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Fair Labor Standards Act (FLSA)

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. Introduction Employers in Maryland and Washington, D.C. face complex wage and hour challenges—particularly when it comes to overtime obligations under the Fair Labor Standards Act (FLSA). One recurring question is: 👉 Must an employer pay overtime if it did not know the employee was working extra hours? A recent federal appellate decision provides an employer-friendly answer. The General Rule Under the FLSA The FLSA requires employers to pay non-exempt employees overtime for any hours worked beyond 40 in a workweek. In most situations, employers are aware of overtime work because: But what happens when the employer claims it had no knowledge of the overtime work? When Knowledge Becomes the Key Issue The legal question becomes: 👉 Did the employer have actual or constructive knowledge that the employee was working overtime? If the answer is no, the employer may not be obligated to pay. The Fifth Circuit’s Decision In Merritt v. Texas Farm Bureau, 166 F.4th 490 (2026), the Fifth Circuit held that an employee could not recover overtime compensation because the employer lacked both actual and constructive knowledge of the overtime work. The court rejected two key arguments from the employee. Argument #1: “Permitting Work Is Enough” The employee argued that because the employer allowed him to work unlimited hours, knowledge of overtime was irrelevant. The court disagreed. It emphasized that employees must still prove that the employer: that overtime work was being performed. Simply allowing work to occur is not enough. Argument #2: No Timekeeping System = Knowledge The employee also argued that the employer’s failure to maintain a timekeeping system created constructive knowledge. Again, the court rejected this argument. It made clear that: 👉 A lack of timekeeping does not automatically shift the burden to the employer. The employee still must prove that the employer had knowledge of the overtime work. How This Applies in Maryland The Merritt decision comes from the Fifth Circuit, which covers: Maryland falls under the Fourth Circuit, which has not adopted this exact standard. However, the decision may still be persuasive. The Fourth Circuit’s Approach The Fourth Circuit generally applies a more evidence-driven analysis. For example, in Lyle v. Food Lion, Inc., employees successfully proved employer knowledge by showing: Additionally, in Figueroa v. Butterball, LLC, the court emphasized that: 👉 Employers have a duty to maintain accurate records. Failure to do so can shift the evidentiary burden and allow employees to rely on their own testimony. Key Takeaways for Employers The lesson is clear. Employers should protect themselves by: 1. Proper Classification Avoid misclassifying: 2. Strong Timekeeping Practices Maintain accurate and reliable records of employee hours. Why This Matters Overtime claims can be extremely costly. Employees may recover: Even smaller cases can easily exceed $100,000. Final Takeaway While the Fifth Circuit’s decision provides helpful guidance for employers, it does not eliminate risk. 👉 Knowledge still matters.👉 Documentation still matters. Employers who implement clear policies and maintain strong records are in the best position to defend against overtime claims. How Luchansky Law Can Help Luchansky Law assists employers with:

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

Defending Exempt Status Under the FLSA Recently Became Easier

By Bruce M. Luchansky, Esq. Introduction Employers in Maryland and Washington, D.C. face complex legal challenges—particularly when it comes to wage and hour compliance. One critical issue is whether an employee is properly classified as exempt from overtime under the Fair Labor Standards Act (FLSA). A recent Supreme Court decision has made defending that classification significantly easier for employers. Understanding Exempt Status Under the FLSA, certain employees are exempt from overtime requirements. Typically, this includes employees who: These employees are not entitled to overtime pay for hours worked beyond 40 in a workweek. When Exempt Status Is Challenged Problems arise when an employee disputes their classification. For example, a Project Manager may argue that their primary duties are not truly managerial or administrative. If that employee files a lawsuit seeking unpaid overtime, the employer bears the burden of proof. This raises an important question: 👉 What standard must the employer meet to prove the employee is properly classified as exempt? The Legal Standard—Before and After Historically, the answer depended on where the case was filed. Before 2025, some federal courts—including the Fourth Circuit (which covers Maryland)—required employers to meet a “clear and convincing evidence” standard. This is a high bar, typically reserved for serious matters like fraud, where facts must be proven to be highly probable. Other courts applied a lower standard: 👉 “Preponderance of the evidence” Under this standard, the employer only needs to show that it is more likely than not (i.e., just over 50%) that the employee is exempt. The Supreme Court’s Decision In E.M.D. Sales, Inc. v. Carrera, 604 U.S. 45 (2025), the United States Supreme Court resolved this split. The Court held that: 👉 The correct standard is preponderance of the evidence. In doing so, the Court rejected the higher “clear and convincing” standard previously applied in some jurisdictions. Why This Matters This decision is significant for employers—especially in Maryland. By lowering the burden of proof: The Court also noted that other major employment law claims—such as discrimination cases under Title VII—already use the preponderance standard, reinforcing consistency across legal frameworks. Final Takeaway While this decision is favorable to employers, wage and hour compliance remains complex. 👉 Proper classification still matters.👉 Documentation and job duties still matter. The ruling makes it easier to defend classifications—but it does not eliminate risk. How Luchansky Law Can Help If you are classifying employees as exempt—or facing a challenge to that classification—experienced legal guidance is essential. Luchansky Law can help you navigate the complexities of the FLSA and minimize risk.

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topline Apr 20 No Comments
Security Clearance

All Remote Work and No Remote Play

By Alan Glickman Introduction There was a time when polite conversation avoided topics like politics, religion, and finances. Today, you can add one more to the list: Remote work. Few workplace topics generate as much debate—or as many strong opinions—on both sides. The Remote Work Debate The arguments are familiar and ongoing. Employees often point out that remote work: Employers, on the other hand, emphasize: And so, the debate continues—back and forth—with no clear resolution. What This Debate Is Really About Beneath all of these arguments lies a deeper issue: Trust. Employers may question whether employees are performing at the expected level without direct supervision. Employees, in turn, often sense that lack of trust—and respond accordingly. In some cases, that response takes the form of what is known as “malicious compliance”: following the letter of the rules, but not their spirit. Accountability vs. Trust At first glance, accountability and trust may seem like opposing forces. In reality, they are not. Experienced employers understand that: These elements do not compete—they reinforce each other. The Real Solution: Clear Policies The key issue is not whether work is remote or in-office. The key is how work is defined, measured, and managed. Employers should focus on: When expectations are clear and consistently enforced, the location of the work becomes far less significant. Practical Scenarios When an Employee Requests Remote Work Start with your policies. If the request falls within an approved category—such as a reasonable accommodation—then it should be granted. When an Employee Is Not Performing Treat it as you would any other performance issue. Remote work does not change the standard—it only changes the setting. When You Cannot Tell Whether Work Is Being Done This is where many employers struggle. If you cannot determine whether an employee is performing, the issue is not remote work—it is your performance framework. Why Metrics Matter Clear, objective metrics eliminate ambiguity. Instead of saying: “I think this employee isn’t working hard enough,” you can say: “The employee failed to meet defined performance targets over a measurable period.” That shift removes subjectivity and strengthens decision-making. Final Takeaway Remote work is not the real issue. Clarity is. When employers: …they create an environment where both accountability and trust can thrive. At that point, the remote versus in-office debate becomes far less important. How Luchansky Law Can Help If your company needs assistance evaluating policies, structuring performance standards, or ensuring compliance with employment laws, Luchansky Law can provide the guidance you need.

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topline Apr 20 No Comments
Security Clearance

