Title: Baltimore Harbor v. Ayd

State: maryland

Issuer: Maryland Supreme Court

Document:

Baltimore Harbor Charters, Ltd. v. Frank Joseph Ayd, III., No. 114, September Term, 2000.
[Labor and Employment – Scope of the Maryland Wage Payment and Collection Act, Code, Lab. & Emp.
§3-501, et seq., held: upholding purposes of statute that does not define term “employee” as used therein
requires consideration of factors derived from the law of agency concerning the right of the employer to
control the individual’s work, the nature of the work being performed by the individual, whether the
individual engages in an independently established trade, occupation, profession, or business, whether
employer supplies instrumentalities, tools, and location for individual to perform work, who pays individual’s
wages, and whether individual has ownership interest in business; determination of status as an employee
under the statute must be made by the trier of fact; employer must pay all wages conceded to be due to
the employee at time of termination of employment regardless of existence of a bona fide dispute concerning
the total amount of wages due].
IN THE COURT OF APPEALS OF
MARYLAND
No. 114
September Term, 2000
BALTIMORE
HARBOR CHARTERS, LTD.
v.
FRANK JOSEPH AYD, III
Bell, C.J.
Eldridge
Raker
Wilner
Cathell
Harrell
Battaglia,
JJ.
Opinion by Battaglia, J.
Filed:     September 12, 2001
Petitioner Baltimore Harbor Charters, Ltd. challenges the decision of the Court of
-1-
Special Appeals, Baltimore Harbor Charters v. Ayd, 134 Md. App. 188, 759 A.2d 1091
(2000), which ordered a new trial on the issue of whether BHC violated the Maryland Wage
Payment and Collection Law, Maryland Code,§ 3-501, et seq. of the Labor and Employment
Article (1991, 1999 Repl. Vol.), with regard to a former employee and former shareholder of
BHC, respondent Frank Joseph Ayd, III (hereinafter “Ayd”).
I.  Facts
In 1983, Ayd, who had a long-standing interest in boating and mechanics, purchased
Summer Flight, a fifty-three foot Pacemaker boat.  After a five year period of repair and
restoration, Summer Flight finally received certification by the United States Coast Guard,
permitting it to be used in a charter boat business in the Baltimore and Annapolis area.  In
1989, Ayd and a friend, Suzanne Edwards, formed Baltimore Harbor Charters, Ltd. (“BHC”),
to which Ayd’s new wife, Carol, acceded as a shareholder and board member in 1991.  In the
same year, pursuant to an informal action of the Board of Directors of BHC, Ayd was
“employed to perform management and consulting services on a part-time basis for the
Corporation in consideration of the sum of $200.00 per month, payable monthly until
terminated by him or the Corporation on ninety (90) days notice.”
By 1993, the Ayds began divorce proceedings, precipitating an effort to sell their
respective interests in BHC.  Additionally, Edwards had resolved to leave BHC.  During the
same period, Robert Berman, a high school friend of both Ayd and his brother, was attempting
to explore new investment opportunities.  He purchased all of the outstanding shares of
common stock of BHC from Ayd, Carol Ayd, and Suzanne Edwards for approximately $3,500.
1
In July 1992, Ayd, his wife, and Edwards signed a document entitled “Informal Action
of the Board of Directors of Baltimore Harbor Charters, Ltd.,” which provided in relevant part
as follows:
“Further Resolved:  that Frank J. Ayd, III is hereby employed to perform
management and consulting service on a part-time basis for the Corporation in
-2-
The purchase of the common stock of BHC, however, did not include use of Ayd’s boat,
Summer Flight, in the charter boat business.  
In the Spring of 1994, Berman purchased a seventy-five foot yacht, The Wrecking
Crew, for $365,000 from a boat dealer in Fort Lauderdale, Florida, to be used in BHC.  Ayd
organized and performed substantial improvements to The Wrecking Crew, later renamed The
Royal Blue, in order to bring the vessel within the appropriate standards for Coast Guard
certification and prepare it for use in the charter business.
