Employment Law Update

In this issue:

• Maryland Employers Are Prohibited From Requesting or Requiring Employees to Disclose Their Social Media Passwords
• New Law Limits Circumstances Under Which Employers Can Require Employees to Return to Work After Serving On Jury Duty
• Gender Identity Laws Pass in Baltimore and Howard Counties; Rejected by State
• Amendments to Maryland's Workplace Fraud Act Ease Burden on Employers
• New Law Creates a Limited Union-Employee Privilege

Maryland Employers Are Prohibited From Requesting or Requiring Employees to Disclose Their Social Media Passwords

Robert Collins, an employee with the Maryland Department of Public Safety and Correctional Services, took a leave of absence from his job at the Patuxent Institution. When he reapplied for his job, he was asked to disclose his Facebook user name and password. Collins complied and was eventually rehired, but he complained to the Maryland Chapter of the American Civil Liberties Union (ACLU). The ACLU pursued Collins’s complaint and those of a number of other correctional employees. The Department responded that its “efforts to explore an applicant’s behavior on social media stems not from a desire to invade personal privacy, but rather from a legitimate and serous concern with the infiltration of gangs into our prisons.” The Baltimore Sun reported that as a result of the review process, the Department rejected seven individuals out of 2,689 applicants over the course of a year, some of whom had posted photographs of themselves using gang signs.
The legislature took up the issue and has made Maryland the first state in the nation to prohibit employers from requesting or requiring employees to disclose their social media passwords as a condition of employment. Under the new law, an employer may not request or require that an applicant disclose any user name, password or other means for accessing a personal account, and may not discipline, discharge, refuse to hire or otherwise penalize an employee or applicant for refusing to disclose the information. The law does not apply to user names, passwords or other means for accessing an employer’s own internal computer or information systems.
In response to business community concerns over improper use of employer computer systems, the bill was amended to prohibit employees from downloading an employer’s proprietary information or financial data to an employee’s personal website or web-based account. The law also allows employers to investigate such actions based upon receipt of information about unauthorized downloading or to ensure compliance with applicable securities and financial laws, or regulatory requirements.
Commentators have noted that such inquiries may cause problems for an employer if it discovers information about an applicant’s or employee’s membership in a protected group under the discrimination laws. For instance, that the applicant or employee has a disability or belongs to a certain religion.
Maryland may not be alone for long. Similar legislation has been proposed in Illinois, Michigan and California. In the United States Congress, Democrats also offered a password protection measure as an amendment to a recent Federal Communication Commission bill, but the proposal failed to pass. The issue, however, is likely to be raised again.

New Law Limits Circumstances Under Which Employers Can Require Employees to Return to Work After Serving On Jury Duty

A new law passed by the General Assembly prohibits an employer from requiring an individual who is summoned and appears for jury service for four or more hours, including traveling time, to work an employment shift that begins: (1) on or after 5 p.m. on the day the individual appears for jury service, or; (2) before 3 a.m. on the day following the individual’s appearance for jury service. In other words, an employee who serves on jury duty for more than four hours may not be required to report to work again until a shift beginning after 3 a.m. the day following the day of the jury service. Currently, there are no restrictions in Maryland on an employer’s right to require an employee to report for work after the employee’s jury service for the day has concluded. The new measure is based on a similar law in Virginia and takes effect on October 1, 2012.
Under existing law, employers are already prohibited from discharging or threatening to discharge an employee because the employee loses work time responding to a summons for jury duty. In addition, an employer may not require an employee to use his/her annual, sick, or vacation leave to respond to a summons for jury service.
Violation of the existing laws and the new return to work law all carry the possibility of a $1,000 fine. However, an employee who is fired in violation of any of these laws may have the basis to file a private law suit for wrongful discharge, which can expose an employer to liability for lost wages and punitive damages.

Gender Identity Laws Pass in Baltimore and Howard Counties; Rejected by State

Howard and Baltimore Counties passed legislation adding gender identity and expression to the list of characteristics protected by the local discrimination laws of those counties. They join two other Maryland jurisdictions, Baltimore City and Montgomery County, which already protect gender identity under their discrimination laws. A bill to amend Maryland’s state-wide anti-discrimination law was introduced during the recently concluded General Assembly session, but failed to pass. Similar legislation has been proposed in Annapolis each year since 2008. Although Title VII, the federal anti-discrimination statute, does not specifically protect transgender individuals, the EEOC and some federal courts have found that the prohibition against sex discrimination can encompass discrimination based upon gender identity.
The new county laws follow an attack on a transgender woman after she used the restroom at a McDonald's in Baltimore County last year. The incident, which was recorded on a cell phone camera and posted on the Internet, attracted widespread press coverage. In light of the General Assembly’s continued failure to amend the statewide anti-discrimination law, transgender rights advocates took their battle to the counties for action.
Under the Baltimore County law, “gender identity or expression” is defined as “a gender-related identity or appearance of an individual regardless of the individual’s assigned sex at birth.” The Howard County definition is nearly identical. The law does not prohibit employers from requiring employees to adhere to reasonable workplace appearance, grooming and dress standards, so long as the employer allows any employee to appear and dress in a manner consistent with their gender identity.
Both County Councils rejected protests from opponents of the laws who suggested that extending protection to transgender individuals would allow men posing as women to gain access to bathrooms and locker rooms in public accommodations and workplaces. That problem has failed to materialize as a workplace issue in jurisdictions which already protect gender identity. Employers will, however, have to navigate complaints from co-employees who believe that their privacy is being invaded by allowing someone who identifies as a member of the same sex, but whose appearance may resemble the opposite gender, to use such single sex facilities.
The Montgomery County ordinance, which was passed in 2008, provides that employers and places of public accommodations may not deny an employee or any other individual equal use of any restroom, shower, dressing or locker room, or similar facility associated with the gender identity publicly or exclusively expressed or asserted by that person. The new Baltimore and Howard County laws, however, provide less guidance. Both laws exempt “facilities” that are “distinctly private or personal” from the prohibition against discrimination, but neither defines what constitutes such a facility. An early version of the Baltimore County bill provided that “distinctly private or personal” referred to sex-segregated facilities like “restrooms, bath houses, locker rooms, dressing rooms, changing rooms and similar facilities,” but that language was deleted before passage. The absence of guidance will leave the issue of sex-segregated facilities in both counties open to interpretation by the county human relations agencies and, ultimately, the courts.
In addition to employment, both new laws also prohibit gender identity discrimination in housing, public accommodations, and financing. The Howard County law additionally prohibits gender identity discrimination in law enforcement.
In Howard County the discrimination law applies to all employers who employ 5 or more employees on a full or part-time basis and creates a private cause of action under which an aggrieved employee may file suit in the state circuit court. The Baltimore County law also creates a private cause of action, but the right to file suit only applies to employers with fewer than 15 employees. The new laws took effect in Howard County in February 2012 and in Baltimore County on April 6, 2012.

