Maryland Unemployment Law — A Stacked Deck?

When it comes to areas of Maryland law that are fundamentally flawed, that scream out for statutory revision, that overwhelmingly favor employers, several topics always come to mind: a) overtime laws that do not allow liquidated or punitive damages, b) the complete lack of family and medical leave for employers with less than 50 employees, and c) the broad and unfair enforceability of non-compete agreements. Few Maryland employment attorneys realize, however, that Maryland’s unemployment appeals laws are structurally biased in favor of employers.

The reason for this inherent favortism is simple — Maryland law forbids attorneys from being paid more than 1.5x the weekly benefit amount that their client would receive if their client prevails at the hearing. In other words, if an unemployed client would receive the maximum payment of approximately $340 per week, the attorney is limited to charging a fee of $510. And to charge that fee, the attorney must seek approval from the Agency. To put those numbers in perspective, if an attorney spends ten hours on an unemployment case, the attorney will be paid a maximum amount of about $50 per hour — which is precisely why most attorneys, even employment attorneys, will not take unemployment appeals cases.

This absurdly narrow restriction on attorneys’ fees is completely unjustified — for a client who remains on unemployment for the full term, it results in a fee that totals about six percent of the total award — well below the contingency fee percentages charged by lawyers in virtually every other type of case. And the end result is that employers show up at these hearings with attorneys or unemployment specialists, while employees have to fend for themselves, often with no understanding of the evidentiary burden they must carry to prove defenses such as “good cause” for a voluntary resignation. Unfortunately, once the hearing is finished, any further appeals are not de novo, but are based on the record created in the first appeal, so the chances for reversal are between slim and none.

While I have been fortunate enough to be successful in the unemployment appeals hearings that I have handled on a pro bono basis, its plain that the system is broke and is crying out for improvements.