Judicial Review of Unemployment Insurance Determinations
An aggrieved party may appeal a final
decision of the Board of Appeals ("Board") of the Department of
Labor, Licensing and Regulation to the circuit court. Md. Labor
& Empl. Code Ann. § 8-512(a) (1991 & Supp. 1995). When
the Board declines to review the decision of its hearing examiner,
the hearing examiner's decision is considered a decision of the
Board. LE § 8-806(h)(4). In those cases, the circuit court will
review the hearing examiner's decision.
Board decisions are reviewed on the
administrative record. LE § 8-512. Confined to the record, the
circuit court has no jurisdiction to accept additional evidence
or make its own findings of fact. Juiliano v. Lion's Manor
Nursing Center, 62 Md. App. 145, 150 n.2, 488 A.2d 538, 541
n.2 (1985). The administrative record is kept in accordance with
the requirements of Md. State Gov't Code Ann. §10-218 (1995).
See, LE § 8-506(d). By statute, the agency may not charge claimants
for costs associated with compiling the record. LE § 8-512(a)(3).
Employers who appeal, however, are charged transcription and photocopying costs.
Board decisions are generally exempt
from the Administrative Procedure Act ("APA"), except as specifically
provided in the Labor & Employment Article. SG § 10-203(a)(5).
Rather than appearing in the APA, the scope of review of an unemployment
insurance determination is found in LE § 8-512. As a result, the
APA provisions, like that which allows a circuit court to order
the agency to take additional evidence when the appellant offers
good reasons for not offering the evidence below, do not apply
to unemployment insurance appeals. SG § 10-222(f). Aside from
a few of these distinctions, the standard of review of an unemployment
benefits determination is the same in substance as the standard
of review for all final decisions of an administrative agency.
The substantial evidence test applies.
The Court of Appeals summed up the
deference owed to administrative adjudications:
Whichever of the recognized tests
the court uses - substantiality of the evidence on the record
as a whole, clearly erroneous, fairly debatable or against the
weight or preponderance of the evidence on the entire record -
its appraisal or evaluation must be of the agency's fact-finding
results and not an independent estimate of or decision on the
evidence. The required process is difficult to precisely articulate
but it is plain that it requires restrained and disciplined judicial
judgment so as not to interfere with the agency's factual conclusions
under any of the tests, all of which are similar. There are differences
but they are slight and under any of the standards the judicial
review essentially should be limited to whether a reasoning mind
reasonably could have reached the factual conclusion the agency
reached. This need not and must not be either judicial fact-finding
or a substitution of judicial judgment for agency judgment.
Baltimore Lutheran High School
Ass'n. v. Employment Sec. Admin., 302 Md. 649, 663, 490 A.2d
701, 708 (1985) (quoting Insurance Commissioner v. National
Bureau, 248 Md. 292, 236 A.2d 282 (1967)). Credibility determinations
are factual in nature and cannot be easily second-guessed from
a cold transcript. The circuit court, therefore, cannot make contrary
credibility determinations. Board of Appeals v. Mayor and
City Council, 72 Md. App. 427, 530 A.2d 763 (1987). The court
will not reweigh the evidence; evidence is substantial if it is
"such evidence as a reasonable mind might accept as adequate to
support a conclusion." Baltimore Lutheran High School Ass'n.,
302 Md. 663, 490 A.2d 708. Because a factual finding can be clearly
wrong and still be reasonable, the test of an administrative determination
in the circuit court "is reasonableness, not rightness." Bulluck
v. Pelham Woods Apartments, 283 Md. 505, 390 A.2d 1119 (1978).
The judiciary not only eschews acting as the trier of fact, it
avoids applying the law to the facts, characterizing a "question
of mixed law and fact" as a task for the Board. As the Court of
Appeals has noted, in the unemployment insurance field, the legislature
expressly delegated to the administrative agency the responsibility
of applying the facts to the law.
That the Legislature was relying on the expertise of the agency in this regard
is clearly evident from the language of subsection (a) "[i]f
the Executive Director finds that the individual's unemployment
is due to his leaving work voluntarily without good cause,"
and "according to the seriousness of valid circumstances
as determined in each case by the Executive Director . . ."
Board of Education of Montgomery
Co. v. Paynter, 303 Md. 22 at 28, 491 A.2d 1186 at 1189 (1985).
(emphasis in the original). As such, judicial deference extends
not only to the Board's fact findings, but also to its legal conclusions.
Baltimore Lutheran, 302 Md. at 663, 490 A.2d at 708; Paynter,
303 Md. at 36, 491 A.2d at 1195. It is the province of the Board
to draw inferences even where the inferences resolve the "ultimate
question," i.e. whether the claimant, for example, "voluntarily
quit" his employment or was discharged for "gross misconduct."
Paynter, 303 Md. at 39, 491 A.2d at 1194, 1195. In Maryland,
the judiciary does not substitute its judgment for that of the
administrative agency even on the "ultimate question," the legal
significance of the found facts.
In contrast, the court has always
reserved to itself the right to determine questions of law. Errors
of law appear to include cases when the agency fails to "recognize[
] the . . . relevant criteria statutorily prescribed," fails to
"comprehend[ ] the legal substance of the appropriate test" or
"misapplies its precepts." Paynter, 303 Md. 22, 491 A.2d
1186; Ramsay, Scarlett & Co., Inc. v. Comptroller of the
Treasury, 302 Md. 825, 490 A.2d 1296 (1985).