After the purchase of the stock of  BHC, Berman became Vice President of BHC,
named Ayd as President and Treasurer of the company, and made Rita O’Brennan, Ayd’s sister,
the Corporate Secretary.  Throughout the transition of ownership of BHC, Ayd continued to
perform the same managerial and consulting functions he had performed for BHC since the
time of the company’s formation in 1989.  From the winter of 1994 until August of 1996, Ayd
was the sole signatory on BHC’s checking account.  Berman, however, believed that during this
time period he was also an authorized user of the account.
Both BHC and Ayd agreed that from the time Berman purchased BHC in February 1994
to the day Ayd resigned from the corporation, Ayd was entitled to compensation in the amount
of a $200 captain’s fee per charter and a $200 per month administrative fee.1  Ayd, however,
consideration of the sum of $200.00 per month, payable monthly until
terminated by him or the Corporation on ninety (90) days notice.”
This agreement referring to the $200.00 per month administrative fee to be paid to Ayd for his
“management and consulting services” remained in effect at the time Berman purchased BHC.
The parties also had an oral agreement, which is not in dispute, concerning Ayd’s entitlement
to a fee of $200.00 per charter trip that he captained.
2
The informal action of February 25, 1994, signed by Berman, Ayd, and O’Brennan
declared:
“The undersigned, constituting the members of the Board of Directors
of Baltimore Harbor Charters, Ltd., (BHC), a Maryland Corporation, in
accordance with Section 2-408(c) of the Corporations and Associations Article
of the Annotated Code of Maryland, do hereby take the actions below set forth,
and to evidence their waiver of any right to dissent from such actions, do hereby
consent as follows:
RESOLVED:  that Frank J. Ayd, III is hereby employed by BHC to perform
management, consulting, and such other services as the Board of Directors may
direct, and to serve as President of BHC, in consideration of the sum of
$576.92 per week, payable weekly until terminated by him or the Corporation
on ninety (90) days notice.
The above resolution constitutes the Informal Action of the Board of Directors of
Baltimore Harbor Charters, Ltd., as of the 25th day of February, 1994.”
-3-
asserted that pursuant to an “Informal Action of the Board of Directors of Baltimore Harbor
Charters, Ltd.,” which was memorialized on February 25, 1994, he was to be paid the sum of
$576.92 per week for management, consulting and other services, as well as for performing
his functions as President and Treasurer of BHC.2   The original executed document, which was
to be placed in the minute book of the corporation following its execution, was not located at
the time of trial in this matter.  Berman maintained that the informal action of the board on
February 25, 1994 never took place.  A copy of the executed document  was produced by Rita
3
In addition to the various agreements concerning Ayd’s salary, the parties also had an
oral agreement by which Berman sublet a boat slip at Tindeco Wharf from Ayd for $430.00
per month for The Royal Blue.
-4-
O’Brennan pursuant to a BHC subpoena in November of 1997.3 
Under the terms of the informal board action of February 25, 1994, Ayd did, in fact,
receive six payments of the $576.92 salary for his services in the winter of 1994.  BHC,
however, did not have an adequate cash flow thereafter, which resulted in Ayd being paid only
sporadically for his administrative services and captain’s fees and not receiving any further
payments of the $576.92 weekly salary.  
In March of 1994, Ayd’s boat, Summer Flight, which also served as his residence, had
to go into drydock for repairs.   Berman gave Ayd permission to stay onboard The Royal Blue,
because Ayd was without funds and needed a place to live.  Pursuant to this oral arrangement,
Ayd designed and built small living quarters onboard The Royal Blue.  Berman never objected
to the modifications made by Ayd to The Royal Blue, nor did he ask Ayd for payment for living
on the boat.  At trial, however, Berman asserted that Ayd’s residence on The Royal Blue served
as a form of compensation for his services.
