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employer attorney Maryland
Fair Labor Standards Act (FLSA)

BML — Are Employers Responsible When They Don’t Know their Employee Worked Overtime

By Bruce M. Luchansky, Esq. Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. An Employer Is Not Obligated to Pay an Employee Overtime if the Employee Did Not Inform the Company that He Worked Overtime, the Fifth Circuit Rules By: Bruce M. Luchansky, Esq. The Fair Labor Standards Act (FLSA) requires that employers pay their non-exempt employees overtime rates for all hours above 40 that they work in a week. In most cases, of course, an employer knows when an employee is working overtime. The company either approves the overtime expressly or approves it implicitly by knowing the employee was performing the work and not objecting. But what happens when an employee claims that they had been working overtime, and the employer claims that it had no knowledge that the employee was doing so? Does the employer have to pay overtime when it had no actual or constructive knowledge that overtime work was being performed? The answer is, No. And in a recent decision, the federal Fifth Circuit Court of Appeals applied a particularly employer-friendly standard for making that determination. The court narrowly defined—in the employer’s favor—what it means for a company to have “constructive knowledge” of its employees’ hours. In Merritt v. Texas Farm Bureau, 166 F.4th 490 (2026), the Fifth Circuit held that an employee (initially misclassified as an independent contractor) could not recover overtime compensation because his employer lacked actual or constructive knowledge of his overtime work. The court rejected two key arguments that would have expanded the constructive knowledge standard. First, the court rejected the employee’s argument that the company knew he was working overtime based on the FLSA’s definition of “employ” as “to suffer or permit to work.” The employee argued that because his employer permitted him to work unlimited hours, the employer’s knowledge of overtime was irrelevant. The court disagreed. Rather, the court emphasized that, “we have consistently required employees claiming an entitlement to overtime pay to prove their employer’s ‘knowledge, actual or constructive, that [the employees] w[ere] working’ overtime.” It was not enough that the employee was permitted to work more than 40 hours per week. The employee had to prove that the company knew or had reason to believe that he was working more than 40 hours per week. Second, and most significantly, the court rejected the argument that the employer’s failure to maintain a timekeeping system constituted constructive knowledge of overtime work. The employee argued that this lack of a timekeeping system showed the employer’s failure to exercise “reasonable diligence” to discover overtime work. The court firmly rejected this theory, however, stating that, “to say that TFB’s lack of a timekeeping system equals constructive knowledge of overtime would incorrectly flip Merritt’s burden onto TFB.” The court noted that it has “never held that an employer’s failure to maintain a timekeeping system in itself constitutes constructive knowledge of an employee’s overtime work.” The 5th Circuit’s approach in Merritt builds on its established precedent requiring strict proof of employer knowledge of overtime work. While the decision is important to employers, it must be remembered that the 5th Circuit includes Texas, Louisiana, and Mississippi, and that Maryland is located within the 4th Circuit Court of Appeals. The 4th Circuit has not addressed the specific test for constructive knowledge of overtime adopted in Merritt. Therefore, while the Merritt decision still may have persuasive value in Maryland cases, the 4th Circuit generally has tended to take a more evidence-based approach to the determination of constructive knowledge than the approach in Merritt. The 4th Circuit’s approach is exemplified in Lyle v. Food Lion, Inc., 954 F.2d 984 (1992), where employees successfully proved that their employer had actual or constructive knowledge of off-the-clock work. The court held that employees “had to prove by a preponderance of the evidence that they worked overtime hours without compensation and that Food Lion knew of such work. “Crucially, the district court found that “Food Lion, through its store managers and assistant store managers, had actual or constructive knowledge of Tew and Lyle’s off-the-clock work, the evidence showing, among other things, that on numerous occasions, store management personnel gave Tew and Lyle keys to the store so that they could let themselves in to work off the clock before regular store hours” The 4th Circuit also takes a more stringent approach toward an employer’s recordkeeping obligations, as evidenced by the recent 4th Circuit case, Figueroa v. Butterball, LLC, 164 F.4th 312 (2026). While not directly addressing the knowledge standard for off-the-clock work, the court emphasized that, “The FLSA also creates a burden for covered employers ‘to keep proper records of wages, hours, and other conditions and practices of employment,’ because the employer is in a better position than the employee to do so. ” When employers violate their recordkeeping duties, “the court employs a burden-shifting framework that allows employees without access to accurate timekeeping records to rely on their own testimony to meet their burden of proof.” The most important takeaway from these cases is simple: employers must protect themselves from unexpected overtime claims by doing two things consistently and correctly: (1) avoiding misclassification of employees as independent contractors, and non-exempt employees as exempt employees; and (2) keeping excellent time-keeping records for all non-exempt employees. Employees who file overtime claims are entitled to recover their unpaid overtime wages, plus liquidated damages that typically result in doubling the wages owed, as well as their attorneys’ fees. Even when settled quickly, “small” cases typically cost an employer more than $100,000 in damages and attorneys’ fees. At Luchansky Law, we help employers properly classify their employees, solve issues concerning proper pay practices, and successfully defend against FLSA claims. Call me at 410.522.1020, or email me at lucky@luchanskylaw.com to discuss how I can assist your company. How Luchansky Law Can Help Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment

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topline Apr 20 No Comments
Fair Labor Standards Act (FLSA)

BML Defending Exempt Status under the FLSA Recently Became Easier

Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. Defending Exempt Status Under the FLSA Recently Became Easier By: Bruce M. Luchansky, Esq. High-level employees often are exempt from the overtime laws under the Fair Labor Standards Act (FLSA). When employees are paid on a salary basis and they perform duties as a manager, administrator, or professional (for example), they do not receive an overtime premium for any hours they work above 40 hours per week. But what happens when an employee challenges his or her exempt status? Perhaps a Project Manager argues that his primary duties are not managerial or administrative. If the Project Manager sues the company for unpaid overtime, the employer will have the legal burden to prove that the PM meets the definition of an exempt employee. But what is the legal standard the employer must meet? How hard will it be for the company to prove its case? A recent decision by the United States Supreme Court made it much easier on employers – especially those in Maryland – to prove exempt status. In E.M.D. Sales, Inc. v. Carrera, 604 U.S. 45 (2025), the Supreme Court resolved a split among the federal circuits regarding the legal standard to be applied and issued a decision that changed the legal standard of proof in favor of the employer. Before Carrera, some federal circuits – including the 4th Circuit, which encompasses Maryland – required employers to prove by “clear and convincing evidence” that an employee met all the requirements of exempt status under the FLSA. This standard is a high one that often is reserved for difficult cases such as claims of fraud, in which the facts at issue must be proven to be highly probable. Other circuits disagreed and held that the legal standard only should be the one that applies to most cases: the preponderance of the evidence standard. Under this test, the employer only would have to prove that it is more likely than not that the employee is exempt. Put simply, the judge or jury simply must find that it is at least 51% – 49% in favor of the employer. In Carrera, the Supreme Court disagreed with the 4th Circuit and found that the “preponderance of the evidence” standard should apply to proving exempt status. Of note, the Supreme Court pointed out that discrimination cases under Title VII of the Civil Rights Act are decided under the preponderance of the evidence standard and saw no principled reason why a different standard should apply to FLSA cases. Wage and hour issues are complicated. Before classifying your employees as exempt under the FLSA, or if an exempt employee challenges his or her exempt status, email me at lucky@luchanskylaw.com, or call me at 410.522.1020. The attorneys at Luchansky Law will guide you through the legal thicket of the applicable overtime laws. How Luchansky Law Can Help Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.

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topline Apr 20 No Comments
Security Clearance

AG – Remote Work – Feb 2026 Article 2

Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. All Remote Work and No Remote Play By: Alan Glickman It is well known that, unless you enjoy riling people up, there is a list of topics not to discuss in polite company that includes politics, religion, and finances. Within the last 6 years, remote work has been added to that list. There are proponents on either side of the debate, all coming from various perspectives. Many employees claim remote work saves the employer money on in-office utilities, while many employers discuss how the need for more robust technical infrastructure and employee hardware adds costs. The back-and-forth goes, well, back and forth. Employees often point out that companies continued to function all throughout COVID when nearly everyone was working from home (with the exception of essential employees, who observe the debate from the sidelines with no patience for either side), while employers retort that COVID was an emergency situation and work was necessarily limited based on the need to stay sequestered. Similarly, many employees champion remote work because they believe they can work more efficiently from the comfort of their own home, on their own schedule. Many employers discourage remote work because they believe just the opposite—remote work adds an additional layer of distraction and interference that often gets in the way of efficient communication and interactions. Employers want all remote work and no remote play, while employees believe that will turn them into Jack Torrance from The Shining. The often unspoken but underlying theme of both sides is the question of trust between employees and employers. Employers may not feel they can trust the employees to perform their jobs as conscientiously as the employer expects if the employees are not readily available and supervised. Employees feel the lack of trust, and will often respond in kind, engaging in what is referred to as malicious compliance. In other words, following the letter, but not the spirit, of the rules. Any employer who has stood the test of time will tell you that building measurable accountability and performance standards are integral to achieving success, but building trust between the employees and the employer is integral to achieving excellence. So how do you balance these seemingly opposing goals? The truth is, these goals are not opposing at all; in fact, they complement each other. Clear performance expectations and accountability standards—accountability for the employee, for the employee’s supervisor, for the supervisor’s manager, all the way up to the CEO level—is the framework that allows trust to grow. When the employer clearly communicates its policies about performance expectations, communicates its policies that dictate the result when those expectations are not met, and most importantly, consistently applies those policies, any other matter becomes relatively easy to deal with. The trick is to ignore the triggering term “remote” and focus on the universal term “work.” If an employee requests remote work, look to your policies. Does the request fall under an approved reason, such as a reasonable accommodation for a medical condition? Then approve the request. But what if the employee isn’t doing their job? Then you do the same thing you would do with any other employee who isn’t doing their job—respond in accordance with your performance policies. But what if I can’t tell if the employee is doing their job because they are working remotely? Then you need to revisit your performance policies, because they are not clear enough. Employers who find themselves in this position often would benefit from defining some performance metrics that can be measured objectively. There is less ambiguity (and, therefore, less anxiety) when you can say that a remote employee “failed to close 20% of his tickets on each of 7 days during the last 10 day period, which is 15% higher than the 5% rate deemed acceptable,” instead of saying, “I think Fred isn’t working hard enough.” If you read my previous articles, you might recognize the common theme of the importance of clear policies. That is no coincidence; there is almost nothing more important for a company from the standpoint of employee relations and compliance with employment laws. If you need assistance evaluating your company’s policies, advice about structuring a program, or guidance through regulatory compliance, Luchansky Law has the expertise you need and responsiveness you want. Give me a call at 410.522.1020, or email me at alan@luchanskylaw.com to discuss how I can help. How Luchansky Law Can Help Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.