A good example of the distinction
between questions of law (in the purview of the judiciary) and
mixed questions of law and fact (in the purview of the Board)
is found in Employment Sec. Admin. v. Baltimore Lutheran High
School Ass'n., 291 Md. 750, 436 A.2d 481 (1981) ("Lutheran
H.S. I."). The Court of Appeals decided as a question
of law, what factors the Board should consider when determining
whether a church-affiliated school is "operated primarily for
religious purposes." After a remand, the case again reached the
Court of Appeals. The Court held that, because the Board 'followed
the standard and applied the factors we set out in Lutheran
H.S. I.,' the Board made no error of law." Baltimore Lutheran
High School Ass'n. v. Employment Sec. Admin., 302 Md. 649,
490 A.2d 701 (1985).
The line between judicial functions
and agency functions begins to blur when the agency makes an initial
interpretation of a statute or regulation. In that case, the reviewing
court will give weight to the agency interpretation. Westinghouse
v. Callahan, 105 Md. App. 25, 34, 658 A.2d 1112, 1116 (1995).
The Board's view of its organic and governing statutes, although
not binding, is entitled to deference because of the Board's expertise
in its field. See, Sinai Hospital v. Department of Empl. and
Training, 309 Md. 28, 46, 522 A.2d 382, 391 (1987). Its interpretation
of regulations is also viewed deferentially. "Upon appellate review,
courts bestow special favor on an agency's interpretation of its
own regulation." Department of Health and Mental Hygiene v.
Reeders Mem'l Home, Inc., 86 Md. App. 447, 586 A.2d 1295 (1991).
Recently, the viability of a Board-created
doctrine, under LE § 8-1001 (voluntarily leaving work), was treated
as a question of law by the Court of Special Appeals. Department
of Economic & Empl. Dev. v. Taylor, 108 Md. App. 250,
671 A.2d 523 (1996). The Court recognized the deference it owed
to an agency's construction of a statute but noted that the deference
ended when the construction is found to be inconsistent with the
terms of the statute. Taylor, 108 Md. App. 250, 671 A.2d 523.
A few older cases have held that administrative determinations
that rest upon "undisputed facts," provide pure "questions of
law" for the judiciary to decide. MEMCO v. Maryland Empl.
Sec. Admin., 280 Md. 536, 375 A.2d 1086 (1977); Employment
Sec. Board v. Maryland Deliveries, Inc., 204 Md. 533, 105
A.2d 240 (1954). No recent unemployment insurance case has so
held and the Court of Appeals has expressly declined to consider
a case with undisputed facts as presenting a "question of law."
Paynter, 303 Md. at 38-39, 491 A.2d at 1194-1195.
Finally, the substantial evidence test is only applied in the
"absence of fraud." If fraud has tainted the agency's fact finding
and the parties have preserved their rights to raise the issue,
fraud may be a basis for a remand LE § 8-512; Juiliano v.
Lion's Manor Nursing Home, 62 Md. App. 145, 488 A.2d 538 (1985).
LE § 8-101. Definitions.
The term "wages" as defined in LE
§ 8-101(v) does not include payments to laid off employees who,
during the period they received the payments, did not perform
their usual jobs and whose activities at the employer's job resource
center were not intended to benefit the employer. Westinghouse
v. Callahan, 105 Md. App. 25, 658 A.2d 1112 (1995).
LE § 8-102. Legislative Findings and Policy.
Maryland's unemployment insurance
law is remedial in nature and is intended to prevent economic
insecurity and alleviate the consequences of involuntary unemployment
and economic stress. LE § 8-102; Allen v. CORE Target City
Youth Program, 275 Md. 69, 75, 338 A.2d 237, 241 (1975). The
unemployment insurance law is read liberally in favor of eligibility;
disqualification provisions are strictly construed. Sinai
Hospital v. Department of Empl. and Training, 309 Md. 28,
40, 522 A.2d 382, 388 (1987). A circuit court may not invoke these
considerations, however, to "read into the statute what is plainly
not there" and award benefits when there is a clear legislative
intent to the contrary. Taylor v. Department of Empl. and
Training, 308 Md. 468, 473, 520 A.2d 379 (1987); Maryland
Department of Empl. Sec. v. Werner, 231 Md. 474, 190 A.2d 786 (1963).
By declaring that the unemployment
insurance funds be distributed "for the benefit of persons unemployed
through no fault of their own," the legislature did not establish
an affirmative disqualification for "fault" in addition to the
express disqualification provisions found in the act. Allen
v. CORE Target City Youth Program, 275 Md. 69, 75, 338 A.2d
237, 241 (1975). By rejecting an amorphous "fault" disqualification,
the Court held that each claimant be disqualified, if at all,
under the express provisions of LE §§ 8-1001 (voluntarily leaving
work), 8-1002 (gross misconduct), 8-1002.1 (aggravated misconduct)
or 8-1003 (misconduct), among others.
LE § 8-205. Independent Contractors.
Independent contractors are outside
the scope of the unemployment insurance statutes and may not draw
unemployment benefits. In turn, one who hires an independent contractor
is not required to pay unemployment insurance tax contributions.
Employment is presumed to be covered employment subject to the
unemployment insurance statutes. The burden is on the employer
to prove otherwise by demonstrating that all three criteria in
LE § 8-205 are satisfied. An employee cannot be transformed into
an independent contractor by contract, agreement or fiat. The
agency may look through the "tag" the employer has placed on the
employment relationship and "determine, as a matter of fact, whether
the relationship (regardless of what it may be called) comes within
the statute." Warren v. Board of Appeals, 226 Md. 1, 14,
172 A.2d 124, 129 (1961).
In Dept. of Empl. Sec. v. Charlie's
Barber Shop, 230 Md. 470, 187 A.2d 695 (1963), a "master barber"
rented chairs in his shop to other barbers. Under the terms of
the lease, each barber was to pay the master barber a weekly sum
of $5.00 for tonics and linens. Each barber-lessee had access
to the chair during normal working hours, but was under no duty
to report to work. Each lessee was free to set his own prices
and to keep all fees and tips, with no accounting to the master
barber. Each lessee had his own key to the shop, his own name
posted behind his chair, and his own price list and business card.