Amendments to Maryland's Workplace Fraud Act Ease Burden on Employers

Maryland’s Workplace Fraud Act of 2009 (“WFA”) targets employers who misclassify employees as independent contractors. Misclassification allows employers to avoid paying payroll taxes and making contributions to the state’s unemployment and workers’ compensation insurance funds. The primary provisions of the WFA give the Commissioner of Labor and Industry the authority to investigate workplace fraud in the construction and landscaping industries because, the General Assembly found, employee misclassification occurs most frequently in those occupations. The law also creates a new set of escalating penalties ranging from $1,000 per employee for first time violators who do not knowingly break the law but fail to come into compliance within 45 days of notice by the Commissioner, to $20,000 per employee for employers found to be in violation three or more times. Under the prior law, there was no penalty for misclassifying employees as independent contractors.
Employers in the most affected industries complain that they are being targeted and the law imposes unfair burdens. The Department of Labor, Licensing and Regulation claims that the law is being used to protect working families and to level the field between employers who play by the rules and those who do not. In January 2012, the Department issued a statement that since 2009 it has opened 660 investigations, issued citations in only 12 and, although it collected $33,000 in civil fines from employers for failing to provide employment records in a timely fashion, it had not assessed any fines for misclassification. Nevertheless, business interests were successful this year in pushing through some clarifying amendments to the law.
The WFA currently creates a presumption that an employment relationship exists whenever a payment is made for services performed. The 2012 amendments provide that the presumption does not apply when employers are able to produce the following records supporting an independent contractor relationship:
1. A written contract, signed by the employer and contractor that:

• describes the nature of the work to be performed
• describes the remunerations to be paid for the work
• includes an acknowledgement by the independent contractor of its obligation to withhold and pay payroll taxes and unemployment insurance and maintain worker’s compensation insurance for all of its workers.

2. An affidavit signed by the contractor stating that it is an independent contractor and is available to work for other business entities.
3. A current certificate of good standing issued to the contractor by the State Department of Assessments and Taxation.
4. Proof that the contractor holds all occupational licenses required by the state and local authorities for the work to be performed.
5. Proof that the employer provided a prescribed notice to the contractor explaining the implications of the individual's classification as an independent contractor rather than as an employee.
The amendment also allows businesses to provide copies of records, rather than allow auditors into the place of business to inspect the records, and modifies other procedural aspects of the of the law.

New Law Creates a Limited Union-Employee Privilege

A new law passed during the recent General Assembly session prohibits labor unions and agents of labor unions from being compelled to disclose certain information acquired in confidence from an employee in the course of the agent’s professional duties. The communication must relate to a grievance of the employee and the grievance must be subject to an investigation, grievance proceeding, or a civil court, administrative or arbitration proceeding. The privilege protects the communication itself, but not the facts underlying the communication, and survives termination of the employee’s employment and the union’s representation of the employee.
While many commentators have compared the new privilege to the long-standing privilege that protects attorney-client communications, the new law contains many exceptions:

• It does not apply in criminal proceedings.
• The union must disclose communications to the employer to the extent the union believes it is necessary to do so to prevent certain death or substantial bodily harm.
• The union may disclose communications where the union reasonably believes it necessary:

• To prevent the employee from committing a crime, fraud, or violation of the collective bargaining agreement (CBA) between the employer and the union, that is reasonably certain to cause substantial injury to the financial interests or property of any person or entity, and in furtherance of which the employee has used the services of the union or its agent;
• To prevent, rectify, or mitigate substantial injury to an entity’s financial or property interests resulting from a criminal or fraudulent act by employee, in furtherance of which the employee has used the services of the union or its agent;
• To secure legal advice regarding compliance with a court order or the CBA;
• To establish a claim or defense in a legal action or dispute between the employee and the union;
• To comply with a court order or the CBA;
• To the extent the communication is an admission that the employee committed a crime;
• In any court, arbitration, and/or agency proceeding against the union or the union’s agent;
• Where the union obtained written or oral consent from the employee to disclose the communication;
• Where the employee (or the employee’s estate or guardian) has waived the communication’s confidentiality, or;
• When required by court order.

Under the federal National Labor Relations Act (NLRA), both unions and employers are subject to a duty to furnish information to the other. In some situations, the NLRA requires a union to provide information or documentation to an employer that it receives from an employee, even if the employee does not consent to the disclosure; if the union fails to do so, it violates the NLRA. Recognizing that federal law will trump the new privilege, the legislature included a "savings clause," which provides that in the event of a conflict between the privilege and any federal or state labor law, the labor law will control.