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topline Apr 20 No Comments
Security Clearance

AG – Demystifying Security Clearances

Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. Demystifying Security Clearances By: Alan Glickman, Esq. Depending on your age and media franchise preference, security clearances can conjure up images of shaken martinis, silenced Berettas, detailed satellite imagery, nuclear submarines, and codewords. When I was younger, I devoured Tom Clancy novels (back when he actually wrote them) and dreamed of working with information so secret I would have to tell my friends and family that my job was some ordinary dull grind, like lawyering… If your career is taking you into that world of classified information, I envy you. I also can tell you that getting there is not a straight path. For law nerds like me, the whole process is governed by 50 United States Code (U.S.C.) § 3341, supplemented by Executive Order 12968, and regulated by 23 Code of Federal Regulations (C.F.R.) Part 147. There are additional regulations depending on the specific governmental agency. ‘Employer Sponsorship However, whether you plan on working directly for any department of the U.S. Government or for one if its contractors, and whether you are trying to get a Confidential, Secret, or Top Secret clearance, obtaining one only begins by your potential employer sponsoring you for the position that requires the clearance. After being sponsored, you complete a Standard Form 86 (SF-86). U.S. Government forms often use the Standard Form/SF prefix, as if to try to assure people that their forms are standard and normal, even though we all know better. This SF-86 is available on the Electronic Questionnaires for Investigations Processing system (e-QIP). The e-QIP’s SF-86 covers everything about you for years prior. We’re talking where you lived, where you worked, where you went to school, where you’ve traveled, whom you know, whether you have any criminal history, what your finances are, and more. At this point, you would think the government knows all there is to know about you, right? But that’s just the beginning. Investigation The next step is a background investigation to verify that you were truthful on your SF-86. This can involve looking through available records and interviewing references, employers, and neighbors. For higher-level clearances, the investigation will be even more extensive, looking carefully at finances and connections with foreign individuals to determine how much vulnerability you have to leverage from those sources. Once the investigator is confident that you gave the correct information and that nothing in your background so far flagged you as a security risk, you go through fingerprinting and a criminal records check. With those higher-level clearances, you may have to take a polygraph, too. Now that the investigator knows more about you than your own mother, all that information is evaluated under the Adjudicative Guidelines for National Security Eligibility. If it all checks out, your clearance is granted and you are on your way to wearing tuxedos and yelling things like, “Get off my airplane!” No, sorry. That’s the wrong Harrison Ford movie. Denial If your clearance is not approved, or if it gets revoked, you can appeal the determination through an administrative appeal process. The specifics differ according to the sponsoring agency, but the general process is the same. The denial itself involves a Statement of Reasons (SOR). As its name implies, the SOR lists the concerns, based on the Adjudicative Guidelines, that led to the denial. Upon receiving the SOR, you have between 20 and 30 days to respond in writing to explain the concerns away and provide mitigating evidence. This written rebuttal must respond to each concern in the SOR. The responses will need to correct inaccurate information, provide updated information (such as paid off debts), statements from friends or colleagues to show your trustworthiness (be careful which of your childhood friends you ask to write this reference), and any additional context you think is necessary to explain circumstances that appear concerning to the government. The government will then make its final determination based on the information in the rebuttal. Alternatively, depending on where you applied for the position, you can request a hearing before an administrative judge with the Defense Office of Hearings and Appeals (DOHA). The judge will issue a written decision based on the evidence provided during the hearing. Even if you receive a final denial, you typically still can appeal to an appeal board of agency review authority. It is important to note that on appeal, you cannot provide any new or additional facts. The appeal focuses on whether denial was based on a correct application of law and guidelines. Obviously, this is not a fast process. Depending on the level of clearance, you can wait between a month and over a year for the final approval, and even longer if you need to fight a proposed denial. This overview of the process, on the other hand, was entirely too fast. If you are contemplating applying for a position that requires a security clearance, if you are facing a SOR and need help with your rebuttal, or if you need representation before DOHA. Contact us at Luchansky Law, where we will do our best to make your dreams of being a spy come true. How Luchansky Law Can Help Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.