Each lessee furnished his own tools and paid his own federal income
tax and self-employed Social Security tax. Dept. of Empl.
Sec. v. Charlie's Barber Shop, 230 Md. 470, at 473, 187 A.2d
at 695 at 696-97 (1963). Despite the apparent autonomy of the
lessee-barbers, the Court held them to be employees because they
were subject to "control and direction."
As to freedom
of control or direction it appears that appellee [master
barber] could not tell the other barbers how to provide
services for a customer, nor could he control their working
hours. It also appears that the contract of lease could
not be broken by appellee if he no longer wished to have
one of the barbers work in the shop, except for the clause
that states they must work 'in harmony' with the others.
It would be unrealistic to believe that he could not 'fire'
one of the barbers if he found it necessary to do so in
order to protect the business patrons of the shop, particularly
in the face of no applicable standards of what is to constitute
'harmony.' .... We feel that there is no absence of control
or direction so as to satisfy [the statutory predecessor
to LE § 8-205(1)].
Dept. of Empl. Sec. v. Charlie's
Barber Shop, 230 Md. 470, at 475-76, 187 A.2d 695 at 698 (1963).
See also, Blue Bird Cab Co. v. Department of Empl. Sec.,
251 Md. 458, 248 A.2d 331 (1968) (holding that cab drivers under
a lease agreement with a cab company were under the control of
the cab company and consequently were employees. The drivers had
to pay for cab damage, could not sublet the cabs, and had to adhere
to "minimum standards of operation and cleanliness.") NOTE:
Although the independent contractor statute remains virtually
unchanged since these cases were decided, the rules governing
taxicab drivers and barbers have been altered by statute. LE § 8-206.
LE § 8-208. Charitable,
Educational, Not for Profit, and Religious Organizations
Church-affiliated schools that have
no legal identity separate from the church are exempt from paying
an unemployment tax contribution on their employees. Employment
Sec. Admin. v. Baltimore Lutheran High School Ass'n., 291
Md. 750, 436 A.2d 481 (1981). Their employees, in turn, cannot
claim unemployment benefits. A school with a separate legal identity
from the church must establish that the school is operated primarily
for religious purposes and that the school is controlled by the
church. The Court of Appeals identified certain factors the Board
may consider when determining whether the school is operated primarily
for religious purposes, including:
|1) Interrelationship between affiliation with the church and
||a) Composition of governing board.
b) Degree of supervision by church.
c) Sources of financial support.
|2) Extent of religious indoctrination.
||a) Stated purpose.
b) Extent of encouragement of spiritual development.
c) Composition of student body.
d) Extent of religious exercises.
e) Extent of prayer in the classroom.
f) Extent of religion or theology classes.
g) Degree of intellectual freedom in nontheology classes.
h) Composition of faculty.
i) Degree of academic freedom.
Employment Sec. Admin. v. Baltimore
Lutheran High School Ass'n., 291 Md. at 761, 436 A.2d 481.
Work performed by ordained ministers in the exercise of their
ministry is exempt from the unemployment insurance laws, notwithstanding
that their school-employer has a separate legal identity from
the church or is not operated primarily for religious purposes.
See, Baltimore Lutheran High School Ass'n. v. Employment Sec.
Admin., 302 Md. 649, 490 A.2d 701 (1985).
LE § 8-209. Commission Sales.
Work that an insurance agent performs
for payment solely by commission is not covered employment. LE
§ 8-209. Consequently, the insurance agency is not required to
pay unemployment insurance tax contributions and the insurance
agent may not claim unemployment benefits. In reading this statute,
the Court of Appeals afforded the word "solely" its plain meaning.
The Court held that insurance agents who received an automatic
$10 weekly allowance for car expenses were engaged in covered
employment. The car allowance was unrelated to sales volume or
the actual expenses of running a car. Therefore, its payment meant
that the agents' compensation was not "solely" by commission.
People's Life Insurance Co. v. Maryland Department of Empl.
Sec., 256 Md. 350, 260 A.2d 287 (1970). The Court, in dicta,
intimated that insurance agents who received minimum commissions
or advance temporary commissions were also engaged in covered employment.
LE § 8-801. Unemployment Status.
As a threshold matter, only those
actually unemployed may draw unemployment benefits. LE § 8-801.
An individual is unemployed in any week in which he or she does
not perform work for which wages are payable. LE § 8-801(b)(1).
Wages are defined as compensation for "personal services." LE
§ 8-101(v). In 1995, the Court of Special Appeals affirmed the
Board's determination that payments made to individuals in weeks
when they performed no personal services did not constitute wages
and that the recipients of such payments remained "unemployed"
within the meaning LE § 8-801. Westinghouse v. Callahan,
105 Md. App. 25, 658 A.2d 1112 (1995).
As part of a reduction-in-force,
Westinghouse notified many of its employees that their
positions were permanently terminated. The employees received
their usual pay for their final sixty days and were provided the
use of a job resource center. The employees were not required
to utilize the job resource center and were not able or expected
to perform their usual jobs. The Board determined that the employees
were not performing personal services for Westinghouse and, as
a result, their pay did not constitute wages. Accordingly, the
claimants were found to be immediately eligible for unemployment
benefits. The Court of Special Appeals agreed, holding that the
claimant's activities at the resource center were not to benefit
Westinghouse and that the payments received by the claimants did
not make them employed. Westinghouse v. Callahan, 105
Md. App. at 41, 658 A.2d 1112.