BHC continued to experience financial difficulties throughout 1995 and 1996.  In
August of 1996, Ayd received a letter from Berman explaining that Berman would be taking
over the financial operation of BHC.  Berman stated that he began asking Ayd for the
company’s books in the Spring of 1996, but perceived that Ayd was stalling him by not turning
them over.  Ayd asserted that prior to receiving the August 1996 letter, he received no
-5-
indication that Berman was displeased with his work for the company.  In late August of 1996,
Berman closed the existing bank accounts for BHC and opened a new account without Ayd as
a signatory.  
After futile attempts to resolve their differences, Ayd sent a letter to Berman on August
26, 1996, indicating that if the two could not arrive at a mutual agreement by September 9,
1996 at 9:00 pm regarding the future of Ayd’s position in the company, then Ayd would resign
from BHC.  The parties had one meeting to discuss Ayd’s continued employment with BHC,
with the issue of Ayd’s salary being a point of contention.  The parties failed to reach an
agreement, and Ayd terminated his employment with BHC, as promised, on September 9,
1996.  When he left BHC, Ayd took with him his personal effects, tools and other belongings
which he had brought onto The Royal Blue from his boat, Summer Flight, as well as materials
he had installed onto The Royal Blue from Summer Flight so that The Royal Blue could use
the boating slip Ayd rented for Summer Flight.
On July 9, 1997, Ayd sued BHC in the Circuit Court for Baltimore City, alleging breach
of contract, quantum meruit, unjust enrichment, and a claim for unpaid wages in violation of
the Maryland Wage Payment and Collection Act, (the “Wage Act”), Md. Code, Lab. & Emp.
§  3-501 et seq. (1991, 1999 Repl. Vol.).  The complaint alleged that Ayd had only been paid
a total of $9,861.55 in salary and administrative fees during the period of February 1994 to
September 9, 1996.  He alleged that he was entitled to payment of the $576.92  weekly salary
as specified in the informal action of the board, as well as unpaid tip fees of $40.00 (twenty
percent of the crew fee) per charter trip that he captained.  Ayd sought a total of $81,187.28
-6-
in unpaid wages under his breach of contract claim, treble damages totaling $243,561.84 under
the Wage Act, and $300,000 on his claims of unjust enrichment and quantum meruit.  BHC
filed a counterclaim against Ayd alleging breach of a fiduciary duty, conversion, and trespass
to chattels.
On January 13, 1999, a four-day jury trial began.  At the close of Ayd’s case-in-chief,
both Ayd and BHC presented motions for judgment pursuant to Md. Rule 2-519 (1999), which
were denied, with the exception of BHC’s motion regarding Ayd’s claims under the Wage Act.
The trial court reserved decision on the Wage Act claim.  Prior to instructing the jury, the trial
judge ruled on the reserved issue and dismissed Ayd’s claim under the Wage Act, stating as
follows:
Alright [sic].  The Court is going to dismiss the Count.  It’s
in the Court’s view that the statute was not designed to cover the
situation as outlined in the Plaintiff’s case.  The statute
contemplates (1) a regular pay period, (2) where an employee is
generally paid bi-weekly, and (3) in check or currency.  In a light
most favorable to the Plaintiff, the facts in this case show, that
there was no regular pay periods.  The Defendant controlled the,
excuse me.  The Plaintiff controlled the Defendant’s accounts up
to and including the date, in 1996, when the Defendant took over
the books.  He had the, he being the Plaintiff, had the control to
write payroll checks himself and to pay himself whenever the
cash was available.  His testimony is that he voluntarily deferred
during the time that he worked with Baltimore Harbor Charters,
did not take any commissions or tips which may have been due
him, voluntarily.  The only thing of value that was consistently
used during the period of 1994 to 1996 was a place to stay.  That
is the charter boat itself, and it is the view of this Court that these
are not the facts, the types of situations that were covered by the
wage and hour law.  Therefore, I’m going to dismiss Plaintiff’s
Count II.
