Maryland law – general

Unemployment and Severance Pay: Watch Out

Workers who receive severance pay are generally disqualified from receiving unemployment benefits for the period over which the severance accrues. This is true whether the severance is paid in a lump sum or in the payment method by which regular salary or wages were paid.

However, this is not the trap.

The trap is that severance is itself not subject to unemployment taxes; employers don’t pay premiums to the UI Division for severance. Severance is subject to income taxes and FICA, but not to UI taxes.

Why does this matter?

A worker who receives severance may fail, particularly if the severance period is lengthy and if the worker is in a higher-income field where jobs pay well but are scarce, to earn 10 times her weekly benefit amount in UI-taxable wages during the applicable benefits year as required by statute. In practice, someone on severance can earn out her severance, become eliglble for unemployment and then be disqualified.  Further, if the worker contacts the UI Division for unemployment benefits during severance, it may work as a Catch-22: the worker has established a benefits year during which no benefits are payable (due to severance), then may be “gotcha-ed” out of a more favorable benefits year due to the lack of earnings.

The problem is that UI Division publications encourage workers to apply for benefits immediately upon becoming unemployed, whether they are getting severance or not. For some workers, that advice is counter-productive, or at least deserves closer review and additional advice from legal counsel. Someone receiving severance is “unemployed”, but just disqualified under most circumstances. There is no provision to “fix” a poorly-chosen benefit year; it must start from the first claim/application for UI benefits.

Bottom line: if you or your client may be getting severance, don’t apply for UI benefits without first undertaking careful, detailed analysis of what the eligibility requirements are for that worker not in theory, but in practice.

Posted by Bruce Godfrey in Employment Law, Maryland law - general, Unemployment, 1 comment

Top ten things you need to know about practicing law in Maryland.

To young lawyers, new lawyers and visiting lawyers, here’s your top ten things to know about starting up in this state as a practicing lawyer in the view of one opinionated Baltimore County solo attorney.

1) Small.  This is a small state with a fairly sophisticated Bar, a very diverse one.  But it’s small.  If you get a reputation for being a jerk or an incompetent, it’s 4 degrees of separation, not 6.  And if you are connected in anyway to Loyola High School, it’s 2 degrees, starting with half the Baltimore County bench (as well as this attorney, ’87.) I am not advocating any of the foregoing, just describing it accurately.

2) Local Rules.  This rule has two parts: a) there are no local rules; and b) part a) is complete BS.  More accurately, the Rules use the word “may” a lot and “shall” less often.  How these rules get interpreted locally varies; get help if you are at risk of getting “hometowned.”

3) There is no “typical” Maryland court. Essentially, Maryland is 6 or 7 ministates united by a tax form.  The distance from Hagerstown to Bethesda is about 60 miles, but culturally it’s about the distance from Hagerstown to Brooklyn Heights.  Baltimore and Bethesda are 40 miles apart but they are different worlds, united by a tax form. Don’t even go to the Shore for legal business without local advice.

4) Judicial districts and circuits don’t matter. OK they matter internally for budgeting and assigning judges, but they don’t matter.  No one talks about circuit or district numbers except for lawyers doing criminal marketing mailings, and even they don’t talk about them but simply acknowledge them on the database.  They don’t matter; you will never see a reference to them on a pleading.  Counties and Baltimore City matter; counties often have very strong powers of home rule in a manner completely foreign to New Englanders who bumble in.

5) Contributory negligence is real.  If you utter “comparative fault” in this state you get the shocked looks that you deserve from working lawyers. Someday it may change if the insurance lobby stops seed-spreading the cash.  Until then, expect to have a bear of a time with slip and fall cases.

6) It’s a fairly forgiving Bar here.  Maryland ethics rules are fairly forgiving on some of the esoteric advertising nonsense that we hear out of Florida (e.g. no flags?).  Then again, Florida has to put up with “Florida Man” and we don’t. Annual bar dues have been the lightest in the country for many years and the bar association is voluntary (which in my view makes it better).  CLE is not mandatory, which in my view also makes it better.  How to stay out of trouble?  Be honest; don’t mishandle other people’s money; know what you are doing and do it promptly, and don’t be a disgrace.  The rest is commentary.

7) Sanctions are used sparingly in state and federal court. Both state rules and the local federal rules discourage sanctions filings in theory and in practice.  In the state systems, fee sanctions are remedial, not punitive.  I have asked for sanctions against opposing counsel three times in my career, and regretted it once.  Moral to the story: don’t make yourself a test case, as you will stand out.