LE § 8-802. Wages for Covered Employment.
To be monetarily eligible to receive
unemployment benefits, a claimant must have sufficient base period
earnings. The Court of Appeals has affirmed the Board's determination
that the wages must be paid, not earned, during the base period.
Wages are allocated to the base period quarter in which they are
paid, not earned. Maryland Department of Empl. Sec. v. Werner,
231 Md. 474, 190 A.2d 786 (1963).
A claimant who does not have sufficient
base period wages may still be awarded benefits in certain circumstances.
Department of Economic & Empl. Dev. v. Lilley, 106
Md. App. 744, 666 A.2d 921 (1995). In Lilley, the Court
of Special Appeals held that despite the absence of any express
statutory or regulatory basis, the Board had inherent power to
backdate an employee's claim to a period in which he had sufficient
base period wages. Lilley worked for Westinghouse until he was
laid off as part of the company's mass reduction in force. At
the time of his termination, Lilley was on total disability. Based
on a conversation with a Westinghouse employee, Lilley did not
file for benefits at the time of termination. Almost a year later,
Lilley's physician found him able to work and Lilley applied for
unemployment benefits. Lilley was disqualified because, due to
the lengthy period during which he did not work, he did not have
wages in his base period to make him monetarily eligible to receive
benefits. Lilley argued that he did not apply for benefits at
the time of his termination when he was monetarily eligible because
Westinghouse knowingly deceived him by telling him he was not
eligible to "even file for unemployment insurance" due to his
disability. Based on this alleged violation of LE § 8-1302 (forbidding
an employer to make a false representation to prevent the payment
of unemployment benefits) , Lilley asked the Board to backdate his claim.
COMAR authorizes an applicant's claim
to be backdated in seven specific situations. None of these situations
allows for backdating when an employee fails to file a claim in
reliance on a misrepresentation by an employer. This notwithstanding,
the Court of Special Appeals held that the Board had the discretion
to backdate claims and award Lilley benefits under these circumstances.
The Court found that this power was "implied in the purpose and
structure of unemployment law." The power was found to be consistent
with the overall remedial purpose of the unemployment insurance
law and with the broad authority the legislature granted the agency
to administer the unemployment insurance program.LE § 8-903.
LE § 8-903. Ability to Work and Availability for Work.
I. Availability for Work.
To be eligible for unemployment benefits, a claimant must be available
for work in every week in which he or she files a claim. The question
of availability often arises in the context of a claimant who
will accept work only with certain conditions or limitations.
The Court of Appeals has held that a claimant who "restricts the
hours during which she is willing to work" is not fully "available
for work," if the limited hours are not usual and customary in
the claimant's occupation. Robinson v. Maryland Empl. Sec.
Board, 202 Md. 515, 97 A.2d 300, 301-02 (1953) (holding that
waitress who was only willing to work from 11:00 a.m. to 3:00
p.m. had so "restricted her utility and desirability in the labor
market" that she was not available for work).
The agency may waive the requirement that an individual be available
for work for those who enter an approved job training program.
LE § 8-903(c). However, one who quits his job to enter into the
job training program will be disqualified for voluntarily leaving
work under LE § 8-1001. Berdych v. Department of Empl. &
Training, 69 Md. App. 484, 518 A.2d 462 (1986); but cf. LE
§ 8-1001 (b)(2) (mitigating the holding of Berdych to
allow certain individuals who voluntarily leave work to enter
job training programs to receive unemployment benefits.)
II. Actively Seeking Work.
A claimant on maternity leave who was fully occupied in taking
care of her child and who did nothing to find employment other
than to "watch the ads" was not available for, or actively seeking,
work. Maryland Empl. Sec. Board v. Poorbaugh, 195 Md.
197, 72 A.2d 753 (1950). A claimant need not, however, comb the
globe for work. In Employment Sec. Admin. v. Smith, 282
Md. 267, 383 A.2d 1108 (1978), the Court held that a claimant
who, due to a lack of transportation, sought employment almost
exclusively from area businesses met the criteria for actively seeking employment.
LE § 8-1001. Voluntarily Leaving Work.
I. Statutory Requirement of Intent.
In an early case, the Court of Appeals affirmed the Board's determination
that a claimant who stopped reporting to work "because of the
cold weather" voluntarily quit his employment without good cause.
Maryland Empl. Sec. Board v. Poorbaugh, 195 Md. 197, 72
A.2d 753 (1950). In 1975, the Court was again confronted with
the application of the voluntary quit statute. This time the Court
reversed the Board. In Allen v. CORE Target City Youth Program,
275 Md. 69, 338 A.2d 237 (1975), the Board had found that the
claimant, a teacher, had voluntarily quit her employment by allowing
herself to remain unable to perform it. Despite a lengthy preparatory
period and despite being told that she was only expected to impart
"the highlights" of the subjects, the claimant failed to learn
the curriculum she had been hired to teach. Although it was undisputed
that the claimant's "conduct precipitated her severance, based
upon the factual findings that she contumaciously refused to prepare
herself to perform the duties she had undertaken," the Court held
that she did not voluntarily quit her employment.
