000 by the Circuit Court illustrates the perils of local governments failing to be cooperative in responding to public record access requests.
Maryland appeals court clarifies when an employee expressing fear of being harmed by a co-worker is protected from being held liable for defamation
We often hear of situations in which an employee is feared by others to pose a threat to co-workers in a workplace. It is not uncommon for HR directors to learn of employees’ concern about perceived threats posed by a co-worker. In July 2017, the Maryland Court of Special Appeals issued a decision addressing the complex legal questions that arise when one employee tells another that he or she has safety concerns about a co-worker.
In Lindenmuth v. McCreer, the plaintiff was employed as a mechanic, and the defendant was the lead mechanic in the same shop, with supervisory authority over Lindenmuth’s work. Lindenmuth’s manager and supervisors brought several performance mistakes to Lindenmuth’s attention. His manager advised him to take time off from work due to his stress level. Another mechanic in the same shop heard rumors from co-workers that Lindenmuth was going to return to work, and had a concealed carry firearms permit. He expressed concern to the defendant that Lindenmuth was going to shoot someone at work upon his return. It was common knowledge within the mechanic shop that Lindenmuth owned firearms, and that he had a concealed carry permit. Defendant McCreer went to company management and relayed the employee’s concerns about Lindenmuth, and described prior conversations in which employees alleged that Lindenmuth described wanting to commit violent acts, including the shooting of police officers. Lindenmuth thereafter returned to work and saw that his photograph had been placed in the guard shack, with a note indicating that he was not allowed access to the facility.
Lindenmuth filed a lawsuit for defamation, “invasion of privacy-unreasonable publicity given to private life,” “invasion of privacy-false light,” and intentional infliction of emotional distress. During the course of the litigation process prior to trial, the trial court granted summary judgment in favor of the defendant, finding that Lindenmuth had not brought forth facts sufficient to allow him to prevail at trial, even if all facts were as he alleged them to be. On appeal, the Court of Special Appeals provided a detailed analysis of the evidence that a plaintiff needs to bring forward to state an actionable claim under each of the causes of action asserted by Lindenmuth. The appellate court upheld the trial court and found that Lindenmuth could not prevail on the facts brought forth in the litigation discovery process.
Defamation is often more difficult to prove than is generally understood by the public. Under Maryland law, it is not sufficient to simply show that a false statement was made about someone. To establish an actionable claim for defamation, a plaintiff must allege and show that: (1) the defendant made a defamatory statement to a third person, (2) the statement was false, (3) the defendant was legally at fault in making the statement, and (4) the plaintiff suffered harm as a result of the statement. A defamatory statement is one which tends to expose a person to public scorn, hatred, contempt or ridicule, thereby discouraging others in the community from having a good opinion of, or from associating or dealing with, that person. It is the plaintiff’s burden to prove that a particular statement at issue was false.
If a plaintiff meets his or her burden of proving all the above elements, the defendant can escape liability if he or she proves that a recognized privilege existed at the time of the statement, which excused the defamatory statement. A privilege allows a person to make a defamatory statement in furtherance of some interest of social importance that is entitled to protection. Some privileges are absolute, and others are qualified. A qualified privilege (also known as a conditional privilege) may defeat a claim of defamation as long as the defendant did not abuse the privilege. Maryland courts have recognized four common-law privileges against defamation: (1) a “public interest” privilege to publish material to public officers on matters within their public responsibility, (2) a privilege to publish to someone who shares a common interest, or to publish in defense of oneself or in the interest of others, (3) a “fair comment” privilege, and (4) a privilege to make a fair and accurate report of public proceedings.
The court found that Lindenmuth’s defamation claim had to fail because he could not demonstrate that McCreer’s statements were false. It was undisputed by the parties that McCreer accurately relayed to his supervisor what a co-worker told him about Lindenmuth. There appears not to have been a dispute over whether the employee was concerned about Lindenmuth coming to the workplace to shoot someone, or over whether this employee shared his concerns with McCreer. Without evidence that McCreer’s statements were false, the defamation claim could not succeed.
In a more interesting part of the decision, the court went on to opine that, even if Lindenmuth could have proven all four elements of his defamation claim, the defendant still would not have been liable if he established that a privilege applied – and the appellate court agreed with the trial court that a conditional privilege would have been applicable here. Specifically, the court found that McCreer’s statements to management were protected by the common interest privilege because they were made in furtherance of the common interests shared among McCreer and other employees. The communication between McCreer and management arose out of the employer-employee relationship, between people engaged in a common enterprise or activity. The court found that a supervisory employee has an interest in the safety of other employees as well as himself, and McCreer shared this interest with the person to whom he spoke. The court provided a detailed explanation of the standard of proof necessary to show that a qualified privilege has been abused, and found that no facts were present in this case from which a court could find that abuse negated the conditional privilege.
The court also discussed the elements of the two invasions of privacy torts and of the intentional infliction of emotional distress claim and found that the trial court did not err in ruling against the plaintiff on these claims, either.
The Lindenmuth decision gives some comfort to companies wrestling with how to address employee concerns about personal safety and provides further clarity on what must be established by a plaintiff, under Maryland law, to successfully assert a defamation claim or a privacy tort claim when the statements in question relate to workplace safety.
For assistance with claims asserted by employees or former employees against companies or co-workers for defamation or invasion of privacy, contact the Law Office of Steven J. Lewicky.
Maryland condominium associations may not use condominium amenities to enforce condominium assessment payment
The Maryland Court of Appeals issued a decision on June 23, 2017, discussing the extent to which a condominium association may impose restrictions on a unit owner’s right to access common amenities of the condominium. In Elvation Towne Condominium Regime II, Inc. v. Rose, the court looked at a condominium association with a “suspension-of-privileges” rule, by which the association prohibited unit owners from parking overnight on the property or using the pool during periods when the owner was delinquent in paying condominium fees. The unit owners bringing this case were alleged to be in arrears in making require payments of assessments, so the association not only sued the owners for the amount owed in the District Court of Maryland but also barred them from overnight parking or use of the pool. The owners brought their own suit against the condominium association in Circuit Court, seeking a declaratory judgment striking down the prohibition against the use of common amenities.
The Court of Appeals held that a Maryland condominium association may restrict access to common areas and amenities as a means to enforce payment of condominium fees, but only if this enforcement mechanism is expressly provided for in the condominium’s declaration. This was not the case here, because the action was taken based only on a rule enacted by the condominium’s board. Therefore, the court would not allow this enforcement mechanism against these particular owners.
In making this decision, the court wrestled with whether a “suspension-of-privileges” rule constitutes a taking of property, requiring more than a rule-making under the Maryland Condominium Act. The court held that, when a rule disparately affects a portion of unit owners by revoking a property interest they acquired when they purchased their units, without affecting the rights of other unit owners, there is a taking of property. The court went on to find that restricting a condominium owner’s access to the community-held property is a significant infringement of the owner’s property rights, which may only be authorized by a provision in the condominium’s declaration, and not be a rulemaking.