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topline Apr 20 No Comments
Uncategorized

BML DOL Proposes New Independent Contractor Rule

Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. Employee or Independent Contractor: The DOL Issues a New Proposed Rule By: Bruce M. Luchansky, Esq. On February 26, 2026, the U.S. Department of Labor’s Wage and Hour Division issued a proposed rule to clarify the classification of workers as employees or independent contractors under the Fair Labor Standards Act (FLSA), aiming to provide greater certainty for both workers and employers. The Notice of Proposed Rulemaking (NPRM) would rescind the department’s 2024 final rule on independent contractor classification and replace it with an approach similar to the one adopted in 2021 during the first Trump administration. The proposal seeks to make it easier to distinguish between employees—who are entitled to FLSA protections such as minimum wage and overtime—and independent contractors, who are not. It aligns with longstanding Supreme Court and federal circuit court precedent by focusing on whether a worker is economically dependent on an employer or truly in business for themselves. Under the proposed rule, the DOL would apply an “economic reality” test to evaluate worker status. This test examines whether the worker operates an independent business or relies economically on the employer for work. The analysis highlights two core factors that carry significant weight in the determination: The nature and degree of control the potential employer has over the work; and The worker’s opportunity for profit or loss based on personal initiative and/or investment. Additional factors also would be considered, particularly if the core factors do not clearlypoint to one classification. These include: The proposal emphasizes that actual practices in the relationship matter more than what is stated in contracts or what might be theoretically possible. It also includes eight fact-specific examples to illustrate how the factors apply in real-world scenarios. The proposed rule, if finalized, would have impact beyond the FLSA alone. The proposed rule would extend this analysis to the Family and Medical Leave Act (FMLA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), both of which rely on the FLSA’s definition of “employ.” This development is a positive one for employers. The 2024 rule, which the proposal would rescind, used a broader “totality of the circumstances” approach with six non-hierarchical factors and no designated core factors. The new proposal restores emphasis on the two core factors for greater predictability and consistency with judicial interpretations. As a result, it is more likely that courts would uphold companies’ classification of workers as independent contractors. This proposed change could impact industries that frequently use independent contractors, such as construction, transportation, gig economy platforms, agriculture, and professional services, by potentially simplifying compliance while maintaining worker protections where appropriate. The rule is not yet final and may be adjusted based on public input. If your company utilizes independent contractors, the risk of misclassification can be significant—and costly. Luchansky Law regularly works with companies to classify its workers properly so they comply with all applicable laws, such as the FLSA, the FMLA, and the Maryland unemployment insurance laws. If you have any questions about employee classification, feel free to contact me at 410.522.1020, or lucky@luchanskylaw.com How Luchansky Law Can Help Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.

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topline Apr 20 No Comments
Uncategorized

When Complaints Become Protected: A Practical Guide to Concerted Activity

Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. When Complaints Become Protected: A Practical Guide to Concerted Activity By: AJ Esral, Esq. Here’s an everyday scenario for your consideration: A company issues its annual merit-based raises to all its employees. Two employees are overheard discuss their bonuses in the breakroom, with one wondering out loud why the other got more than he did. The boss finds out about the conversation and disciplines the two employees, pursuant to the well-circulated handbook policy stating that wage information is “confidential.” What do you think? Did anything illegal happen in this scenario? The answer is an unequivocal yes. That boss has, unfortunately, opened the company to a substantial risk of legal liability for a seemingly common workplace occurrence. This is true even though the employees in question are not a member of a protected class, not a member of a union, and were, in fact, on notice about the policy in question. No matter. The answer is an unequivocal yes. That boss has, unfortunately, opened the company to a substantial risk of legal liability for a seemingly common workplace occurrence. This is true even though the employees in question are not a member of a protected class, not a member of a union, and were, in fact, on notice about the policy in question. No matter. (Most people have never even heard of it.) Yet it is one of the most frequently violated areas of employment law, and one that applies to every workplace, so here’s the quick breakdown for you. In a nutshell, an employee has the right to take action with other employees to improve their wages, benefits, or working conditions. When that happens, the employees’ employer may not take any retaliatory actions toward them; he may not fire, discipline, or even threaten to discipline them for their actions. Here are those same three words, each defined individually: Protected: Employees’ rights to engage in “concerted activity” (defined below) is protected by the National Labor Relations Act. Violations are investigated and litigated by the Regional Director of the National Labor Relations Board, and remedies can include reinstatement, back pay, posting of notices, and an injunction; Concerted: When employees act together or on behalf of others, which can include two employees talking or one employee trying to initiate group action (e.g., circulating a petition), concerning the terms and conditions of their employment, including pay, schedule, overtime, staffing levels, workload, harassment reporting, or benefits; Activity: This includes complaints, petitions, walkouts, strikes, and even social media posts involving workplace concerns. Importantly, even when an employee engages in conduct that might otherwise be labelled as insubordination, such as profanity, disrespect, or outbursts, this conduct often will be overlooked if he was engaged in protected concerted activity at the time. Here are three relatively recent examples of protected concerted activity cases: Stericycle, Inc., 372 NLRB No. 113 (Aug. 2, 2023): In Stericycle, the NLRB adopted a tougher standard for evaluating workplace rules, holding that an employer policy is presumptively unlawful if employees could reasonably read it as chilling their Section 7 rights to discuss wages, working conditions, or act together regarding workplace concerns (such as a policy banning “behavior that is harmful to Stericycle’s reputation”). The burden now shifts to the employer to prove the rule advances a legitimate and substantial business interest and is narrowly tailored so it does not unnecessarily interfere with protected activity. NLRB v. Pier Sixty, LLC, No. 15-1841 (2d Cir. 2017): In Pier Sixty, an employee posted a profanity-laced Facebook message insulting his supervisor and ending with “Vote YES for the UNION!!!!!!” The employee was fired shortly thereafter. The Second Circuit court held that while it was on the “outer bounds” of protected speech, it still was not so egregious as to lose Section 7 protection. Brynn Marr Hospital, Inc., JD-72-25, 10-CA-328533 (ALJ Decision): A nurse was fired for posting on Facebook about a “vendetta” she had against one of the hospital leaders. The administrative law judge found that the post concerned legitimate workplace issues, did not contain threatening language, and represented the concerns of a group, not merely of herself, and therefore ordered for the nurse’s reinstatement. I’ll leave you with three things you can do to protect yourself: First, review your policies. Badly drafted or implemented policies are the surest way to fall prey to a Section 7 complaint. See if any policies reasonably can be read to prohibit employees from talking about wages, schedules, or safety concerns with each other. Second, pause before discipline when the issue involves working conditions. Is this a group activity or on behalf of others? Is the problem the employee’s conduct, or the substance of what they’re complaining about? Third, train your supervisors to look out for this sort of behavior before starting on discipline. Don’t ever threaten job loss or promise benefits to prevent employees from organizing or complaining together. And keep in mind that Section 7 rights still apply, even if the employee is: Non-union Rude, or Acting alone, as long as the employee even is trying to involve coworkers. As always, if you would like us to prepare or review your company’s employee handbook to make sure it complies with Section 7 of the NLRA and all applicable laws, or if you have Section 7-related questions, just shoot an email to aj@luchanskylaw.com, and we will be happy to assist you. How Luchansky Law Can Help Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.