Demystifying Security Clearances

By Alan Glickman, Esq. Introduction Security clearances often bring to mind images of espionage—martinis, secret missions, and classified intelligence. But in reality, the process is far more structured, regulated, and—let’s be honest—bureaucratic. If your career is taking you into a role that requires access to classified information, understanding how the process works is essential. How the Process Begins: Employer Sponsorship Whether you are working directly for a government agency or as a contractor, the process always begins the same way: 👉 You must be sponsored by an employer. You cannot apply for a security clearance on your own. It must be tied to a position that requires access to classified information—whether at the Confidential, Secret, or Top Secret level. The SF-86: Your Life on Paper Once sponsored, you will complete the Standard Form 86 (SF-86) through the government’s e-QIP system. This is where things get serious. The SF-86 requires detailed information about: In short, it is a comprehensive snapshot of your life. And while it may feel exhaustive, it is only the beginning. For higher-level clearances, the scrutiny increases significantly. Additional steps may include: All of this information is evaluated under the Adjudicative Guidelines for National Security Eligibility. If everything checks out, your clearance is granted. What Happens If You Are Denied? Not every application is approved. If your clearance is denied—or later revoked—you will receive a Statement of Reasons (SOR) outlining the government’s concerns. Responding to a Denial Once you receive the SOR, time is critical. You typically have 20 to 30 days to respond in writing. Your response should: This step is your opportunity to clarify and mitigate concerns before a final decision is made. The Appeals Process Depending on the agency, you may also request a hearing before an administrative judge, such as through the Defense Office of Hearings and Appeals (DOHA). If necessary, you may appeal further to an agency review board. However, keep in mind: 👉 Appeals are based on existing evidence—you generally cannot introduce new facts at that stage. How Long Does It Take? The process is not quick. Approval timelines can range from: If appeals are involved, the timeline can extend even further. Final Takeaway Security clearances are not just about qualifications—they are about trust, transparency, and risk evaluation. The process is detailed, demanding, and often lengthy—but understanding each step can help you navigate it more effectively. How Luchansky Law Can Help If you are applying for a position that requires a security clearance—or responding to a Statement of Reasons—experienced legal guidance can make a critical difference. Luchansky Law can assist with:

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topline Apr 20 No Comments

Employee or Independent Contractor: The DOL Issues a New Proposed Rule

By Bruce M. Luchansky, Esq. Introduction Employers in Maryland and Washington, D.C. face increasing complexity when it comes to classifying workers. A new proposed rule from the U.S. Department of Labor (DOL) aims to bring more clarity—and potentially shift how businesses approach this critical issue. What Changed? On February 26, 2026, the DOL’s Wage and Hour Division issued a Notice of Proposed Rulemaking (NPRM) addressing worker classification under the Fair Labor Standards Act (FLSA). If finalized, the rule would: The goal is simple: make it easier to distinguish between employees and independent contractors. Why Classification Matters The distinction is critical. Misclassification can lead to significant legal and financial risk. The “Economic Reality” Test The proposed rule centers on the economic reality test, which asks: 👉 Is the worker economically dependent on the employer, or truly operating an independent business? To answer that question, the DOL emphasizes two core factors: 1. Control The degree to which the employer controls how the work is performed. 2. Opportunity for Profit or Loss Whether the worker can increase earnings through initiative, investment, or business decisions. These two factors carry the most weight in the analysis. Additional Factors If the core factors are not decisive, other considerations come into play: Importantly, the rule emphasizes real-world practice over written contracts. What actually happens in the working relationship matters more than what is stated on paper. Broader Impact The proposed rule would not only affect the FLSA. It would also apply to: This means classification decisions could have wider legal implications across multiple laws. Why This Matters for Employers This proposed rule is generally viewed as more favorable to employers. The 2024 rule used a broader “totality of the circumstances” approach with multiple equally weighted factors. The new proposal: As a result, employers may have a stronger position when classifying workers as independent contractors. Industries Most Affected This change could significantly impact industries that rely heavily on independent contractors, including: For these sectors, the rule may simplify compliance—but risks still remain. Final Takeaway The rule is not yet final and may change based on public input. However, one thing is clear: 👉 Worker classification remains a high-risk, high-impact decision. Employers should stay proactive, review current classifications, and ensure they align with evolving legal standards. How Luchansky Law Can Help If your company relies on independent contractors, proper classification is critical to avoiding costly legal exposure. Luchansky Law helps businesses navigate classification issues under the FLSA, FMLA, and Maryland law.

