Monday, July 23, 2007

Jury Finds Maryland Company Unlawfully Withheld Vacation Pay From Departing Employees

In the fall of 2004, a group of 14 employees provided notice of their resignation to their employer, Catapult Technology, Ltd., in order to join another government contractor. Due to circumstances beyond their control, the employees were not able to provide 2 weeks advance notice of their resignation, which, according to Catapult's Employee Handbook, resulted in a forfeiture of their earned but unused vacation. The employees collectively had approximately $70,000 of accrued vacation pay withheld at the time of their resignations. When Catapult insisted that the forfeiture provision in their handbook was fully enforceable, the employees filed suit in the Circuit Court for Montgomery County under Maryland's Wage Payment and Collection law, seeking treble damages and attorney's fees.

Marc J. Smith, a partner at the Rockville, Maryland law firm of Smith, Lease & Goldstein, LLC, represented all 14 of the former employees. A copy of the Complaint can be found here. After filing suit, Smith filed a Motion for Partial Summary Judgment on the issue of liability, arguing that the Wage Payment and Collection law applied to accrued but unused vacation and that the forfeiture provision contained in Catapult's Employee Handbook was unenforceable and void under Maryland public policy. Judge Dugan agreed and collectively awarded the employees nearly $70,000. The only issue left for trial was whether Catapult had a bona fide basis to withhold the employees' accrued vacation pay and, if not, whether they were liable for up to treble damages and the employee's attorney's fees.

After a 2 day trial, the jury returned a verdict in the employees' favor, finding that Catapult had withheld the employees' vacation pay in bad faith and awarded the employees nearly $100,000 in enhanced damages. The Court subsequently awarded the employees all of their attorney's fees accrued through the trial. Catapult appealed both Judge Dugan's ruling and the jury award to Maryland's Court of Special Appeals. Oral argument was held in March 2007 and the parties are awaiting a decision from the Court of Special Appeals. A copy of the appellate brief filed on behalf of the employees can be found here.

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