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topline Apr 20 No Comments
Uncategorized

When Off-Duty Behavior Follows Employees Back to Work

By AJ Esral, Esq. Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. When Off-Duty Behavior Follows Employees Back to Work By: AJ Esral, Esq. Can a company discipline, or even terminate, an employee who misbehaves outside of work? Here’s the scenario: a warehouse operations supervisor at a Maryland distribution company disciplines an employee for repeated safety violations and insubordination. The employee insists he is being singled out and, after a failed internal complaint, becomes increasingly fixated on the supervisor and another coworker who corroborated management’s concerns. Things escalate, and one Friday evening, the employee runs into the supervisor at the local supermarket and curses him out for the world to hear, ending his rant by dramatically promising revenge, and punching the guy in the face. By Monday, word has spread across the workplace. Employees are frightened, management is scrambling to address safety concerns, and the company is asking a hard but urgent question: can it lawfully terminate the employee, even though the most serious conduct happened off duty and away from company property? In Maryland, the answer very likely is, yes. Maryland is an at-will employment state. That means that, absent a contract, statute, or other legal protection, an employer may terminate an employee for any reason or no reason at all, so long as the termination does not violate a clear mandate of public policy. Maryland courts have described that exception as narrow, not broad. In practical terms, an employer does not need to prove that the employee committed a crime or violated a written policy in some technical sense; they just need some legitimate, nonretaliatory basis for ending the employment relationship. Threatening conduct that is linked to workplace relationships easily qualifies. The fact that the employee’s most alarming conduct occurred off the clock does not defeat the analysis. Maryland law does not impose a rigid rule that only on-premises or on-duty misconduct counts as workplace misconduct. Instead, there are categories of off-premises conduct that Maryland law recognizes as justifying disciplinary action. Maryland’s highest court long ago provided a set of factors that courts have used to determine whether conduct is adequately connected to the workplace to justify discipline up to and including termination of employment. In Employment Security Board v. LeCates, 218 Md. 202, 145 A.2d 840 (1958), the then-Court of Appeals articulated that the key question is whether there was a sufficient nexus between the off-duty conduct and the employer’s interest in maintaining a safe and functional workplace. This principle was sharpened in Fino v. Maryland Employment Security Board, 218 Md. 504, 147 A.2d 738 (1959). Fino distinguishes between an employee who beats his wife after hours and one who assaults his fellow employee after hours, contending that while the former case lacks any clear workplace nexus, the latter case does not. When the misconduct arises from workplace tensions, targets workplace actors, and predictably disrupts workplace operations, the nexus requirement is satisfied. So, for example, in Stinson v. Towson Inn Restaurant Corp., 1602-BR-93, a 1993 Maryland Board of Appeals opinion, an employee assaulted his coworker after hours, off premises, over a work-related dispute. The Board held that under the LeCates framework, the assault was incident to the work and was a breach of the employee’s duty to his employer. Similarly, in De Amat v. United Natural Foods, Inc., No. 8:21-cv-02323 (D. Md. 2024), the court treated it as a legitimate employment concern when employees in a store complained that their supervisor was constantly screaming at them, and they expressed concern for their safety. Thus, when the off-duty behavior fosters a genuine sense of fear within employees in a given workplace, such behavior may be disciplined, and the employee may even be terminated, because that behavior directly impinges on the employer’s interest in maintaining a productive company. To be sure, employers should still act carefully. They should investigate promptly, document witness statements, preserve security footage or messages, consider interim leave or security measures, and make sure the termination decision is not tainted by retaliation, discrimination, or inconsistency. But once the facts are substantiated, Maryland law gives employers substantial room to act decisively, and the fact that the confrontation happened off premises does not meaningfully insulate the employee from discharge. To the contrary, where the conduct is rooted in work, directed at workplace participants, and destabilizes the safety and functioning of the workforce, termination not only is lawful; it may be the most responsible course an employer can take. Luchansky Law specializes in helping businesses make defensible termination decisions, often on short notice, before a bad situation gets worse. If you’re dealing with this—or any other workplace challenge—email me at aj@luchanskylaw.com, and I’ll be happy to help. How Luchansky Law Can Help Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.