8)  The Annotated Code of Maryland is the official code.  Righteous people who adhere to the Blue Book (which, to my knowledge, has not been made a canonical resource by the Court of Appeals through any official act) will tell you to cite the Code as “Md. Code Ann.” rather than “Md. Ann. Code.” Someone in Massachusetts actually gets paid to issue this rule to us.

9)  You should go to Ocean City in June if you can.  The MSBA puts on a rather good show, good spread, lots of CLE, most of it very good from working lawyers.  You deserve a deductible trip downyocean to learn.

10)  Bar members here are, in my experience, exceptionally generous.  When I was coming up in the Bar, I was too intimidated to seek out advisers, to ask for help.  Part of why I give back now is that I don’t want young lawyers to make my mistake.  Lawyers in this state are almost always freely giving of their time to young attorneys when they can, and that’s a very good thing (and something I wish I knew when I was 25.)  The MSBA list-serv for small firms and solos is an excellent example of this.

Posted by Bruce Godfrey in commentary, Godfrey-personal, Maryland law - general, 0 comments

Mentoring Program of the Maryland Professionalism Center

photoI am pleased to report a successful year in the Mentoring Program through the Maryland Professionalism Center, Inc., a non-profit organization that works in close coordination with the Maryland Court of Appeals, particularly with the Hon. Lynne Battaglia of Maryland’s highest court. My mentee this year was a young aspiring family law attorney whose prior mentor through the program failed to follow through. Despite a major medical upheaval on my end mid-year and logistical issues, my mentee and I successfully completed the entirety of the program in a timely manner.

The mentoring program requires six meetings between mentor and mentee on topics ranging from, among others, unwritten “customs” about postponement requests, major malpractice and ethics pitfalls, conflicts of interest, time management, legal writing style, ethical and effective client development strategies and, perhaps most importantly, how to select suitable cases (my translation: how to reject flaky, meritless and inefficient cases.)

I encourage any experienced Maryland attorney who has the time and inclination to join the Mentoring Program; it is a great way to discharge part of the hortatory pro bono publico duty.

UPDATE 4 Feb 2014: I thank Ms. Monise Brown, Executive Director of the Maryland Professionalism Center, Inc., for alerting me to potentially misleading language in the title of this post, since corrected.  While the Maryland Professional Center, Inc., serves the interests of the Bar of Maryland in the sense of the collectivity of Maryland attorneys licensed under the supervision of the Court of Appeals, it and its Mentoring Program are not part of the Maryland State Bar Association, Inc. (MSBA), Maryland’s voluntary bar association to which about 1/2 of Maryland attorneys belong (myself included.)  The MSBA may have meritorious mentoring programs of its own.

Posted by Bruce Godfrey in Maryland law - general, Mentoring, Practice of Law, 0 comments

“New” Maryland Rule 2-305

Effective January 1 of this year, a new rule provision went into effect governing damages clauses in civil complaints in Circuit Court. Under newly modified Rule 2-305, a demand for a money judgment less than $75,000 shall specify the amount sought, but a demand for more than $75,000 shall not specify the amount, but merely indicate that the sought amount exceeds $75,000.

According to the Reporter’s Notes from the 174th meeting of the Standing Committee on Rules and Practice and Procedure on November 1 of last year, the Rules Committee thought that “ad damnum clauses are damaging to defendants who become frightened upon receiving complaints with huge amounts specified in the clauses; to plaintiffs who may become disillusioned as to the value of their cases; and to the legal profession because they lead to a negative public perception by distorting the attorney’s actual valuation of the case.” Presumably by “ad damnum” clauses the Committee referred to the large, round figures in ad damnum clauses now prohibited in most cases by this Rule. Per the Reporter’s Notes the $75,000 figure is designed to allow parties to be aware promptly of the possibility of diversity jurisdiction in federal court, and the damage amounts for lesser claims affect the jurisdiction of the courts and the right to a civil jury trial.

Practitioners need to be aware that the failure to plead properly under this new Rule may result in the dismissal of a Complaint or, perhaps more likely, an Order granting time to amend a non-compliant damage clause under pain of possible dismissal. A close-to-the-statute of limitations filing might have serious problems with an error on this point, and it is easy to imagine a large claim being filed close to the statutory limit in, say, a major personal injury or other claim.

This Rule went into effect with relatively little fanfare, such that at the MSBA Annual Meeting this year, Judge Battaglia as emcee stumped much of the room during the “Are You Smarter Than A Law Clerk?” session. I was part of the “stumpees” at the time; I had not become aware of this rule from any source including the MSBA Solo and Small Firm listserv (it may have been discussed, but I missed it) or any other source to my knowledge.

Posted by Bruce Godfrey in Maryland law - general, Practice of Law, 2 comments