As we see it,
the phrase, 'due to leaving work voluntarily' has a plain,
definite and sensible meaning, free of ambiguity; it expresses
a clear legislative intent that to disqualify a claimant
from benefits the evidence must establish that the claimant,
by his or her own free will, terminated the employment.
Allen, 275 Md. at 79, 338 A.2d at 243.
A claimant need not submit a formal
resignation or expressly say "I quit" to come within the purview
of LE § 8-1001. Actions may speak as loud as words; a claimant
may voluntarily choose to end her employment relationship by simply
failing to report to work or by deliberately inciting her employer
to fire her. Accordingly, the Board may properly infer the required
intent from the claimant's conduct. One who commits an act she
knowingly intends to result in her discharge has voluntarily left
her employment. Allen, 275 Md. at 79, 338 A.2d at 243;
Department of Economic & Empl. Dev. v. Taylor, 108 Md.
App. 250, 671 A.2d 523 (1996).
II. Constructive Voluntary Leaving.
The Board has described the constructive voluntary quit doctrine
as follows: "When a claimant has failed to abide by a condition
of employment (in this case possession of a valid driver's license)
the absence of which leaves the employer absolutely no choice
but to terminate the claimant's services, the claimant has 'constructively'
voluntarily quit his employment without good cause or valid circumstances."
Taylor, 108 Md. App. at 264, 671 A.2d 523. This situation
should be distinguished from the case where a claimant commits
an act with the intention of being discharged, discussed immediately
above. Under the constructive voluntary quit doctrine, the claimant
does not act with the intent to quit but has committed a voluntary
act that has made it impossible for her to remain employed.
In two cases, the Court of Appeals
discussed the doctrine of "constructive voluntary leaving." In
the Allen case, the Court described "limited circumstances" where, although an employee
was technically discharged, it could be
found that she "constructively" voluntarily quit her employment.
Allen, 275 Md. at 82-83, 338 A.2d 244-45 (citing a Michigan
case where it was held that a taxicab driver voluntarily left
his employment when he caused his motor vehicle license to be
revoked). The Allen Court did not decide the validity
of the constructive voluntary leaving doctrine; it held that the
doctrine was not applicable to the facts before it. In a second
case, Sinai Hospital v. Department of Empl. and Training,
309 Md. 28, 522 A.2d 382 (1987), striking health care workers
refused to return to work after being told they would be permanently
replaced. Although the employer argued that the strikers voluntarily
quit by pursuing a course of conduct (striking) which resulted
in their unemployment, the Court chose not to decide the constructive
voluntary leaving issue but affirmed the Board on the grounds
that the "voluntary leaving work" and "labor dispute" provisions
were mutually exclusive.
In 1996, the Court of Special Appeals
flatly held that the constructive voluntary leaving doctrine does
not exist in Maryland. Department of Economic & Empl.
Dev. v. Taylor, 108 Md. App. 250, 671 A.2d 523 (1996) petition
for cert. granted, No. 58, September Term, 1996, (Md. August 2,
1996). Taylor worked as a laborer for the employer, Frederick
County. A condition of her employment was that she retain a valid
driving permit. Taylor lost her driving permit when she was convicted
of driving while intoxicated. She was discharged and the Board
disqualified her from receiving unemployment benefits on the grounds
that she constructively left her employment. The Court of Special
Appeals disagreed, interpreting LE § 8-1001 as disqualifying from
benefits only those individuals who depart their employment of
their own free choice and distinguishing an intent to become unemployed
from an intent to do an act that causes unemployment. Because
there was no evidence that Taylor drove while intoxicated with
the intent of being discharged, the Court reversed the Board.
III. Good Cause or Valid Circumstances.
The Court of Appeals extensively reviewed the voluntary quit disqualification
in Board of Education of Montgomery County v. Paynter,
303 Md. 22, 491 A.2d 1186 (1985). The Court noted that the voluntary
quit disqualification contains two categories of nondisqualifying
reasons for voluntarily leaving employment. "Good cause" must
be job related and it must be a cause "which would reasonably
impel the average, able-bodied, qualified worker to give up his
or her employment." Using this definition, the Court held that
the Board correctly applied an "objective test" to determine whether
a claimant has good cause to leave his employment. "The applicable
standards are the standards of reasonableness applied to the average
man or woman, and not to the supersensitive." Paynter,
303 Md. at 37, 491 A.2d at 1193.
The second category of nondisqualifying
reason is the "valid circumstance." Section 8-1001(c)(1). There
are two types of valid circumstances: a valid circumstance may
be a substantial cause that is job related or a factor that is
non-job related but necessitous or compelling. Paynter,
303 Md. at 30, 491 A.2d at 1190. Although non-work related health
reasons may constitute valid circumstances for leaving work, the
mere production of documentary evidence does not mandate an automatic
award of benefits. The Board may still conclude that the claimant
left work voluntarily and not for the claimed health reasons.
Shifflett v. Department of Empl. and Training, 75 Md.
App. 282, 540 A.2d 1208 (1988).
It is no defense to a voluntary quit
disqualification that the former job was not "suitable work" within
the meaning of § 8-1005. Berdych v. Department of Empl. &
Training, 69 Md. App. 484, 518 A.2d 462 (1986). Only if a
claimant demonstrates that he left the former job for good cause
or valid circumstances under LE § 8-1001 may he claim unemployment
IV. Approved Job Training.
The Board will excuse an individual from seeking or accepting
employment if the claimant is in approved job training. LE § 8-903(c).