4
In the Court of Special Appeals, BHC argued that the Circuit Court for Baltimore City
erred in denying its motion for a judgment notwithstanding the verdict based on BHC’s failure
to renew its motion for judgment at the close of all evidence.  134 Md. App. 188, 196, 759
A.2d 1091, 1095 (2000).  BHC also argued that the trial court erred by failing to credit the full
amount of money shown on Ayd’s W-2 forms against the jury’s award on Ayd’s breach of
contract claim in ordering the remittitur.  Id. at 203, 759 A.2d at 1099.  BHC also challenged
the trial court’s decision to admit a photocopy of the Informal Board Action of February 25,
1994 in evidence.  Id. at 211, 759 A.2d at 1103.  In his cross-appeal, Ayd challenged the trial
court’s decision to order a remittitur, and to dismiss his claim under the Wage Act.  Id. at 193,
759 A.2d at 1093.
The Court of Special Appeals held that the trial court did not err in denying BHC’s
motion for a judgment notwithstanding the verdict.  Id. at 198, 759 A.2d at 1096.  With regard
to both parties’ issues concerning the remittitur, the Court of Special Appeals affirmed the
trial court.  Id. at 199, 759 A.2d at 1096.  
The copy of the Informal Board Action of February 25, 1994 had been admitted in a
group of corporate records without objection by counsel for BHC.  BHC objected to
submission of the copy to the jury, and the trial court overruled the untimely objection.  The
Court of Special Appeals affirmed the trial court’s decision.  Id. at 216, 759 A.2d at 1106.  It
remanded the case for a determination solely on Ayd’s claim under the Wage Act.  Id. at 211,
759 A.2d at 1103.
-7-
The jury returned a verdict in favor of Ayd on his breach of contract claim and unjust
enrichment claim, awarding him $76,099.33 on each count.  The jury returned a verdict in favor
of BHC on the breach of fiduciary duty claim in the amount of $4,000.00.
In response to the jury award, BHC filed a motion for a new trial, judgment
notwithstanding the verdict, and remittitur.  A hearing was held on the motions on February 26,
1999.  The trial judge ruled that she would grant a new trial unless Ayd agreed to accept a
remittitur reducing the jury award to $66,237.78.  On March 5, 1999, Ayd accepted the
remittitur.
Thereafter, BHC filed an appeal and Ayd filed a cross-appeal with the Court of Special
Appeals.4  Ayd argued, inter alia, that the trial court erred as a matter of law in dismissing his
Although a plaintiff who accepts a remittitur would ordinarily be barred from seeking
appellate review, see Kneas v. Hecht Company, 257 Md. 121, 123-24, 262 A.2d 518, 520
(1970),  § 12-301 of the Courts and Judicial Proceedings Article of the Maryland Code (1974,
1998 Repl. Vol.) states that “a plaintiff who has accepted a remittitur may cross-appeal from
the final judgment.”  When BHC appealed the judgment of the Circuit Court to the Court of
Special Appeals, it opened the door for Ayd’s cross-appeal on the Wage Payment and
Collection Act.  See Surratt v. Prince George’s County, 320 Md. 439, 461, 578 A.2d 745,
756 (holding that “a plaintiff who has accepted a remittitur may cross-appeal if the defendant
in the case has noted an appeal, at least when the plaintiff has not accepted payment of the
reduced judgment and filed an order of satisfaction”).  Although Ayd accepted the remittitur,
Ayd never received payment on the judgment and did not file an order of satisfaction in this
case.
5
BHC presented the following questions in its Petition for Writ of Certiorari:
1.
Did the Circuit Court properly dismiss the employee’s claim under the Wage
Collection Act?
2.
Did the Circuit Court err in permitting into evidence a crucial document
supposedly indicating a weekly salary for the employee, which document was
challenged as a fabrication and which initially was excluded from evidence,
-8-
claim for treble damages for BHC’s violation of the Wage Act. In a reported decision,
Baltimore Harbor Charters, Ltd. v. Ayd, 134 Md. App. 188, 759 A.2d 1091 (2000), the Court
of Special Appeals held that, “administrative, executive, and professional employees, who
under the Act may be paid irregularly or less frequently than the standard two-week pay period,
are entitled to prompt payment of wages upon termination in accordance with section 3-505,
and are entitled to the enforcement remedies provided in section 3-507.1.”  Id. at 208, 759
A.2d at 1101.  
