DLLR's Unemployment Insurance Appeals

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.

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."

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:

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.

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 benefits.

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

Employment Sec. Bd. v. LeCates, 218 Md. 202, 208-09, 145 A.2d 840, 844 (1958) The Court wrote:

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:

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:

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

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