Economic damages awarded to an employee who is terminated in violation of Maryland state law prohibiting employment discrimination do not have to be reduced by the amount of unemployment benefits received by the employee post-termination. The Maryland Court of Special Appeals recently reached this holding in Edgewood Management Corp. v. Jackson, No. 76 (May 30, 2013). See opinion here.

In Edgewood, the jury found that the defendant-employer had constructively terminated the plaintiff-employee in retaliation for opposing a discriminatory practice. That retaliation was considered a discriminatory employment act under a provision of the Montgomery County Code. Maryland state law provides a cause of action for damages for persons subjected to a discriminatory employment practice that is prohibited by the code of Baltimore, Howard, Montgomery, or Prince George's County. MD. CODE ANN., STATE GOV’T, §§ 20-1202, -1203. The jury awarded economic damages to the plaintiff, which included back-pay. The trial court later reduced that award by the amount of post-termination unemployment benefits that the plaintiff had received.

In reversing the trial court’s decision, the Court of Special Appeals relied on the “collateral source rule.” That rule, as the Court of Special Appeals explained in its Edgewood decision, “permits an injured person to recover the full amount of his or her provable damages, ‘regardless of the amount of compensation which the person has received for his injuries from sources unrelated to the tortfeasor.’” (internal citation omitted). The Court of Special Appeals stated that the “majority of federal circuit courts considering the applicability . . . of the collateral source rule to unemployment benefits in actions brought under Title VII have held that an employee’s damages should not be offset by unemployment benefits received” and that it found the rationale of this majority line of cases to be persuasive.