UPDATED - Employers Must Pay Accrued but Unused Vacation Leave

Maryland’s recent legislative session produces a mixed bag for employers. First, the good news, Maryland enacted legislation that clarifies when employers are required to pay employees accrued leave up their separation from employment. The bill corrects a recent decision issued by the Maryland Court of Special Appeals which held that employers must pay employees for accrued vacation upon their separation from employment even where the employer has a policy, which has been communicated to its employees, stating that no such entitlement exists. The new law requires employers to pay out accrued paid leave upon termination of employment only to the extent as provided in a written policy that is communicated to the employee prior to their termination.

On a less favorable note, Maryland also enacted legislation entitled the Flexible Leave Act which requires Maryland employers, who provide their employees with paid leave, to permit their employees to use that leave to care for ill family members defined as the employee's child, spouse or parent. While many employers already permitted employees to use their accrued leave for this purpose, some worry that the state mandate could lead to abuses.

If you have questions, please contact our office.

Document Retention: Construction Projects

With the advent of electronically stored information, often referred to as ESI, courts have increasingly scrutinized the document preservation policies of businesses. The most prevalent focus has been on the need to preserve documents relevant to a dispute when a party knows or should know that their is a reasonable probability of litigation. Defining this point in time is not always easy. However, given the propensity for claims on construction projects it is important for contractors to keep this requirement in mind. The United States Court of Claims has specifically pointed to a the issuance of a differing site conditions claim as the point in time in which relevant documents should be preserved. Likewise it also noted that the issuance of a cure notice triggered the obligation to preserve relevant documents. By analogy, payment bond claims, delay claims, a disputed change order and notices of mechanic's liens would all likely trigger the obligation of a contractor to preserve all relevant electronically stored information. The consequences for failing to abide by this obligation are significant and include monetary sanctions and inferences against the party who has failed in their preservation efforts. Recently, the Federal Rules of Civil Procedure, which govern the manner in which disputes in federal court proceed, allowed for some relief form this sometimes onerous obligation by stating that the good faith destruction of ESI during the routine operation of a computer system can operate as a "safe harbor." However, some commentators have referred to this exception as the "not so safe harbor," given the burden to prove what is routine and what is good faith.

For further information contact Matt Hjortsberg at hjorsberg@bowie-jensen.com. Matt Hjortsberg has given several presentations on both construction law as well as document preservation and ESI for multiple organizations including the American Subcontractor's Association (ASA), Lorman Education Services, MICPEL, the Maryland State Bar Association and most recently for the Maryland Association of Counties (MACO).