Maryland Business Law Blog

If You Want to Arbitrate a Lawsuit, Arbitrate

Posted by Edward Sharkey on Thu, 05/10/2012 - 21:51

In a recent opinion, a California court enforced a rule that applies in most states, including Maryland: a business may waive its right to compel arbitration of a lawsuit if it does not act reasonably promptly to invoke the right.

In the case, a claimant sued a business. The business had a contractual right to force the claimant to arbitrate the claim. Instead of moving to dismiss in favor of arbitration, however, the company answered the complaint, responded to discovery requests, and filed a motion to dismiss on other grounds. Four months later, the company made a demand for arbitration.

The court rejected the demand, and the appellate court affirmed. It found that the company had waived its right to arbitrate by delaying and participating in the litigation.

There are many good reasons not to arbitrate, which we will not belabor here. But when a party does want to arbitrate rather than litigate a claim in court, it is imperative to make the demand promptly. Any delay, substantive participation in the lawsuit, or conduct inconsistent with an interest in arbitration could be grounds for a court to deny the demand.

Don't Rent to Pitbulls

Posted by Edward Sharkey on Tue, 05/08/2012 - 14:16

In a recent opinion, the Maryland Court of Appeals established a standard of strict liability for harm caused by pit bulls (or pit bull mixed breeds). This is different from the standard applicable to every other dog, where liability must be based upon proof that the owner had reason to know of the dog's dangerous propensity. The traditional standard is why people commonly suggest that dogs are given "one free bite" before their owner will be held liable for injuries they cause.

The case is relevant to businesses that rent property because the persons subject to liability are the dog's owner "or other person who has the right to control the pit bull's presence on the subject premises." This includes a landlord. Most businesses renting residential property likely already ban dogs or, at minimum, pit bulls. If not, this is the case that warrants it. A landlord will be liable for any and all harm caused by a pit bull living at, and potentially even just visiting, the premises.

Maryland Is First State to Ban Employers From Seeking Facebook Passwords

Posted by Edward Sharkey on Thu, 05/03/2012 - 20:03

Effective October 1, 2012, a new law will make it illegal for Maryland businesses to require employees or applicants to turn over passwords to their social media accounts.

There are good reasons for the law. There also are good reasons for exceptions. One exception in the statute is for companies that believe a personal account was used for business purposes and need to ensure compliance with securities or financial laws.

There is no exception, however, based upon the sensitive nature of the job at stake. For example, a school is not allowed to look at the Facebook page of an applicant who will have control of young children.

Privacy advocates hail the law as great for business. They say being restricted from accessing the information means businesses cannot be liable for it. That is fine as far as it goes, but freedom from liability is not the pinnacle of business success. Good businesses do care about the welfare of their clients.

The tension between privacy and security is one of the great debates of our time. This law definitely favors privacy. We may be revisiting the issue in the future after a teacher with a shady Facebook page (open to "friends" but not his employer) harms a child at school.

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