On March 22, 2014, Maryland’s highest court issued a new ruling regarding the scope of an employee’s right to file a lawsuit for unpaid wages under the Maryland Wage Payment and Collection Law (the “MWPCL”), Maryland’s principal wage payment statute.  In Marshall v. Safeway, the Maryland Court of Appeals held that an employee may bring a private action under the MWPCL when the employer allegedly makes unlawful deductions from the employee’s pay.  The employer in Marshall mistakenly garnished too much money from the plaintiff’s pay due to a miscalculation.  When the employee brought a private action under the MWPCL for improper wage deductions, the trial court and intermediate appellate court dismissed the claim, ruling that the MWPCL permits a private civil action only when an employer does not pay all wages due upon the employee’s termination of employment or when the employer does not pay an employee in regular pay periods.  These lower court rulings were consistent with Maryland federal courts’ interpretations.  The Court of Appeals reversed, holding that any violation of the MWPCL, including improper wage deductions, may serve as the basis of a private action under the MWPCL.  2014 Md. LEXIS 163 (Md. Mar. 26, 2014).

The prior federal cases and the intermediate appellate court in Marshall had looked to the express language of MWPCL’s private civil enforcement provision, which states that an employee may file a lawsuit for violations of two specific statutory sections—the sections governing wages due upon termination of employment and the employer’s obligation to pay employees in regular pay periods.  Because the MWPCL’s provision governing deductions from pay was contained in a separate statutory section that was not specifically referenced in the private enforcement provision, those courts had held that the MWPCL does not permit a private action for unlawful deductions from an employee’s pay, leaving the employee with only an administrative remedy.  However, the Court of Appeals in Marshall looked to the legislative history and broader statutory scheme of the MWPCL and concluded that the legislature intended for any violation of the MWPCL to be subject to a private lawsuit, notwithstanding the limiting language in the civil enforcement section.

The District of Maryland federal court already has taken note of Marshall’s change in the law.  On April 11, 2014, in Mould v. NJG Food Service, Inc., the U.S. District Court for the District of Maryland revised a holding that it issued only a few months ago, in December 2013.  In Mould, several restaurant employees claimed that their employer’s improper tip pooling and tip credit practices resulted in unlawful deductions from their pay.  Relying on the intermediate appellate opinion in Marshall, the Mould Court in December dismissed several MWCPL counts that were based on the wage deductions.  Revisiting that holding in light of the decision inMarshall, the Mould Court reinstated some of those claims.  However, the court stopped short of reinstating the MWPCL claims that alleged that the deductions resulted in unpaid overtime in violation of the Fair Labor Standards Act, since it found those claims were preempted by the FLSA.

Employers with multi-state operations must constantly remain abreast of legislative, regulatory and case law developments.