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topline Apr 20 No Comments
Uncategorized

AJE PTO – What Employers Need to Know

By AJ Esral Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. PTO: What You Need to Know By: AJ Esral It’s the bane of many employers’ existence. How much paid time off do I have to give? How much should I give? Can I place strings on it? Blackout dates? Two-week notice requirement? Probationary periods? Sick time or vacation? Does it matter? Employers have lots of questions. Here’s the thing. What many employers refer to as “PTO” really means three separate things: Required paid sick and safe leave (Maryland-specific) Job-protected unpaid leave buckets (some federal, some Maryland), and Whatever PTO you choose to offer on top of that. And each, as you can imagine, has its own rules. So here’s a very brief overview of these three Sick and Safe Leave. The only paid leave a Maryland employer is legally obligated to provide is sick leave. Let me say that again: the only paid leave a Maryland employer is legally obligated to provide is sick leave. Maryland has a law called the Sick and Safe Leave Act, which requires employers with 15 or more employees to provide up to 40 hours of paid sick and safe leave (SSL) per year to any employee who works at least 12 hours a week. Employers with fewer than 15 employees must offer the same amount of leave, only unpaid. That’s it. Any paid leave beyond those 40 hours is optional. Now, because this leave is legally required, there are some rules that come along with it, which will not apply to any additional PTO you choose to offer. Here are the main requirements: Sick leave vs. vacation leave: It is sick leave, so you only are obligated by law to provide this leave for actual sickness, plus a handful of domestic violence-related cases. You do not have to permit employees to use it for vacation leave. Accrual vs. frontloaded: An employer has the option of providing the 40 hours up front at the beginning of either the calendar year or the employee’s date of hire, OR granting it on an accrual basis of 1 hour earned for every 30 worked. The advantage of frontloading it is that the law does require you to carry over any unused sick and safe leave at the end of the year, whereas accrued hours do have a certain carryover requirement. Probation period: You are permitted to establish a policy that new employees may not use their SSL for their first 106 days of employment, although the employee must accrue the leave right away. No blackout dates or mandatory notice requirements: Since this is sick leave, there are no blackout dates, and an employee only need give reasonable notice, so you can’t enforce a strict two-week notice rule. You can read more about the Sick and Safe Leave Act, as well as view sample policies, here. Job-Protected Unpaid Leave Beyond the Sick and Safe Leave Act, though, there still is unpaid leave that an employer may need to provide. There are two buckets to know about here. The federal Family and Medical Leave Act (FMLA), which applies to companies with more than 50 employees, requires employers to give their full-time employees unpaid, job-protected leave for up to 12 weeks for qualifying reasons, such as a serious health condition (their own, or that of a sick family member) or the birth, adoption, or foster placement of a new child. The Maryland Parental Leave Act (MPLA) applies to companies with 15-49 employees, and requires employers to offer unpaid, job-protected leave to full-time employees for the birth, adoption, or foster placement of a child. Importantly, you as the employer may require employees to use up all their PTO (or SSL, as the case may be) concurrent with their FMLA or MPLA leave. But you still have to provide this leave, and that means protecting their job until they get back. Now, a caveat: you only need to protect their job if you weren’t planning on terminating them for reasons unrelated to their need for leave. In other words, they only have as much job protection as they had when they were fully employed and coming to work each day. For example, if your company had planned a mass layoff, and this employee was to be included in the layoff, then going out on leave would not protect the employee from being laid off. Similarly, if the company had decided to discharge this employee for justifiable reasons (such as poor performance or misconduct), then the employee cannot protect himself by going out on FMLA leave. Moreover, the FMLA has carveouts for certain key employees, whose prolonged absence would cause “substantial and grievous economic injury to the company.” With that said, though, companies must proceed with caution. Employees tend to view FMLA leave as sacred; anything that has the appearance of violating it will frequently turn into a DOL complaint or lawsuit. Consult with your attorney before you discharge any employee while they are out on FMLA or MPLA leave. It’s worth mentioning three other buckets before closing out this subsection: Americans with Disabilities Act (ADA) leave: employees with a disability may request a reasonable accommodation, which often consists of temporary unpaid leave. Similar considerations apply when discharging an employee on ADA leave as those taking FMLA leave. eave. Military leave (USERRA): federal law provides protected unpaid leave for military service and training; and Jury duty leave: Maryland law provides unpaid mandatory leave for jury duty, for which you cannot force employees to use PTO. Additional PTO You really can stop here. When you comply with the legal requirements described above, you have fulfilled all your legal obligations. What follows is beyond what the law requires and should be recognized as extra benefits you offer voluntarily for the benefit of your employees. Companies are permitted to provide some amount of additional paid leave per year beyond what