However, one who voluntarily leaves work to enter into approved
job training will be disqualified for voluntarily leaving work
under LE § 8-1001. Berdych v. Department of Empl. & Training,
69 Md. App. 484, 518 A.2d 462 (1986). Apparently reacting to a
suggestion the Court placed in footnote 2 of its opinion, the
General Assembly amended LE § 8-1001 to grant benefits to an individual
who, after a layoff, secures a second job which he then leaves
to attend an approved job training program. LE § 8-1001(b)(2).
LE § 8-1002. Gross Misconduct.
In an early case, the Court of Appeals
recognized that no hard and fast rules may be used in determining
what constitutes deliberate and willful misconduct, the predecessor
to the gross misconduct statute. In LeCates, the Court
quoted favorably from a treatise which held that willful misconduct
the injury to the employer, although realized, is so recklessly
disregarded that, even though there is no actual intent,
there is at least a willingness to inflict harm, or a conscious
indifference to the perpetration of the wrong; in such a
case constructive intention is imputable to the employee.
Employment Sec. Bd. v. LeCates,
218 Md. 202, 208-09, 145 A.2d 840, 844 (1958) The Court wrote:
It is also proper
to note that what is "deliberate and willful misconduct"
will vary with each particular case. Here we "are not looking
simply for substandard conduct * * * but for a willful or
wanton state of mind accompanying the engaging in substandard
conduct. * * * Turning from the requisite state of mind
to the type of act or failure to act necessary for 'misconduct'
we are necessarily thrown into a shifting framework of reference.
* * * [T]he 'wrongness' of the conduct must be judged in
the particular employment context. * * * [C]ertain conduct
will be so flagrant that indulging in it will undoubtedly
be 'misconduct' whether or not a specific rule prohibiting
it has been expressly formulated and posted or otherwise
announced to the employees."
LeCates, 218 Md. at 208, 145
A.2d at 844. Although opining that a single instance of misconduct
would not ordinarily be disqualifying, the Court affirmed the
Board's determination that a claimant who took a truck from his
employer without permission, crashed it, and failed to report
the accident had engaged in deliberate and willful misconduct.
The Court also rejected the claimant's
argument that his misconduct was not "connected with his work."
LeCates, 218 Md. at 210, 145 A.2d at 845. The Court held
that misconduct may be sufficiently connected with the work even
when it occurs off the premises, during off hours, and when the
claimant is off duty. Because the employee took advantage of the
employment relationship in order to commit the misconduct and
because he breached a duty to his employer, the Court held that
his misconduct was connected to his work. LeCates, 218
Md. at 211, 145 A.2d at 845.
In Watkins v. Employment Sec.
Admin., 266 Md. 223, 292 A.2d 653 (1972), the Court of Appeals
affirmed the Board's determination that persistent absenteeism
and lateness in the face of warnings constituted gross misconduct.
The Court reaffirmed that "deliberate and willful" misconduct was:
[as] evinced an utter disregard of the employee's duties
and obligations to his employer, and was calculated to disrupt
the discipline and order requisite to the proper management
and control of a ... company.
Watkins, 266 Md. at 226, 292
A.2d at 654. In addition, the Court rejected Ms. Watkins' argument
that conduct that does not "substantially impair" the employer's
business cannot constitute gross misconduct. The Court explained
that it was irrelevant whether the employer found other employees
to cover for Watkins when she was absent. Conduct, the Court wrote,
which is destructive only of morale may be as damaging as misconduct
that is directed at interfering with performance. Watkins,
266 Md. at 228, 292 A.2d at 655.
The Court of Special Appeals has
affirmed gross misconduct determinations in a number of different
factual settings. Department of Economic & Empl. Dev.
v. Propper, 96 Md. App. 362, 625 A.2d 342 (1993) (failure
to adhere to a specified work schedule constituted gross misconduct);
Department of Economic & Empl. Dev. v. Hager, 96 Md.
App. 362, 625 A.2d 342 (1993) (refusal to accept shift change
without explanation was gross misconduct); Department of Economic
& Empl. Dev. v. Jones, 79 Md. App. 531, 558 A.2d 739 (1989)
(persistent absenteeism and drug use constituted gross misconduct);
Department of Economic & Empl. Dev. v. Owens, 75 Md.
App. 472, 541 A.2d 1324 (1988) (threat to kill supervisor after
grievance meeting constituted gross misconduct); Painter v.
Department of Empl. and Training, 68 Md. App. 356, 511 A.2d
585 (1986) (failure to tell employer of release to return to work
constituted gross misconduct).
LE § 8-1003. Misconduct.
In Rogers v. Radio Shack,
271 Md. 126, 314 A.2d 113 (1974), the Court of Appeals reversed
a Board determination that Rogers had been discharged for misconduct.
The Court found no substantial evidence that his use of a Radio
Shack citizen's band radio or loan of a stereo set to a customer
was in violation of any employment rules. Furthermore, the Court
found no substantial evidence that Rogers was responsible for
a shortage in the employer's petty cash fund. Accordingly, the
Court reversed the Board's determination that disqualified Rogers
from benefits for ten weeks.
The Court of Special Appeals affirmed
a Board decision that an employee of the police department did
not commit misconduct by advising her mother to read a search
warrant during a police narcotics raid. Board of Appeals v.
Mayor and City Council, 72 Md. App. 427, 530 A.2d 763 (1987).
LE § 8-1005. Failure to Apply For or Accept Suitable Work.
