Unemployment

A question that comes up often in my practice is whether one can – intentionally or by accident – waive one’s right to apply for unemployment benefits in Maryland.  The following is a discussion of law and is not legal advice; I am not your lawyer and if you want legal advice, you should print this article, take it to your attorney (which I am not) and ask her or him to point out its flaws and errors and explain to you what your situation really is.  I am not your lawyer.  You should not make a decision based on the content of this article, other than to print it out and give it to your attorney for comment, corrections and advice.  Your lawyer didn’t write this piece; go get her opinion and have her tell you why I am wrong generally and especially wrong for your case.

Many employment settlement agreements contain language to the effect that a worker settling a wage and hour claim, wage payment and collection claim, discrimination claim or other claim gives up “all employment claims” or “all claims.”  In some states, I am informed, a worker may also waive a claim for unemployment benefits by a similar agreement.  There are thus two legal issues presented for the Maryland worker in this situation: is an unemployment claim an “employment claim,” and if so is it possible under public policy in this state to waive it?

The second issue – public policy – will in most cases and perhaps all cases “strong arm” the first issue.  Under Md. Code Ann., LE §§ 8-1303 and 8-1305,  it is in fact a misdemeanor punishable by up to a year in jail for an employer, including an agent of an employer, to accept or require from an employee a waiver of a right to which the employee is entitled under Title 8 of the Labor and Employment Article of the Code (the Unemployment Insurance title.)  Presumably an “agent of an employer” would include any management-side attorney in negotiations with a worker’s attorney.  Accordingly, no attorney representing an employer would wish to incriminate herself and her client, one would figure, by accepting (or likely drafting!) such a criminal waiver within a settlement agreement and treating it as a waiver of unemployment benefits.

The questions don’t end there, however.  While one presumably cannot “waive” unemployment benefits, workers still on payroll who resign or are pressured to quit as an condition of settlement may in practice face tricky challenges in getting unemployment.  Settlement may affect eligibility in theory and practice in some cases, even without a void and illegal “waiver.”  A worker who is owed back wages or who has suffered discrimination and leaves the company as a condition of settlement may be in a gray zone on the issue of “voluntary quit.”  If management owes the worker back pay, for example, and the worker quits the job in order to get lawful back pay, it’s arguably either good cause to quit voluntarily or, in the alternative, a non-voluntary quit under management duress withholding a lawful benefit which Maryland treats as a discharge.  On the other hand, one can imagine management providing resistance in the hearing room in some cases, claiming that the worker chose voluntarily to accept a disputed claim.  I have not found case law in Maryland holding specifically that quitting in order to get a disputed employment claim finally settled and paid constitutes “good cause” to quit or is otherwise less than voluntary.  Of course for workers who have long left the company voluntarily or otherwise, this issue is likely moot.

A practice tip for Maryland attorneys, both management and worker-side, might be to make any appeal letter to the Unemployment Board of Appeals as sparse as possible to avoid any avoidable disclosure of confidential settlement terms.  Once witnesses are under oath, they presumably must testify truthfully notwithstanding any agreement to the contrary, but the confidentiality of any agreement should be respected as much as possible except when witnesses are providing testimony under oath.