BHC filed a Petition for Writ of Certiorari pursuant to § 12-203 of the Maryland Code,
Courts and Judicial Proceedings Article (1974, 1998 Repl. Vol.) and Maryland Rule 8-301
(2001), arguing that the trial court properly dismissed Ayd’s claim under the Wage Act.  We
granted the petition and issued a writ of certiorari to consider that issue.5  We hold that the trial
because the employer’s trial counsel supposedly failed to object to the inclusion
of this same item in another exhibit containing corporate documents, which
exhibit was admitted?
3.
Did the Circuit Court err in failing to credit, against the revised judgment, the
full amount represented by W-2 statements entered into evidence and
establishing wages paid to the employee?
This Court, however, limited the order granting the petition to consideration of Ayd’s
claims under the Wage Act.
-9-
court erred as a matter of law in dismissing the Wage Act claim, and accordingly, we affirm
the decision of the Court of Special Appeals to reinstate Ayd’s claim under the Wage Act.
Therefore, we order that this case be remanded to the Circuit Court for Baltimore City for a
trial on Ayd’s Wage Act claim.
II.  Discussion
In the case sub judice, the trial court dismissed Count II of Ayd’s complaint, relating
to the Wage Act, by partially granting BHC’s motion for judgment.  Pursuant to Md. Rule 2-
519(a), “A party may move for judgment on any or all of the issues in any action at the close
of the evidence offered by an opposing party, and in a jury trial at the close of all the evidence.”
We have explained the formalities of the motion for judgment as follows:
The issue traditionally presented by such a motion is a
purely legal one – whether, as a matter of law, the evidence
produced during [the non-moving party’s] case, viewed in a light
most favorable to [the non-moving party], is legally sufficient to
permit a trier of fact to find that the elements required to be
proved by [the non-moving party] in order to recover have been
established by whatever standard of proof is applicable.  To frame
the legal issue, the court must accept the evidence, and all
inferences fairly deducible from that evidence, in a light most
favorable to [the non-moving party]; it is not permitted to make
credibility determinations, to weigh evidence that is in dispute, or
-10-
to resolve conflicts in the evidence.
The Driggs Corp. v. Maryland Aviation Admin., 348 Md. 389, 402, 704 A.2d 433, 440
(1998).  
In cases tried by a jury, a trial court entertaining a motion for judgment must view the
evidence and inferences to be made from the evidence in the light most favorable to the non-
moving party.  See Metromedia Co. v. WCBM Maryland, Inc., 327 Md. 514, 518, 610 A.2d
791, 793 (1992)(quoting Md. Rule 2-519(b)); Allstate Ins. v. Miller, 315 Md. 182, 186, 553
A.2d 1268, 1270 (1989);  Impala Platinum Ltd. v. Impala Sales, Inc., 283 Md. 296, 327, 389
A.2d 887, 905 (1978).  Therefore, in reviewing the trial court’s decision to grant BHC’s
motion for judgment, we must examine the elements of a cause of action under the Wage Act
to determine whether there were any disputed issues of material fact or inferences to be made
therefrom which would allow a jury to conclude that Ayd was an employee of BHC entitled to
the protections of the Wage Act, and if so, whether Ayd would be entitled to receive treble
damages for a violation of the Act along with court costs and reasonable attorneys’ fees.  See
Nelson v. Carroll, 355 Md. 593, 600, 735 A.2d 1096, 1099 (1999).
The central component of both parties’ arguments before this Court, and the argument
which was dispositive for the trial court’s dismissal of Ayd’s Wage Act claim, is whether Ayd
may properly be classified as an employee of BHC entitled to protection under the Wage Act.
If Ayd is considered an employee for purposes of the Act, BHC argues that Ayd would not be
entitled to treble damages, attorneys’ fees, and costs in a successful action to recover his
unpaid wages since there was a “bona fide dispute” as to the amount of wages owed to Ayd at
-11-
the time he resigned his employment with BHC.  The resolution of both arguments on this
issue is a matter of statutory interpretation.
