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Revamped Anti-Discrimination Law Likely to Impact Maryland Businesses

Lerch, Early & Brewer's Legal Update

In a development which is likely to affect Maryland employers statewide, the Maryland legislature has recently altered Article 49B, the principal anti-discrimination law of Maryland. The new legislation, which took effect on October 1, 2007, will likely substantially increase the number of employment discrimination lawsuits filed in Maryland state courts and significantly increase the potential exposure of Maryland employers to damages.

Until this new legislation, the only state-level remedy for employment discrimination claims existed through the Maryland Human Relations Commission (MHRC), and that remedy was decidedly limited. Assuming the MHRC found sufficient grounds for a complaint, employees were limited to a hearing before an Administrative Law Judge and an award of up to three years of back pay. As a result, few individuals proceeded under this state law remedy, electing instead to file claims in federal courts under Title VII.

Potential for Significantly Increased Damages

The new law creates two paths for employees to file discrimination claims. Individuals may continue to pursue their claims through the MHRC with the potential for substantially higher relief than before – up to $300,000 in compensatory and punitive damages, plus attorney’s fees and expert witness fees. (Compensatory damages include any non-monetary losses such as inconvenience and mental anguish, and are in addition to back pay and interest, which may also be recovered.) Alternatively, an individual may elect to request a jury trial in Circuit Court 180 days after the filing of a complaint with the MHRC, regardless of the results of the MHRC’s investigation. For all practical purposes, this means that employees can opt out of the administrative process. Here, too, awards of up to $300,000 in compensatory and punitive damages are available.

New Types of Discrimination: Marital Status, Family Status, Sexual Orientation

Significantly, the new legislation also expands the types of discrimination claims that individuals may assert against employers. The amendments to Article 49B add three new classifications of protected employees--marital status, family status and sexual orientation--which are not protected classifications under federal law.

For years, the federal courts in the Fourth Circuit (which includes Maryland and Virginia) have been regarded as “pro-employer,” and more likely than state courts to grant summary judgment, thus preventing claimants from getting their claims before a jury. In addition, state court judges have been generally less familiar with employment discrimination claims than federal judges. All of these factors, as well as a relative lack of settled employment law in the Maryland state system, almost certainly will result in a significant increase in claims being filed in the state court system, instead of federal court. The full impact of the new legislation remains to be seen; however, some preliminary conclusions can be drawn. As previously mentioned, there will likely be a rise in employment claims filed in Maryland circuit courts. Second, the decision of whether or not to consider mediation at the inception of the dispute -- regardless of whether a lawsuit is filed -- will become highly important. Should a case proceed to trial, it is possible that defenses previously used by employers to refute discrimination claims in federal cases may no longer be available. Finally, employers will need to be prepared to try cases involving allegations of employment discrimination; this is true for several reasons, including the fact that state court judges, unlike federal judges, are presently not as vigorous in pushing litigants to mediate.

Measures to Minimize Filing of Claims

The new amendments to Article 49B will no doubt usher in new levels of concern for employers and those who are responsible for working with employees. There are, however, effective measures that employers can take both to understand the new law and to minimize the filing of claims:

  • Carefully review and, if necessary, revise employment policies and procedures.
  • Commit to regular training of all employees on sexual harassment and other forms of discrimination.
  • Provide regular training to managers on a variety of employment issues, including how to deal with claims of mistreatment by employees.
  • Train managers to work effectively with employees and to document employment issues.
  • Train managers and human resource professionals on how to properly investigate claims of wrongdoing or discrimination.
  • Continually remind managers of the need to prepare and maintain documentation to support employment decisions.
  • Inform managers of updates in the employment laws and key court cases involving employment discrimination.
  • Exercise special care in evaluating decisions concerning both promotions and terminations and other adverse employment actions for consistency, fairness and compliance with applicable law.
  • Consider adopting an alternative dispute resolution program which includes mediation.

Employers who commit to these proactive steps will be best positioned to prevent employment claims from being filed in the first instance and, if filed, to successfully defend against them—even in today’s uncertain climate.

Marc R. Engel is a principal in the firm’s Employment and Labor and Litigation groups. He can be reached at 301-657-0184, or via e-mail at mrengel@lerchearly.com.

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