Although much has been written about the Coronavirus Aid, Relief and Economic Security (CARES) Act and its companion relief programs, less has been written about the legal ramifications for businesses as a result of the widespread economic shutdown. From commercial leases to construction projects to supply-chain relationships, businesses are likely to take a hard look at their contracts to see what their rights and obligations are in this unprecedented time.

Important changes to general contractor liability for subcontractors’ wage violations, as well as minor changes to home improvement contracts, failed to pass Maryland’s General Assembly. The General Assembly did pass an increase in the per registrant award limit under the new home builder guaranty fund.

A bill that would have amended Maryland’s Personal Information Protection Act, as well as an amended version of the proposed Maryland Online Consumer Protection Act, both failed to pass the General Assembly.

Lamar Jackson and Tiger Woods have found themselves as parties in civil cases - albeit in completely different ways. Lamar Jackson, the reigning NFL MVP, recently filed suit against Amazon.com and Amazon.com Services Inc. in Florida federal court. According to the lawsuit, the Amazon defendants have falsely advertised and endorsed unlicensed and infringing clothing that utilized Jackson’s name, nicknames, images and persona. Tiger Woods (and his caddie) were sued by a spectator at the Valspar Golf Tournament in Florida.  In that case, the spectator alleges that he was pushed by Woods’ caddie after he tried to take a selfie of himself with Tiger in the background.

In the corporate world, highly placed executives and owners often earn several different types of post-separation compensation.  Some consult for their prior employer, while others may simply bargain for a severance or earn-out package.  In a recent case from the Fourth Circuit, the court was presented with four employees who voluntarily participated in a post-separation incentive program.  The incentive program provided for post-separation payments so long as the employees did not compete with their former employer.  The employees subsequently violated the agreement and the employer sued.  The question for the court was what to do with the payments already made to the employees.

Maryland State Board of Contract Appeals disallows a protest filed one day after the deadline.

In Amalgamated Transit Union, Local 1300 v. Maryland Transit Administration, the Maryland Court of Special Appeals reviewed the common law bases by which a reviewing court can vacate or reverse an arbitrator’s decision. Focusing on the third common law basis for reversal - public policy - the Court vacated the arbitrator’s decision and upheld the employee’s termination.

Michael Severino is pleased to announce that he has been selected to the 2020 Maryland Super Lawyers List for business litigation. Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.

The Maryland Court of Special Appeals addressed addressed whether a party waives its right to arbitrate by failing to demand arbitration within the general civil statute of limitations. No, it does not. The Court also addressed who – the court or the arbitrator – initially determines whether a dispute is arbitrable. Usually, the arbitrator.

The Maryland General Assembly is considering limiting the application of the Responsible Payment of Employee Health Care Expenses Act.  Among other changes, a recent bill would (a) eliminate the minority business exemption, (b) exempt businesses employing 50 or fewer people and which did not exceed an average of $7,000,000 in gross sales for the past three years, and also (c) would exempt state jobs valued at less than $500,000.

In Red Coats Inc., the Maryland State Board of Contract Appeals addressed whether a change in state law that caused increased operating costs constitutes a change in the scope of work sufficient to warrant an equitable adjustment. The Board determined that because the work required under the IFB and contract did not change, the contractor was not entitled to an equitable adjustment. 

In any Maryland bid that contains MBE participation goals, the MBE entity must provide a “commercially useful function” within the scope of the contract. In a recent MSBCA opinion, the MSBCA sustained the procurement officer’s determination that a bid was unresponsive because the MBE subcontractor was to perform work not required by the contract and, thus, would not perform a commercially useful function.

Several bills were introduced in the General Assembly that would affect businesses.  While they are too numerous for a single blog post, two affect individuals’ privacy rights, which I have previously written about.

Earlier this year, a number of bills were introduced in the Maryland General Assembly that would affect contractors and subcontractors.  While they are too numerous to list in one blog post, a couple generally apply to most contractors and warrant attention.