Maryland Bar Bulletin
Publications : Bar Bulletin : January 2010

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 BAR BULLETIN FOCUS: LABOR/EMPLOYMENT LAW  

For people who lose their jobs through no fault of their own, the promise of unemployment benefits can be a critical financial – and psychological – link between their former job and future employment. The state-provided benefit can make the difference between their ability to pay rent or face eviction or to make car payments or face repossession. Yet, Maryland’s unemployment laws frequently penalize people who most need benefits in subtle and not-so-subtle ways. In view of the soaring numbers of persons filing for unemployment benefits in Maryland as a result of the recession, this article sets forth several suggestions for reducing the underlying inequities in Maryland’s unemployment laws.

The unfairness begins at the beginning – when a claimant applies for unemployment benefits. Most people assume that if they have been laid off from their job or terminated without cause they will automatically qualify for unemployment benefits. Not true. The problem arises where the claimant voluntarily quit their previous job to take a better job, from which they were fired or laid off. Even though the claimant may have made a completely logical and responsible decision, accepting a job with substantially higher pay, greater health benefits and more job responsibilities closer to home in a sensible and justifiable effort to better his or her life, the Court of Appeals of Maryland ruled in Total Audio-Visual Systems v. DLLR that such claimants should be punished for trying to improve their lives and are therefore disqualified from receiving unemployment benefits – even though the claimant’s subsequent employment was terminated through absolutely no fault of their own. Putting aside the fact that the decision runs directly contrary to the plain language of the statute, its legislative history and the remedial purpose of the unemployment laws, it is “manifestly unjust” and has had devastating results on persons who lost their jobs through no fault of their own.

The fundamental unfairness continues after the claimant is initially denied unemployment benefits. At that point, a claimant can file an appeal which is heard by a lower appeals hearing examiner in a de novo hearing. Employers are allowed to retain counsel to represent them at the hearings, and no limits are placed on their ability to hire attorneys to guide them through the process. However, claimants often find it difficult to find counsel to represent them in lower appeals hearings because Maryland’s rules deter attorneys from taking such cases. For example, attorneys representing claimants are severely limited in the amount of fees that they can charge claimants – only 150 percent of the claimant’s weekly benefit. No such limitations are placed on attorneys representing employers. For a claimant receiving the maximum weekly benefit, an attorney cannot charge more than approximately $600 to represent them at a hearing, even though the amount at issue may involve many thousands of dollars. For a claimant who receives a lower weekly benefit, the maximum fee that an attorney can charge would be even lower – sometimes only three- or four-hundred dollars. In addition, attorneys representing claimants must have their fees approved by the Department of Labor and Licensing – a burdensome requirement not imposed on employers’ attorneys. Of course, the ultimate effect of these regulations is to deter most attorneys from agreeing to represent claimants.

Finally, to add insult to injury, if the claimant was initially awarded unemployment benefits, and if the lower appeals hearing examiner reverses that decision and finds, for example, that the claimant should be disqualified from receiving benefits because the claimant quit a previous job to take a better job, the claimant can then be ordered to repay all the benefits paid to the claimant – often thousands of dollars. This is true even if neither the first employer nor the subsequent employer initially challenged the claimant’s right to receive benefits. The claimant has done absolutely nothing wrong, but is facing a devastating financial outcome. By trying to better their lives, they are now facing financial ruin at a time when they have no income and are dependent on receiving unemployment benefits.

These disincentives and penalties imposed by Maryland law, intentional or not, can be easily remedied by several minor changes to Maryland unemployment law. First, Maryland unemployment law should be changed to state that persons who leave their job for other employment offering better wages or working conditions will not be deemed to have left their prior employment without good cause where they lose their subsequent job through no fault of their own. Second, Maryland unemployment law should be revised so that claimants are treated the same as employers with regards to their ability to hire an attorney to represent them at appeals hearings. Finally, Maryland unemployment law should not require claimants to pay back benefits that they received erroneously through no fault of their own, particularly where the employer failed to initially challenge the claimant’s right to receive benefits. Ultimately, Maryland law should strive to treat claimants and employers equally and should not punish persons who are only trying to improve their lives by taking better jobs.

Andrew Dansicker is the principal of the Law Office of Andrew M. Dansicker in Hunt Valley, Maryland, a small law firm focusing on all aspects of employment law.

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Publications : Bar Bulletin: January 2010

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