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topline Apr 20 No Comments
Non-Compete Agreements

AL – When Is It Time to Go to Court – Enforcing Restrictive Covenants in Maryland

By Ari Lichterman, Esq. Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. When Is It Time to Go to Court? Enforcing Restrictive Covenants in Maryland By: Ari Lichterman, Esq. You took the right first step: you worked with counsel and required your employees to sign carefully drafted restrictive covenant agreements. That first step protects your business—on paper. But when an employee leaves and you suspect they are violating the non-compete, non-solicitation, or confidentiality provisions, preparation alone is not enough. In Maryland, enforcement often requires swift action—sometimes in the form of an injunction to stop the misconduct before damage is done. Effective enforcement generally involves three phases: (1) steps taken before departure; (2) careful evaluation of suspected conduct; and (3) pursuing legal remedies, including injunctive relief. Understanding these stages positions your business to act quickly and decisively when a covenant is threatened. Before an Employee Departs: Effective enforcement of a restrictive covenant ideally begins prior to the employee’s departure. During the departure process, employers should remind the employee of any continuing legal and contractual obligations, including non-compete, non-solicitation, and confidentiality provisions, that extend beyond separation. If a severance agreement is offered, it should expressly reaffirm the restrictive covenants that survive termination, and employers may consider conditioning severance benefits upon continued adherence to the covenants. Employers should also use this opportunity to assess risk by learning about the employee’s future employment plans. Finally, to reduce the risk of losing clients, it is essential to engage in proactive communication with customers and other business partners to control the messaging and reinforce relationships. Evaluating Suspected Conduct: When an employer learns that a former employee may be violating a restrictive covenant, it should act promptly to investigate and assess the scope of the risk. A focused evaluation typically addresses the following core questions: What conduct is the former employee allegedly engaged in, and specifically how does it breach the covenant? What evidence supports the suspected violation? What actual or imminent harm has resulted? Early involvement of experienced counsel is critical. If the employer ultimately seeks injunctive relief, courts will consider how quickly the company acted after learning of the misconduct. Delay can undermine both credibility and urgency. misconduct. Delay can undermine both credibility and urgency. Taking Legal Action: After gathering the relevant facts, the employer must determine the appropriate course of action. Often, the first step is a cease-and-desist letter. A cease-and-desist letter reminds the former employee of their continuing obligations, may notify a new employer of those obligations, and typically demands that any unlawful conduct stop. Cease-and-desist letters have many benefits, such as: Encouraging resolution without litigation Prompting a substantive response that clarifies facts or potential defenses Demonstrates prompt enforcement efforts preserves business relationships while asserting contractual rights In some circumstances, however, litigation may be necessary—either as a last resort or as an initial response if the harm is substantial. The decision to file suit should be made strategically and with counsel. Where a lawsuit can be filed, whether the jurisdiction and venue are favorable, and which state’s law governs are important legal considerations that can shape the likelihood of success. In addition, of course, the anticipated cost of litigation, the potential impact on customers or goodwill, and the risk and severity of ongoing harm are practical considerations that should inform the ultimate decision. When litigation is pursued, employers typically seek both damages and injunctive relief. In most cases, however, the primary objective is an injunction is to immediately stop the violation and enforce the covenant. Injunctive relief generally takes three forms: Temporary Restraining Order (TRO) Preliminary Injunction Permanent Injunction. To meet their evidentiary burden, employers need to present evidence to the court in the form of affidavits, testimony, and relevant documents. TROs and injunctions are considered “extraordinary remedies” and are not awarded easily because they ask the court to order a party to act or cease acting in a certain way without the benefit of a full evidentiary record. The more evidence you have to support the claims, the more likely it is the court will grant the injunction. The court will look to see that the harm is not remote or speculative but is actual and imminent and cannot be recompensed through monetary damages later on. Evidence showing the loss of goodwill or trade secrets, which is difficult to quantify and remedy, can help to establish that an employer is suffering a loss that is irreparable. Ultimately, restrictive covenants require more than preparation to effectively protect business interests. Whether through strategic negotiation or decisive litigation, Maryland employers should be prepared to act when a violation threatens their business. Swift evaluation and deliberate action can mean the difference between contained risk and lasting damage. Careful preparation lays the groundwork, but timely and strategic enforcement is what transforms contractual rights into real-world protection. The attorneys at Luchansky Law are experienced in enforcing restrictive covenants—including noncompete agreements, non-solicitation agreements, and confidentiality agreements—to protect a company’s business interests. I would welcome the opportunity to discuss how to protect your business against unfair competition and enforce your covenants. For more information, call me at 410.522.1020, or email me at ari@luchanskylaw.com. How Luchansky Law Can Help Luchansky Law advises employers on compliance, risk mitigation, and litigation strategy. Contact us to protect your business and navigate employment law challenges effectively.