A.  Ayd’s Status as an Employee of BHC
We begin the process of interpretation by examining the plain meaning of the words of
the statute to determine if it would be possible for a trier of fact to find that Ayd was an
employee of BHC.  See Mid-Atlantic Power Supply Ass’n v. Public Service Comm’n of
Maryland, 361 Md. 196, 203-204, 760 A.2d 1087, 1091 (2000).  The “definitions” portion
of the Wage Act states as follows:
(a) In general. – In this subtitle the following words have the meanings
indicated.
(b) Employer. – “Employer” includes any person who employs an individual in
the State or a successor of the person.
(c) Wage. – (1) “Wage” means all compensation that is due to an employee for
employment.
(2) “Wage” includes:
(i) a bonus; 
(ii) a commission;
(iii) a fringe benefit; or
(iv) any other remuneration promised for service.
Maryland Code, § 3-501 of the Labor and Employment Article (1991, 1999 Repl. Vol.).  The
statute does not, however, contain a definition of the term “employee” as used therein.
Because the words of a statute cannot be given full and complete meaning if viewed in
isolation, we consider the statute as a whole rather than analyzing the components as separate
and distinct from one another, so as to not render any portion of the statutory scheme
“meaningless, surplusage, superfluous or nugatory.”  Government Employees Insurance Co.
v. Insurance Comm’r, 332 Md. 124, 132, 630 A.2d 713, 717 (1993).  As we have stated
-12-
before, 
“when we pursue the context of statutory language, we are not
limited to the words of the statute as they are printed....We may
and often must consider other external manifestations or
persuasive evidence, including a bill’s title and function
paragraphs, amendments that occurred as it passed through the
legislature, its relationship to earlier and subsequent legislation,
and other material that fairly bears on the fundamental issue of
legislative purpose or goal, which becomes the context within
which we read the particular language before us in a given case.”
Tipton v. Partner’s Management Co., 364 Md. 419, 435, 773 A.2d 488, 497-98
(2001)(quoting Kaczorowski v. Mayor & City Council of Baltimore, 309 Md. 505, 514-15,
525 A.2d 628, 632-33 (1987)(internal quotations omitted).  When the words of the statute are
plain and unambiguous, “according to their commonly understood meaning,” we need not look
to external sources and our inquiry ends. Chesapeake Amusements, Inc. v. Riddle, 363 Md.
16, 28, 766 A.2d 1036, 1042 (2001)(quoting Chesapeake & Potomac Tel. Co. of Maryland
v. Dir. of Fin. for Mayor and City Council of Baltimore, 343 Md. 567, 578, 683 A.2d 512,
517 (1996)).  We may always consider, however, relevant case law, legislative history, and
other material concerning the drafting of the statute in order to understand the context in which
it was enacted.  See Mayor & City Council of Baltimore v. Chase, 360 Md. 121, 131, 756
A.2d 987, 993 (2000)(“the resort to legislative history is a confirmatory process; it is not
undertaken to contradict the plain meaning of the statute.”).  It is important to understand the
“particular problem or problems the legislature was addressing, and the objectives it sought to
attain” with the creation of the Wage Act.  Sinai Hosp. of Baltimore v. Department of
6
The 1966 version of the Maryland Wage Payment and Collection Law states as follows:
(a)
Pay periods; payment on termination of employment. –  All employers
engaged in the operation of any business establishment shall establish regular pay periods and
shall pay salaried employees, except executive, administrative, and professional employees,
and employees paid on an hourly rate at least once every two weeks or twice in each month.
Upon termination of employment an employee shall be paid all wages or salaries due him for
work performed prior thereto; such payment shall be made to said employee, or to his
authorized agent, on or before the date on which he would have been paid for such work had his
employment not been terminated.
(b)
Method of payment.  –  Payment of wages or salaries shall be in lawful money
of the United States or check payable at face value upon demand in lawful money of the United
States.
