by Lisa WhiteAre Federal Employee at a Fork in the Road? Know Your Rights.
Federal civil service employees, or career employees of the U.S. federal government, have the constitutional right not to be deprived of property without due process. In the employment context, this means civil service employees are entitled to an opportunity to respond prior to termination of employment decisions, and may resort to post-termination administrative proceedings to challenge an employment termination. Due process provides a government employee the right to notice, and a meaningful opportunity to be heard.
Prohibited Personnel Actions
A legal framework exists to ensure that no federal employee is removed from their job, suspended for more than 14 days, is reduced in pay or in grade, or is furloughed for 30 days or less — without 30 days’ notice from the agency and a reasonable time to respond to the notice. Adverse actions that do not comply with these requirements can be appealed to the Merit Systems Protection Board.
Discrimination
Federal employees cannot be discriminated against on the basis of race, color, religion, sex, national origin, age, disability, genetic information, pregnancy, or childbirth, nor retaliated against for engaging in a protected activity as defined in Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), the Equal Pay Act, or the Rehabilitation Act. Discrimination in employment based on a protection afforded under these statutes or others is appealable to the Equal Employment Opportunity Commission, subject to specific filing deadlines.
Federal employees have the right to appeal adverse personnel decisions or discriminatory actions taken against them by the Government. First, one must determine their status as an employee. Federal law defines an employee as an individual in the competitive civil service who is not in their probationary period, or who has completed one year of continuous service, or “an individual in the excepted service . . . who has completed 2 years of current continuous service in the same or similar positions in an Executive agency under other than a temporary appointment limited to 2 years or less.”
There are some instances where a probationary Federal employee can appeal a termination decision when a Federal government agency takes adverse action against them, but generally, probationary employees do not have the full protections that non-probationary federal employees have.
None of the information provided in this article constitutes legal advice. Every situation is different and should be thoroughly reviewed by and discussed with your legal advisors. Please do not rely on the contents of this article as the basis for making decisions regarding your particular situation. If you are facing an adverse Government employment action or employment discrimination, and reside in the State of Maryland, Lewicky, O’Connor, Hunt & Meiser stands ready to provide legal support to you.
by Lisa WhiteThe Appellate Court of Maryland Clarifies State Corporate Law in Mekhaya v. Eastland Food Corporation
The Appellate Court of Maryland, in its recent decision in Mekhaya v. Eastland Food Corporation, brought Maryland law in line with the corporate laws of other states, expanding shareholders’ rights. This case changed Maryland business law in several respects. Corporate shareholders now may assert some types of claims directly on their own behalf, even without a written agreement. The court in this decision also limited the “business judgment rule,” and addressed “de facto” dividends.
Clarification of Shareholders’ Rights
The Mekhaya decision is significant because it broadens shareholders’ rights to assert claims against a corporation. Prior to this decision, when addressing a dispute among shareholders, Maryland courts looked to the shareholders’ written agreement or their employment agreements to determine what rights are provided to the shareholder under the agreement. A shareholder was then able to assert a “shareholder derivative claim” on behalf of the corporation. If successful, such a suit would result in the corporation recovering monetary damages if the suit is successful (with the shareholder indirectly receiving benefit, in the role as a shareholder). In the Mekhaya case, however, the shareholders did not have a written shareholder agreement, so the court instead considered what it believed to be the reasonable expectations of the shareholders to determine if the particular shareholder asserting the claim had direct standing to sue the corporation, and to recover damages personally. As a result of this decision, shareholders in Maryland corporations can bring direct claims against a corporation in some situations, and potentially recover damages in their personal capacity. In the Mekhaya case, the shareholder was permitted to assert direct claims of shareholder oppression, breach of fiduciary duty, and unjust enrichment.
Limiting the Business Judgment Rule
The court’s opinion also held the business judgment rule inapplicable to direct claims of shareholders, if the shareholder can show a breach of fiduciary duty owed to the shareholder, and that the shareholder was personally harmed, even without showing an injury to the corporation. The court remanded the case for a determination as to whether the shareholder’s expectations were objectively reasonable.
“De Facto” Dividends
The court also acknowledged ambiguity in the states Corporations and Associations Code, and concluded that some distributions to shareholders may be considered “de facto” dividends, even if the payments are disguised as a large bonus, and not labeled as dividends. The Mekhaya court concluded that a payment to a shareholder might constitute a dividend, even when included as part of a shareholder’s salary as a corporate employee or director.
Lewicky, O’Connor, Hunt & Meiser can answer questions and provide legal guidance to businesses about their legal rights and obligations. We help companies prepare shareholder agreements to avoid future issues of legal interpretation. Please contact us at [email protected] or (410) 489-1996.
by Lisa WhiteA New Paid Family and Medical Leave Insurance Program Takes Effect in Maryland
A new law taking effect in Maryland this year requires many employers in the state to offer paid family and medical leave benefits to their employees. The Maryland General Assembly passed the Time to Care Act (SB 275) on April 9, 2022, but the law takes effect in 2023. This makes Maryland the tenth state in the nation to establish a paid family and medical leave insurance program. This law applies to employers with at least 15 employees, where at least one employee works in Maryland. It does not apply to businesses in which the owner is the sole employee, such as a single-member limited liability company, sole proprietorship, or a C or S corporation. Self-employed individuals may opt into the program. Employers and employees will begin making contributions to the program starting October 1, 2023, with payouts to employees beginning January 1, 2025. The Maryland Department of Labor (“MDOL”) will be responsible for administering and enforcing the program and will determine the rates of contributions by employers and employees by June 1, 2023.
The Maryland Time to Care Act provides up to twelve weeks of wage-replacement benefits from $50 to $1,000 per week to employees who have worked 680 hours in the last twelve months prior to the time the employee is requesting leave. The leave can be continuous or intermittent. The same employee may have up to an additional twelve weeks if the employee has a newborn and a serious health condition preventing the employee from performing the functions of the employee’s job.
Beginning in 2025, employees will be able to submit a claim for benefits and qualify for leave for any of the following reasons:
- Care for a newborn child, newly adopted child, foster care placement, or kinship care with the employee during the first year after the birth, adoption, or placement
- Care for a family member with a serious health condition
- Care for the employee’s own serious health condition
- Care for a service member with a serious health condition resulting from military service who is the employee’s next of kin
- If the employee has to attend to a “qualifying exigency” due to a family member’s military deployment
For employers, the Maryland Time to Care Act means additional payroll withholding and payout that businesses will want to factor into their future planning. Additional compliance issues may arise as well, as the law requires employers to provide proper notice to employees about the benefits, and specific payments into the program and eventually to employees requesting leave. Under the new law, the MDOL may investigate alleged violations of the law. Failure of employers to contribute to the program or to pay their employees may result in fines, back wages to the employee, court-assessed punitive damages, and payment of reasonable attorney’s fees.
Notice will be required by both employers and employees. Employees are required to notify their employer with written notice of their intention to take leave at least 30 days prior to taking the leave if the leave is foreseeable. If the leave is not foreseeable, then an employee needs to give their employer notice as soon as practicable and comply with the employer’s procedural requirements for requesting and reporting the leave. Employers are required to provide notice of the law’s rights to employees, and an employer must provide notice of eligibility to an employee within five business days of the employee’s request for leave.
As further guidance is released, Lewicky, O’Connor, Hunt & Meiser will be able to answer questions and provide legal guidance to businesses about their legal rights and obligations under the Maryland Time to Care Act. We can also assist those looking to form a new business to ensure legal compliance. Please contact us at [email protected] or (410) 489-1996.
