State of Maryland Increases the Risk of Liability for Unlawful Harassment.

Effective October 1, 2019, all employers in Maryland will be subject to a significantly
increased risk of liability for unlawful harassment under the Maryland Fair Employment
Practices Act (“FEPA”).

FEPA is the state law that prohibits discrimination and harassment in employment. It
applies to Maryland employers with fifteen or more employees. The courts generally interpret it
in a manner consistent with its federal counterpart, Title VII of the Civil Rights Act of 1964
(“Title VII”).

House Bill 679, which has been signed into law by Governor Hogan, makes significant
changes to FEPA’s prohibitions on unlawful harassment. It should be noted that “harassment”
includes not only harassment based on sex, but also harassment based on race, color, religion,
ancestry or national origin, age, marital status, sexual orientation, gender identity and disability.

The first significant change is that, effective October 1, 2019, independent contractors
will be deemed to be “employees” for purposes of harassment claims. Bona fide contractors
generally may not assert claims for unlawful harassment because employment laws, like FEPA
and Title VII, only apply to employees. With this change, contractors will be permitted to make
claims for unlawful harassment in the same manner as employees.

Second, in perhaps the most significant change, employers will be stripped of an
important defense in claims involving harassment by supervisors. Employers are liable for
harassment by supervisors where the harassment: (1) culminated in a “tangible employment
action;” or (2) was sufficiently severe or pervasive to create a hostile work environment.
“Tangible adverse employment actions” include actions such as hiring, promotion, demotion,
reassignment or termination. Under both federal and current state law, employers have no
defense in claims alleging this type of harassment.

Under the second type of supervisor harassment, e.g. where the harassment was severe or
pervasive, but did not involve a tangible adverse employment action, the law currently provides
that an employer may escape liability by showing that: (1) it took reasonable steps to prevent and
promptly correct the harassment; and (2) the complainant unreasonably failed to take advantage
of the employer’s preventive or corrective measures. This is known as the “Faragher/Ellerth
defense,” after the U.S. Supreme Court cases that established these standards in 1998.

However, under the new amendments to FEPA, it appears that the Faragher/Ellerth
defense to supervisor harassment claims will be eliminated. The new law states simply that
employers will be liable for harassment by any individual who “directs, supervises, or evaluates
the work activities” of the complainant. Thus, it does not appear that employers will be able to
escape liability for harassment by supervisors, assuming the harassment was sufficiently severe
or pervasive to create a hostile work environment.

Furthermore, the new law appears to significantly expand the class of employees who
will be deemed to be “supervisors” for purposes of harassment claims. Under current law,
“supervisors” are generally considered to be managers who have the authority to take tangible employment actions. Employees who merely direct the work of co-workers generally are not be
deemed to be supervisors under Title VII or the current version of FEPA. Instead, they are
treated in the same manner as co-workers. Employers are liable for harassment by co-workers
when the employer knew or should have known of the harassment, and failed to take prompt and
effective remedial action.

As noted above, the FEPA amendments define the term “supervisor” to include any
employee who “directs, supervises, or evaluates” the complainant’s work. While there have yet
to be any court decisions interpreting this provision, it appears to be far broader than the current
law. Thus, not only will the Faragher/Ellerth defense be eliminated in supervisor harassment
claims, but the class of employees who will be deemed to be supervisors will be significantly
expanded.

Next, the amended law will extend the deadline to file an administrative charge of
harassment, which is a prerequisite for filing suit in court. Currently, administrative claims must
be filed within 180 days. Under the amended law, employees will have two years to file such
claims with the Maryland Commission on Civil Rights or a county office of human rights.
Further, the deadline to file suit in court (after an administrative charge has been filed) will be
extended from two years to three years.

Finally, FEPA has been amended, for purposes of harassment claims only, to apply to all
employers in Maryland, not only those with fifteen or more employees. This change is
somewhat less significant than the others described above, given that many small employers
were already covered under various Maryland county codes.

In summary, as of October 1, 2019, all employers in Maryland will be subject to
harassment claims by independent contractors, will face greatly expanded liability for
harassment by persons deemed to be “supervisors,” and will be required to defend against claims
that previously would have been untimely.

In light of these changes, it is imperative that employers take action to prevent unlawful
harassment in the workplace. All employers should have a written policy prohibiting unlawful
harassment and setting forth a complaint procedure. Such policies, which should be distributed
to all personnel (including contractors), should address not only sexual harassment, but also
harassment based on the other classifications identified above. Such policies must be enforced
diligently, and employers must take prompt and effective remedial action when they learn of
conduct that might constitute unlawful harassment, or which might develop into hostile
environment harassment if left unaddressed. This includes investigating complaints of
harassment and taking disciplinary action where appropriate.

Finally, employers should conduct training for all personnel on unlawful harassment.
Given that employers will now be stripped of an important defense in cases involving hostile
environment harassment by supervisors, special attention should be given to employees who
might be deemed to be “supervisors” under the amended law.

Please contact us if you have any questions regarding this memorandum, or if you need
assistance with policies, training, investigations or any other issues relating to allegations of
unlawful harassment in the workplace.

This communication provides an overview of recent developments for information
purposes only. It is not intended to be, and should not be construed as, legal advice for any
particular fact situation. This information is not intended to create, and receipt of it does not
constitute a lawyer-client relationship. Recipients should not act upon this information without
seeking professional legal counsel.