(c)
Authorization to withhold part of wages or salaries; statement of gross wages
and deductions.  –  No employer shall withhold any part of the wages or salaries of any
employee except for payroll, wage or withholding taxes or in accordance with law, without the
written and signed authorization of the employee.  An employer, upon request of his employee,
shall furnish the latter a written statement of the gross wages earned by the employee during
any pay period and the amount and purpose of any deductions therefrom.
(d)
Penalty.  –  An employer who violates this section shall be fined not less than
fifty dollars nor more than three hundred dollars.
(e)
Proceedings to enforce compliance with section.  –  The Commissioner of
Labor and Industry may require a written complaint of the violation of this section and, with
the written and signed consent of an employee, may institute proceedings on behalf of an
employee to enforce compliance with this section, and to collect any moneys unlawfully
withheld from such employee which shall be paid to the employee entitled thereto.
Maryland Code, Art. 100, § 94 (1957, 1966 Cum. Supp.)
-13-
Employment and Training, 309 Md. 28, 40, 522 A.2d 382, 388 (1987).  
In 1966, the General Assembly enacted the Wage Act, codified at Code, Art. 100, §94
(1957, 1966 Cum. Supp.), relating generally “to wage payment and collection, imposing
requirements as to the regularity, frequency and medium of wage payments and permissible
deductions therefrom; providing for penalties, and conferring enforcement duties and powers
on the Commissioner of the Department of Labor and Industry.”  1966 Md. Laws, ch. 686.6
-14-
Thus, the enactment of the Wage Act gave the State the ability to litigate  wage disputes on
behalf of  private citizens who were suffering the abuse of non-payment of wages from their
employers. 
The laws relating to Labor and Employment under the Wage Act were recodified in
1991 as part of the general code revision effort.  The Overview to House Bill 1, which was
enacted as the Labor and Employment Article of the Maryland Code, described the revisions
as follows: 
The goal in revising is to rewrite the law in a more clear and
concise manner without making any substantive changes.  Where
there is clear legislative intent, inconsistent provisions are
reconciled, obsolete language is deleted, and gaps in the statute
are filled.  Thus, while the language of a revision differs from the
derivative statute, the legislative intent does not change.
The General Assembly amended the relevant portions of the Wage Act as to include the
definitions of § 3-501, supra, as well as the following:
§ 3-502.  Payment of wage.
(a)  Pay periods.  
(1)
Each employer:
(i)
shall set regular pay periods; and
(ii)
except as provided in paragraph (2) of this subsection, shall pay
each employee at least once in every 2 weeks or twice in each
month.
(2)
An 
employer 
may 
pay 
an 
administrative, 
executive, 
or
professional employee less frequently than required under
paragraph (1)(ii) of this subsection.
(b)  
Paydays. If the regular payday of an employee is a
nonworkday, an employer shall pay the employee on the
preceding workday.
(c)  
Form of payment.  –  Each employer shall pay a wage:
(1)
in United States currency; or
(2)
by a check that, on demand, is convertible at face value into
7
The Fiscal Note for House Bill 1006, dated March 1, 1993, contained the following
statement:
“The Wage Payment and Collection Law was enforced by the
Employment Standards Service of the Division of Labor and
Industry.  However, all funding for the Employment Standards
Service was eliminated on November 1, 1991, which in turn
eliminated the Comissioner of Labor’s ability to investigate
complaints and determine whether the Law had been violated.
Because the Law did not give employees the option of bringing
-15-
United States currency.
(d)
Effect of section.  This section does not prohibit the direct
deposit of the wage of an employee into a personal bank account
of the employee in accordance with an authorization of the
employee.
§ 3-505.  Payment on termination of employment.
Each employer shall pay an employee or the authorized
representative of an employee all wages due for work that the
employee performed before the termination of employment, on
or before the day on which the employee would have been paid
the wages if the employment had not been terminated.
1991 Md. Laws, ch. 8, § 2, codified at Maryland Code, §§ 3-502 and 3-505 of the Labor and
Employment Article (1991).