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topline Apr 20 No Comments
Uncategorized

When Complaints Become Protected: A Practical Guide to Concerted Activity

By AJ Esral, Esq. Introduction Employers in Maryland and Washington, D.C. face complex legal challenges—especially when it comes to employee complaints. What may seem like a routine workplace issue can quickly turn into a serious legal risk. A Common (and Risky) Scenario Consider this situation: A company issues annual merit-based raises. Two employees casually discuss their bonuses in the breakroom. One questions why the other received more. Management learns of the conversation and disciplines both employees under a handbook policy stating that wage information is “confidential.” So—what’s the problem? 👉 This is likely illegal. Even though: The employer may still face significant legal liability. Why This Matters: Protected Concerted Activity When employees speak with each other about workplace conditions—such as pay, benefits, or schedules—they may be engaging in protected concerted activity. This right is protected under Section 7 of the National Labor Relations Act (NLRA). And importantly: 👉 Employers cannot discipline, terminate, or threaten employees for engaging in it. Concerted This means employees are acting: This can include discussions about: Activity This includes a wide range of behavior, such as: Even “Bad Behavior” Can Be Protected Here’s where many employers get caught off guard: Even conduct that appears inappropriate—such as profanity or disrespect—may still be protected if it occurs in the context of concerted activity. That doesn’t mean anything goes, but the threshold for discipline becomes much higher. Real-World Legal Examples Recent cases show how broad these protections can be: How Employers Can Protect Themselves To reduce risk, employers should take a proactive approach: 1. Review Your Policies Make sure your policies do not unintentionally restrict employees from discussing: Overly broad policies are one of the most common violations. 2. Pause Before Disciplining Ask yourself: Reacting too quickly can create liability. 3. Train Your Managers Supervisors should understand: Important Reminders Protected concerted activity still applies even if the employee is: Final Takeaway This is one of the most commonly violated areas of employment law—and one of the least understood. What feels like a minor workplace issue can quickly escalate into a legal problem if mishandled. Understanding when complaints are legally protected is critical to avoiding costly mistakes. How Luchansky Law Can Help If you need help reviewing your policies or ensuring compliance with Section 7 of the NLRA, Luchansky Law can help you navigate these issues with confidence.

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topline Apr 20 No Comments
Uncategorized

When Off-Duty Behavior Follows Employees Back to Work

By AJ Esral, Esq. Introduction Employers in Maryland and Washington, D.C. face complex legal challenges—especially when employee conduct outside the workplace begins to affect the workplace itself. One of the most common questions is: Can you discipline or terminate an employee for behavior that happens off duty? A Real-World Scenario Imagine this: A warehouse supervisor disciplines an employee for repeated safety violations and insubordination. The employee claims unfair treatment and, after an unsuccessful internal complaint, becomes increasingly fixated on the supervisor and a coworker. One evening, outside of work, the employee encounters the supervisor at a supermarket. The situation escalates quickly—verbal threats turn into physical violence. By Monday: The key question becomes urgent: 👉 Can the company lawfully terminate the employee—even though the conduct occurred off duty? The Short Answer: Yes (In Most Cases) In Maryland, the answer is very likely yes. Maryland is an at-will employment state, meaning employers can terminate employees for almost any reason—so long as it does not violate a clear mandate of public policy. Courts have emphasized that this exception is narrow, not broad. This means: Threatening or violent conduct tied to workplace relationships generally meets that standard. When Off-Duty Conduct Becomes a Workplace Issue Maryland law does not require misconduct to happen at work to justify discipline. Instead, the key question is whether there is a connection—or “nexus”—between the conduct and the workplace. This principle comes from long-standing case law. The “Nexus” Test Courts look at whether off-duty conduct is sufficiently connected to the employer’s interest in maintaining a safe and functional workplace. In Employment Security Board v. LeCates, the court established that the focus is on this connection—not simply where or when the conduct occurred. This idea was further clarified in Fino v. Maryland Employment Security Board, which made an important distinction: Real Legal Applications Courts have consistently upheld discipline when off-duty conduct directly impacts the workplace: The takeaway is clear: 👉 If off-duty behavior creates fear, disruption, or risk in the workplace, employers can act. What Employers Should Do Even when termination is justified, how you act matters. Employers should: Acting too slowly—or without proper documentation—can weaken your position. Final Takeaway Off-duty conduct is not automatically irrelevant. When that conduct: …it becomes a legitimate business concern. In those cases, Maryland law gives employers broad authority to act decisively. Sometimes, termination is not only lawful—it is the most responsible course of action. How Luchansky Law Can Help Luchansky Law helps employers make defensible, strategic decisions—often under urgent circumstances—before situations escalate.