In Barley v. Maryland Department
of Empl. Security, the Court of Appeals affirmed a Board determination
that a claimant who rejected a job offer at a salary of $1.95
per hour had rejected "suitable work" although her former salary
was $2.68 per hour. The Court elucidated why it believed the type
of work offered the claimant was suitable:
It was of the
same general type of work she was accustomed to perform
and indeed offered her training in a new, growing and related
field of welding. The lower rate of wages for a person in
training for the work of the prospective employer was not
shown to be low or disproportionate to the rate for similar
work in the community. Then too, the maximum rate for the
new work ... was substantially higher than the hourly rate
she was receiving....
Barley v. Maryland Department
of Empl. Security, 242 Md. 102, 218 A.2d 24 (1966).
The Court of Appeals affirmed a decision
of the Board that claimants who reject employment offers before
they apply for unemployment benefits are not to be disqualified
under LE § 8-1005 for refusing suitable work. Sinai Hospital
v. Department of Empl. and Training, 309 Md. 28, 522 A.2d
382 (1987). Sinai Hospital gave striking health care workers until
December 11, 1984 to return to work. The strikers refused this
offer of suitable work and were replaced. Subsequently, the strikers
filed claims for unemployment compensation. The Court agreed with
the Board that a rejection of suitable work is only a bar to benefits
if the claimant is in claim status. At the time the striking workers
were asked to return to work, they had not filed for benefits
and were, therefore, not disqualified for rejecting work.
Sinai Hospital, 309 Md. at 46, 522 A.2d at 391.
LE § 8-1007. Holiday or Vacation Pay.
In Cogdell, Facello and Williams
v. Department of Economic & Empl. Dev., 104 Md. App. 575,
584, 657 A.2d 363 (1995), the Court of Special Appeals concurred
with the Board's determination that accrued vacation pay was not
deductible from unemployment benefits. The Court reversed the
Board, however, concerning how to allocate hybrid payments where
a portion represents payments that are deductible from unemployment
benefits and a portion represents payments that are not deductible.
In Cogdell, Facello and Williams,
the claimants received one "special payment" after they were laid
off from Bethlehem Steel. The "special payment" consisted of both
accrued vacation pay and a pension distribution. As the Court
affirmed, vacation pay was not deductible from unemployment benefits
while periodic pension pay was deductible. Mr. Facello received
a "special payment" of $7,662 of which $2,048 consisted of vacation
pay. Because the $2,048 represented three weeks of vacation pay,
the Board awarded him unemployment benefits for three weeks. The
Court of Special Appeals reversed.
The Court held that the proper method
of allocating hybrid payments was to subtract the vacation pay
from the entire "special payment" and allocate the remainder,
i.e., the pension portion, over the period it covers. Because
Mr. Facello's pension payment, when allocated over the thirteen
weeks it represented, was greater than his weekly benefit amount,
he was disqualified for the entire thirteen weeks. Cogdell,
Facello and Williams v. Department of Economic and Empl. Dev.,
104 Md. App. at 591-93, 657 A.2d 363.
LE § 8-1008. Retirement Payments.
The Court of Appeals affirmed the
Board's determination that the statutory predecessor to LE § 8-1008
disqualified a claimant from benefits for any week in which the
claimant received retirement pay that was equal to or in excess
of the claimant's weekly benefit amount, whether the payment was
a lump sum or periodic payment and whether the claimant had voluntarily
retired or was involuntarily retired by a layoff or shutdown.
Taylor v. Department of Empl. and Training, 308 Md. 468,
520 A.2d 379 (1987). When Ms. Taylor's job was abolished she received
an amount representing the entire vested balance due her from
the employer's profit sharing trust. When Taylor received the
lump sum distribution, she was not eligible to retire and had
to roll the sum of her pension into an IRA apparently to avoid
harsh tax consequences. Her application for unemployment benefits
was denied on the basis that she received this retirement payment.
Taylor contended that it was unfair to require an individual who
is not eligible to retire to use, and perhaps exhaust, her retirement
savings for immediate expenses, thus impairing her future economic
security. The Court considered but ultimately rejected these public
policy arguments holding that these considerations were better
directed to the legislature and that the Court was foreclosed
by the plain language of the statute.
In the same year that Taylor
was decided, the General Assembly amended the statute to make
retirement payments nondeductible from unemployment benefits if
the retirement payment is disbursed because of a layoff and in
a "lump sum." See LE § 8-1008(b)(2). The Court of Special Appeals
reviewed the amended statute in Cogdell, Facello and Williams
v. Department of Economic & Empl. Dev., 104 Md. App. 575,
584, 657 A.2d 363 (1995). The claimants were long-time employees
of Bethlehem Steel until the company shut down the rod mill where
they worked. At the time of the layoff, the claimants were eligible
to retire and chose to do so. Under Bethlehem Steel's pension
agreement, an eligible employee who retires is entitled to a "special
payment" followed by a monthly pension benefit. The claimants
each received the "special payment" during a 13-week period before
they received their regular monthly pension benefits. The issue
before the Court was whether the "special payment" constituted
a "lump sum" payment which would not be offset against unemployment
benefits. The Court affirmed the Board's determination that the
"special payment" was the first part of the periodic pension payments
and must, therefore, be deducted from unemployment benefits, to
the extent that the latter were greater than the former. Cogdell,
Facello and Williams, 104 Md. App. at 584, 657 A.2d 363. See
also, Employment Sec. Admin. v. Weimer, 285 Md. 96, 400
A.2d 1101 (1979) (under predecessor statute to LE § 8-1008 which
reduced unemployment benefits where a claimant received retirement
pay from a "private" pension plan, former federal employee was
entitled to benefits despite his receipt of a government pension).
LE § 8-1009. Severance Pay.
