Judge Rejects County’s Effort To Dismiss LCB Lawsuit

BERLIN — A U.S. District Court judge this week issued an opinion denying Worcester County’s motion to dismiss a lawsuit filed last year alleging the now-defunct Liquor Control Board (LCB) violated the federal Equal Pay Act (EPA).

Last August, the Equal Employment Opportunity Commission (EEOC) filed the suit in U.S. District Court. The complaint outlines an alleged pattern by the old LCB of undercompensating female retail clerks at the agency’s retail outlets throughout the county compared to their male counterparts that performed the same job.

The allegations date back to as early as April 2010 when the county liquor dispensary operations were still run by the LCB. In 2011, amid significant controversy, the old LCB was dismantled by the General Assembly and the new county-run Department of Liquor Control (DLC) was created to fill the void. The charges of discrimination surfaced early in July 2011 after the DLC assumed control on July 1, 2011, but the allegations stem from alleged wage discrimination carried out by the LCB prior to the takeover and does not implicate the new DLC.

The complaint asks the court to grant a permanent injunction enjoining Worcester County from discriminating against females with respect to their compensation and from paying female employees lower compensation than their male counterparts for performing equal work.

In terms of monetary awards, the complaint asks the court to order Worcester County to make the employees whole by providing appropriate back pay with prejudgment interest in amounts to be proven at trial and an equal sum as liquidated damages.

In February, the Worcester County Commissioners, through their attorneys, filed a motion to dismiss the suit, or in the alternative, a motion for summary judgment, citing a variety of reasons why the suit is not valid, not the least of which is the alleged violations occurred under the watch of the old LCB, a quasi-state organization not directly affiliated with the county. In short, Worcester argued the new DLC which replaced the LCB, is not responsible for the actions of the old agency under the doctrine of successor liability.

“Maryland law gave the LCB a monopoly over liquor sales and the county did not exercise any degree of control over it,” the county’s motion to dismiss the case reads. “The county did not have any input on who was or was not appointed to the LCB. Applying these principles in the instant case establishes that the claims against the county should be dismissed, with prejudice, or that summary judgment should be entered in favor of the county.”

In its motion to dismiss the case, the county points out the alleged wage discrepancies came under the watch of the LCB, which was controlled by the state, and not the county.

“It is undisputed that during the time period in question, the county did not employ any of the individuals identified in the complaint,” the motion to dismiss reads. “For the purposes of the Equal Pay Act, the county did not become an employer until July 1, 2011 when it assumed control of the liquor sales in the county. Consequently, the county cannot be held liable under the Equal Pay Act for alleged violations that occurred before it became the employer of the individuals in question.”

However, U.S. District Court Judge George L. Russell III this week issued an opinion denying the county’s motion to dismiss the wage discrimination suit. In his opinion, Russell opined the county had not successfully pleaded its case for successor liability.

“The EEOC, by alleging that female clerks received lower wages than their male counterparts to perform the same job, has pleaded sufficient facts to state a plausible claim under the EPA,” the opinion reads. “The crux of the issue raised in the county’s motion, however, is whether successor liability may apply under the EPA and, if so, whether such liability should apply to the county. In the absence of such authority and in light of the case law from other jurisdictions, the county’s motion to deny is dismissed.”

The judge’s opinion also points out the county has not successfully provided evidence it knew nothing of the alleged violations prior to taking over for the LCB and pointed out a failed attempt to prove the LCB had an insurance policy covering wage discrimination claims.

“Although the county denies actual notice of the charges prior to taking over the LCB,” the April 14 notice sent to the LCB may have given the county constructive notice,” the opinion reads. “As to the LCB’s ability to provide relief, the county asserts that the LCB maintained an insurance policy, but fails to provide documentation that the policy provides sufficient coverage, or even continues to exist after the abolition of the LCB. Because the record contains inconclusive evidence regarding these critical factors, the county has not shown beyond a genuine dispute that it should be immune to successor liability.”

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