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topline Apr 20 No Comments
Uncategorized

AJE PTO – What Employers Need to Know

By AJ Esral Introduction Employers in Maryland and Washington, D.C. face complex legal challenges when it comes to managing employee leave. One of the most common—and confusing—topics is paid time off (PTO). How much should you offer?What are you legally required to provide?Can you impose restrictions like blackout dates or notice requirements? Employers have a lot of questions. Understanding What “PTO” Really Means Here’s the key issue: what many employers call “PTO” is actually three separate categories of leave, each governed by different rules: Understanding the differences is essential to staying compliant—and avoiding costly mistakes. Sick and Safe Leave (SSL) The only paid leave Maryland employers are legally required to provide is sick leave. Yes—only sick leave is mandatory. Under the Maryland Sick and Safe Leave Act: Any paid leave beyond this is completely optional. Key Rules for Sick Leave Because this leave is legally required, it comes with strict rules: Use restrictions Accrual vs. frontloading Probation period No strict restrictions Job-Protected Unpaid Leave Beyond sick leave, employers may also be required to provide unpaid, job-protected leave. The Two Main Laws 1. Family and Medical Leave Act (FMLA) 2. Maryland Parental Leave Act (MPLA) Employers may require employees to use PTO concurrently—but must still protect their job. Important Caveats Job protection is not absolute. ⚠️ However, caution is critical:Employees often view FMLA as highly protected, and missteps can quickly lead to complaints or lawsuits. Additional Leave Categories Employers should also be aware of: Additional PTO (What You Control) Once you meet legal requirements, everything else is up to you. Additional PTO is entirely voluntary—and that gives you flexibility. You decide: Common Practices Many companies: But these are business decisions—not legal requirements. The Bottom Line Here’s what many employers miss: 👉 Anything beyond sick and safe leave is optional. That means: Well-drafted, clearly communicated policies are essential to avoid confusion and legal risk. Final Thoughts Managing PTO isn’t just about offering benefits—it’s about understanding your obligations and controlling your risk. A clear, strategic approach ensures compliance while giving your business the flexibility it needs. How Luchansky Law Can Help If you need help designing, reviewing, or updating your PTO policy, Luchansky Law can help ensure your approach is both compliant and effective.

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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. When Preparation Isn’t Enough You took the right first step: working with counsel to ensure your employees signed carefully drafted restrictive covenant agreements. That step protects your business—on paper. But when an employee leaves and you suspect a violation of a non-compete, non-solicitation, or confidentiality provision, preparation alone is not enough. In Maryland, enforcement often requires swift and strategic action, sometimes in the form of an injunction to stop misconduct before damage is done. Effective enforcement generally involves three phases: Understanding these stages allows your business to respond quickly and effectively when a covenant is at risk. Before an Employee Departs Enforcement begins before the employee even leaves. During the departure process, employers should: Taking these steps reduces exposure and strengthens your position if enforcement becomes necessary. Early involvement of experienced counsel is critical. Courts consider how quickly a company acts after discovering misconduct. Delays can weaken both credibility and urgency—two key factors when seeking injunctive relief. Taking Legal Action Once the facts are established, the employer must decide how to proceed. Cease-and-Desist Letters Often, the first step is a cease-and-desist letter, which: These letters can: When Litigation Becomes Necessary In some cases, litigation is unavoidable. The decision to file suit should be strategic and consider: When litigation is pursued, employers often seek both damages and injunctive relief. Understanding Injunctive Relief The primary goal of an injunction is simple: stop the violation immediately. There are three types: While they differ in timing and evidentiary requirements, they all serve the same purpose—halting harmful conduct. To obtain injunctive relief, an employer must demonstrate: The Importance of Evidence Courts consider injunctions to be extraordinary remedies, meaning they are not granted lightly. Employers must present strong evidence, including: Courts will look for harm that is: Loss of goodwill, client relationships, or trade secrets often meets this standard because it is difficult to quantify. Final Thoughts Restrictive covenants require more than careful drafting to be effective. Whether through negotiation or litigation, Maryland employers must be prepared to act when violations arise. Swift evaluation and decisive action can mean the difference between contained risk and lasting damage. Preparation creates protection—but enforcement makes it real. How Luchansky Law Can Help The attorneys at Luchansky Law have extensive experience enforcing restrictive covenants, including non-compete, non-solicitation, and confidentiality agreements. To discuss how to protect your business:

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topline Apr 20 No Comments
Trade Secrets

AL — Trade Secrets | Employment Lawyer Maryland

Introduction Protecting Your Company’s Competitive Edge: Trade Secrets, Confidentiality, and Employment Restrictive Covenants By: Ari Lichterman, Esq. We live in a data-driven, information-based world. It is no surprise, then, that for many companies, their most valuable asset is information—such as customer lists, pricing strategies, internal business processes, and proprietary technology. This information often defines a company and provides its competitive advantage. Employees frequently have access to this information and rely on it to perform their work. However, when an employee leaves for a competitor—or starts a competing business—the risk of that information being taken or misused becomes significant. For employers, well-drafted restrictive covenants that ensure confidentiality and protect trade secrets play a critical role in safeguarding a company’s competitive edge. Understanding how trade secrets are defined, and what steps businesses can take to protect them, is essential. What Is a Trade Secret? All companies have confidential business, financial, or technical information that can be protected through confidentiality or non-disclosure agreements. However, if this information qualifies as a trade secret, it is entitled to heightened statutory protection beyond contractual safeguards. In simple terms, a trade secret is confidential business information that provides a competitive advantage because it is not known by others and cannot be easily discovered. Under Maryland law, the Maryland Uniform Trade Secrets Act (“MUTSA”) defines a trade secret as business information—such as a formula, process, program, method, or compilation of data—that: Md. Code Ann., Com. Law § 11-1201(e). Federal law provides a similar definition under the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1839(3), which includes financial, business, scientific, technical, or engineering information that: Although DTSA provides broader examples (e.g., patterns, plans, designs, prototypes, techniques, procedures, or codes), courts generally treat both definitions similarly. Examples of Trade Secrets In practice, trade secrets may include: However, simply labeling information as “confidential” does not make it a trade secret. Employers must demonstrate: Courts will evaluate factors such as industry knowledge, development cost, difficulty of duplication, and the company’s efforts to maintain secrecy. Misappropriation: When Confidential Information Is Taken or Used Importantly, misappropriation can occur even before the information is used, as long as it was acquired improperly. Employers may seek: For example, suspicious data downloads, copying files before resignation, or sharing confidential information with competitors may support a claim. Important Exception DTSA includes an immunity provision allowing disclosure of trade secrets to a government official or attorney solely for reporting or investigating legal violations, or for use in litigation.18 U.S.C. § 1833. If this applies, there is no liability under DTSA or MUTSA. Why Restrictive Covenants Still Matter Even when trade secret laws do not apply, employers can rely on restrictive covenant agreements to protect sensitive information. Well-drafted agreements: These agreements are especially valuable because they: Importantly, they also help demonstrate that the employer took reasonable steps to protect its information—a key requirement for trade secret protection. Protecting Your Business Before Problems Arise The misuse of trade secrets and confidential information can cause significant—and sometimes irreversible—damage to a business. Employers who proactively implement well-crafted restrictive covenants place themselves in the best position to: The attorneys at Luchansky Law are experienced in drafting and enforcing restrictive covenants to protect your business interests while minimizing legal and competitive risk. For more information, contact Luchansky Law at 410.522.1020 or email 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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themodernfirm Apr 17 No Comments

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