Severance pay to an employee whose
job is abolished is not deductible from unemployment benefits.
Westinghouse v. Callahan, 105 Md. App. 25, 41-42, 658
A.2d 1112 (1995). NOTE: See, Introduction, Section 8-1009,
this Digest for the 1996 legislative modification of the Westinghouse decision.
LE § 8-1302. Miscellaneous Acts of Employers.
The Board has inherent authority
to provide a remedy for an employee who did not timely file for
unemployment benefits because of a misrepresentation by an employer
within the meaning of LE § 8-1302. Department of Economic
& Empl. Dev. v. Lilley, 106 Md. App. 744, 666 A.2d 921
(1995). See discussion following LE §§ 8-802, supra.
Table of Authorities
United States Code
26 U.S.C. § 3304(a)(12) 167
26 U.S.C. § 3309(b)(1)(A) 9
26 U.S.C. § 3309(b)(1)(B) 10, 11
Code of Federal Regulations
29 C.F.R. § 778.103 121, 124
29 C.F.R. § 1604.11(a) (1980) 130
49 C.R.F. § 391 et. seq 197
Administrative Procedure Act ("APA") 231
Article 94, Section 2 of the Annotated Code of Maryland 39, 64
Article 95A, Section 4(c) of the Annotated Code of Maryland 71
COMAR 09.12.23 134
COMAR 09.32.01.14A(1)(d) 31
COMAR 09.32.01.15-1 206
COMAR 09.32.01.18 3
COMAR 09.32.01.19 4
COMAR 09.32.02.03. 61
COMAR 09.32.02.03C(1) 63
COMAR 09.32.02.04 61
COMAR 09.32.02.04B(1) 65
COMAR 09.32.02.04B(4) 64
COMAR 09.32.02.04B(4)(a) 67
COMAR 09.32.02.07-2 75
COMAR 09.32.02.09A 63
COMAR 09.32.02.10 29
COMAR 09.32.02.13A 223
COMAR 09.32.02.13B(2) 225
COMAR 09.32.02.14A(2) 219
COMAR 09.32.06.01B 43, 44
COMAR 09.32.06.01B(1) 37
COMAR 09.32.06.01B(3) 37
COMAR 09.32.06.01B(4) 37
COMAR 09.32.06.01B(1)(a) 44
COMAR 09.32.06.02E 165
COMAR 09.32.07.03B(4) 47
COMAR 09.32.07.07F 48
COMAR 09.32.06.03B iii
Md Ann. Code, Health-General Article
HG § 8-101 192, 194
HG § 17-214.1 192, 197
HG § 17-214.1(c)(1)(iv) 196
HG § 17-214.1(d) 198
Md Ann. Code, Labor and Employment Article
LE § 8-101(e) 31, 32
LE § 8-101(j) 3
LE § 8-101(l) 89, 92
LE § 8-101(v) 15, 17, 18, 31, 233, 236
LE § 8-101(v)(1) 17
LE § 8-102 233
LE § 8-201 passim
LE § 8-205 3, 6, 7, 8, 234
LE § 8-205(1) 235
LE § 8-205(2) 7
LE § 8-205(3) 6
LE § 8-206 235
LE § 8-206(d) 8
LE § 8-208 3, 235
LE § 8-208(b) 9, 11
LE § 8-208(c) 12
LE § 8-209 236
LE § 8-209(a) 9
LE § 8-212(c)(2) 9
LE § 8-215 9
LE § 8-220(b) 8
LE § 8-220(c) 8
LE § 8-221 8
LE § 8-222 8
LE § 8-506(d) 231
LE § 8-509 iii
LE § 8-509(b) 40
LE § 8-510 35, 39
LE § 8-510(a) 44
LE § 8-512 231, 233
LE § 8-512(a) 231
LE § 8-512(a)(3) 231
LE § 8-801 passim
LE § 8-801(b)(1) 236
LE § 8-802. passim
LE § 8-803 passim
LE § 8-803(d). 32
LE § 8-806 passim
LE § 8-806(e)(2) 37
LE § 8-806(f)(1) 29
LE § 8-806(g)(1) 37
LE § 8-806(g)(2) 40
LE § 8-806(h)(4) 231
LE § 8-809 passim
LE § 8-809(a) 49, 57
LE § 8-809(b) passim
LE § 8-901 passim
LE § 8-902(a)(2) 212
LE § 8-903 passim
LE § 8-903(a)(1)(i) 73
LE § 8-903(c) 237, 240
LE § 8-904 73, 75
LE § 8-904(a) 75
LE § 8-904(b) 75
LE § 8-907 73, 76
LE § 8-909 89, 91, 92
LE § 8-909(b) 91, 92, 93, 94
LE § 8-909(b)(i) 91
LE § 8-909(c) passim
LE § 8-909(d) 95
LE § 8-909(e) 92
LE § 8-910 3
LE § 8-1001 passim
LE § 8-1001 (b)(2) 237, 240
LE § 8-1001 (c)(1)(i) 116, 117
LE § 8-1001 (c)(1)(ii) 116, 117
LE § 8-1002 passim
LE § 8-1002.1 passim
LE § 8-1003 passim
LE § 8-1004 102, 108
LE § 8-1005 passim
LE § 8-1007 242
LE § 8-1008 passim
LE § 8-1008(b)(2) 243
LE § 8-1009 passim
LE § 8-1009(a) 24
LE § 8-1302 243
LE § 8-1305(b)(2) 55
Md. Ann. Code, State Government Article
SG § 10-203(a)(5) 231
SG § 10-218 (1995) 231
SG § 10-222(f) 231