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topline Apr 20 No Comments
Trade Secrets

AL — Trade Secrets | Employment Lawyer Maryland

Introduction Employers in Maryland and Washington, D.C. face complex legal challenges. This guide explains key employment law concepts and how businesses can protect themselves. Protecting Your Company’s Competitive Edge: Trade Secrets, Confidentiality, and Employment Restrictive Covenants By: Ari Lichterman, Esq. We live in a data-driven and informational world. It is no surprise, then, that for many companies, the most valuable asset is information. Think customer lists, pricing strategies, internal business processes, and proprietary technology. This information is often what defines a company and affords it a competitive advantage. Employees frequently have access to this information and rely on it in performing their work for the company. But when an employee leaves for a competitor—or starts a competing business—the risk that the employee will take that information with them is significant. For employers, well-drafted restrictive covenants that ensure confidentiality and protect trade secrets play a critical role in protecting an employer’s competitive edge. Understanding how trade secrets are defined and what steps businesses can take to safeguard them is essential for employers seeking to protect their valuable information. What Is a Trade Secret? All companies have confidential business, financial, or technical information which can be protected through confidentiality or non-disclosure agreements. If this information can be classified as a trade secret, however, it will be entitled to heightened statutory protection in addition to any contractual protections. The question is: what is a trade secret? In simple terms, a trade secret is confidential business information that provides a competitive advantage specifically because others do not know it and cannot easily discover it. To be considered a trade secret, though, a company must do more than simply call it so; businesses must treat this information differently from other information. Under Maryland law, the Maryland Uniform Trade Secrets Act (commonly referred to as “MUTSA”) defines a trade secret as business information—such as a formula, process, program, method, or compilation of data—that has independent economic value because it is not generally known or readily discoverable by competitors. Md. Code Ann., Com. Law § 11-1201(e). The information must also be retained with reasonable efforts to maintain its secrecy. Id. Federal law provides a similar definition of a trade secret under the Defend Trade Secrets Act (“DTSA”). 18 U.S.C. § 1839(3). Under DTSA, trade secrets include financial, business, scientific, technical, or engineering information that: The owner has taken reasonable measures to keep secret; and That derives independent economic value from being secret. Although DTSA’s definition is broader than that of MUTSA, offering additional examples of the types of information that qualify as trade secrets (such as patterns, plans, designs, prototypes, techniques, procedures, or codes), the definitions remain substantially the same and courts typically treat them as such. In practice, these definitions can include information such as: Customer and prospect lists Pricing strategies and discount structures Software algorithms and source code Product designs and technical specifications Business methods and production processes Marketing strategies and business plans Recipes and chemical formulas However, simply labeling information “confidential” does not make it a trade secret. Employers must demonstrate that the information has independent economic value and that they took reasonable steps to protect it and keep it private. Courts will consider factors such as whether the information is generally known in the industry, the cost and effort invested to develop the information, the level of difficulty required for others to duplicate it, the extent of the measures to maintain its secrecy, and the value it has to competitors. Misappropriation: When Confidential Information Is Taken or Used Under both federal and Maryland law, misappropriation of trade secrets is prohibited. The respective statutes define the specific conduct that is prohibited, but generally, misappropriation occurs when a person: Acquires a trade secret through improper means, or Uses or discloses a trade secret knowing it was done so improperly. Importantly, misappropriation may occur even if the trade secret has not yet been used, so long as it was obtained through improper means. A company can seek court intervention through an injunction for actual and threatened misappropriation, and damages for any harm therefrom. For employers, this means that suspicious data downloads, copying of files before resignation, or sharing confidential information with competitors may all support a claim, even before the information is fully exploited. One important caveat, however, is that DTSA contains an immunity provision which permits the disclosure of a trade secret to a government official or attorney “solely for the purpose of reporting or investigating a suspected violation of law,” or for use in a lawsuit. 18 U.S.C.A. § 1833. If this immunity provision applies, there can be no liability under either DTSA or MUTSA. Why Restrictive Covenants Still Matter Employers are not left without options in situations where DTSA or MUTSA do not apply, or where information does not fall clearly within the definition of a trade secret. In those circumstances, a well-drafted restrictive covenant agreement that defines what information is confidential or proprietary and lays out steps employees must take to safeguard it plays a critical role in protecting employers’ vital competitive information. Confidentiality and non-disclosure provisions in such an agreement accomplish numerous goals. For instance, they: Clearly define what information is confidential or proprietary Require employees to return or destroy such information upon departure Prohibit employees from using such information after employment ends Provide a contractual basis for injunctive and other relief if misuse occurs Because these agreements impose obligations during employment, they provide some level of protection on the front end, preventing misuse before it occurs. If a suspected violation of these contractual provisions occurs, employers can then seek court intervention for the employees’ breach of contractual requirements. Importantly, these provisions also help employers satisfy a critical element of trade secret protection—demonstrating that the company took reasonable measures to protect its information. Without such measures, a company may struggle to convince a court that its information truly qualifies as a trade secret. Protecting Your Business Before Problems Arise The misuse of trade secrets and confidential information can cause significant,

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themodernfirm Apr 17 No Comments

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