A recent decision from the Appellate Court of Maryland significantly broadens local governments’ potential liability in employment discrimination and retaliation cases. In Joseph Watts v. Prince George’s County, the Court held that the damage caps under the Local Government Tort Claims Act (LGTCA) do not apply to claims brought under the Maryland Fair Employment Practices Act (MFEPA) or local anti-discrimination ordinances.

Background:
A Prince George’s County jury awarded the plaintiff approximately $1.7 million for employment discrimination and retaliation under MFEPA and the County Code. The County sought to reduce the award under the LGTCA cap, and the circuit court lowered the judgment to $400,000. The plaintiff appealed that reduction.

The Court’s Decision:
The Appellate Court reversed the circuit court, concluding that MFEPA and local anti-discrimination claims are statutory, not tort-based, causes of action. Because the LGTCA cap applies only to damages resulting from “tortious acts or omissions committed by an employee within the scope of employment” (CJP § 5-303(b)(1)), the Court held the cap does not limit local governments’ liability for these statutory employment claims. In effect, local governments now face uncapped exposure under the LGTCA framework when plaintiffs prevail on employment discrimination or retaliation claims under state or local law.

What This Means for Municipalities:

• Liability exposure: The $400,000 per-claim / $800,000 per-occurrence cap under the LGTCA no longer applies to employment discrimination or retaliation claims.

• Insurance and risk management: Municipal risk managers and insurers should reassess coverage limits, reserves, and exposure for employment-law claims.

• Policies and procedures: Review employment policies, training, accommodation practices, and internal complaint procedures to reduce potential liability.

• Budget considerations: Large, uncapped judgments may impact municipal budgets, reserves, or insurance premiums.

Municipal officials should consult with their attorneys and insurance providers to determine how this ruling may affect pending or future claims and to adjust risk management and litigation strategies accordingly.