November 1996

Workplace Labor Update - Court Enjoins Employer Lawsuit Against Employee – November 1996

3 min

Maryland's intermediate appellate court recently decided that courts can prohibit employers from suing employees who have filed administrative charges of discrimination against them until the administrative agency has finished investigating the charge. Maryland Comm'n on Human Relations v. Downey Communications, Inc., 110 Md. App. 493, 678 A.2d 55 (1996).

In 1994, Walters filed a charge of discrimination with the Maryland Commission on Human Relations against Downey Communications, a magazine publisher. Walters alleged that she applied for and was offered a management position with Downey, but when she informed a company vice president that she was pregnant, Downey rescinded the job offer. Walters claimed that Downey discriminated against her on the basis of her gender and pregnancy in violation of Maryland's law prohibiting employment discrimination. Downey contended that Walters never applied for a position with Downey, but rather, applied for and was offered a position by another company located on the same floor of an office building as Downey.

After Downey received the charge of discrimination, its lawyer wrote to Walters stating that, if she did not withdraw her charge, Downey would sue her for malicious prosecution. In response to this letter, the Commission filed a lawsuit in the Circuit Court for Montgomery County requesting that the court enter an injunction prohibiting Downey from threatening, harassing or suing Walters if she did not withdraw her charge. Because the trial judge refused to grant the injunction, the Commission appealed to the Maryland Court of Special Appeals. Between the time when the trial court denied the request for an injunction and before the Commission filed its appeal, Downey filed a lawsuit against Walters in Virginia for breach of a settlement agreement and malicious prosecution.

The Maryland appeals court rejected Downey's argument that Maryland courts do not have the authority to stop a judicial proceeding in another state, reasoning that courts can restrain persons within their jurisdictions from prosecuting actions in other states. The court also held that, prior to the Commission's resolution of its investigation, an employer may be enjoined from pursuing a lawsuit against a charging party if the suit involves essentially the same issues under consideration by the Commission. The court reasoned that the administrative process would be impeded if the parties could file parallel lawsuits seeking to litigate an issue before an administrative agency. For example, the court explained, such a lawsuit could intimidate the charging party and others from participating in the agency's investigatory process. The court remanded the case and instructed the trial court to review its decision in light of these considerations. The court, however, also ruled that the Commission may not obtain a permanent injunction to bar the employer from ever pursuing a lawsuit against a charging party in an employment discrimination case.

This case demonstrate the aggressiveness with which administrative agencies sometimes pursue discrimination claims on behalf of employees. Although the court held that the employer lawsuit may have to wait until the completion of the Commission's investigation, it noted that there are rare situations in which an employer would be allowed to file a lawsuit against an employee with an active charge - such as to avoid the loss of important evidence or to prevent the statute of limitations from running. In light of the maze of legal considerations, employers are well advised to consult with legal counsel when confronted with a charge of discrimination.