Although the Act provided for public sanctions against employers who failed to pay
employees’ wages for the work which they had performed already, budgetary constraints in
1991 rendered State enforcement of the Act a virtual nullity.  See Hearings on H.B. 1006
Before the House Economic Matters Committee, Floor Report.  It then became necessary for
the General Assembly to revisit the Wage Act and fashion a new remedy for employees to
obtain the wages owed to them by their employers.7  In 1993, the General Assembly amended
action against their employer, employees have had to rely on
general statutes relating to contract disputes.  This bill allows
employees to bring actions for violations of the Wage Payment
and Collection Law.”
8
The definitions in § 3-501 were not amended or altered.
-16-
the Wage Act to provide employees with a private cause of action against employers for failure
to pay wages owed to the employee upon termination of the employment relationship.  1993
Md. Laws, ch. 578.  The statute, effective October 1, 1993, states:
(a) 
 In general.  –  Notwithstanding any remedy available
under § 3-507 of this subtitle, if an employer fails to pay an
employee in accordance with § 3-502 or § 3-505 of this subtitle,
after 2 weeks have elapsed from the date on which the employer
is required to have paid the wages, the employee may bring an
action against the employer to recover the unpaid wages.
(b)
Award and costs.  –  If, in an action under subsection (a)
of this section, a court finds that an employer withheld the wage
of an employee in violation of this subtitle and not as a result of
a bona fide dispute, the court may award the employee an amount
not exceeding 3 times the wage, and reasonable counsel fees and
other costs. 
Maryland Code, § 3-507.1 of the Labor and Employment Article.8  Writing for the Court in
Battaglia v. Clinical Perfusionists, Inc., 338 Md. 352, 658 A.2d 680 (1995), Judge Rodowsky
noted that the treble damages, costs and fees provisions of § 3-507.1 provide greater
incentives for employers to pay employees in-full for services rendered than the common law
causes of action in quantum meruit or breach of contract.  See id. at 358-59, 658 A.2d at 683.
The primary argument raised by BHC is that the trial court properly dismissed Ayd’s
claim under the Wage Act because Ayd was not an employee of BHC, but rather, an officer and
9
The term “employee,” however, has been defined legislatively in various forms
throughout the Maryland Code to fit the context in which it is used within a given piece of
legislation.  See Maryland Code, § 12-101 of the Business Regulations Article (secondhand
precious metal object dealers and pawnbrokers); § 3-405 of the Commercial Law I
Article(employer liability for fraudulent endorsement by an employee); § 15-601 of the
Commercial Law II Article (attachment of wages); § 5-301 of the Courts and Judicial
Proceedings Article (local government tort claims act); § 5-560 of the Family Law Article
(child care facilities); § 9-101 of the Financial Institutions Article (savings and loan
associations); § 15-302 of the Insurance Article (group health insurance plans); § 15-1102 of
the Insurance Article (franchise health insurance policies); § 5.5-101 of the Labor and
Employment Article (railroad safety and health); § 5-101 of the Labor and Employment Article
(occupational safety and health); § 5-401 of the Labor and Employment Article (access to
information about hazardous and toxic substances); § 4-501 of the Labor and Employment
Article (employment rights for public safety officers); § 4-601 of the Labor and Employment
Article (firefighters and emergency medical personnel); § 17-201 of the State Finance and
Procedure Article (public work contracts); § 11-101 of the State Personnel and Pensions
Article (employees of the University of Maryland System); § 31-101 of the State Personnel
and Pensions Article (participation in Employees’ Systems); § 6-102.1 of the Transportation
I Article (Drug-free workplace programs for ports); § 7-601 of the Transportation I Article
(labor contracts); Art. 24, § 1-107 (1957, 1998 Repl. Vol.)(residency requirements for county
or municipal employment); Art. 49B, § 15 (1957, 1998 Repl. Vol.)(Human Relations
Commission); Art. 88B, § 2 (1957, 1998 Repl. Vol.)(state police department). 
-17-
did not qualify for the Act’s protections.  In support of its argument, BHC notes that Ayd
served as the President and Treasurer of the corporation, acted in an executive capacity with
regard to the operation and activities of The Royal Blue, controlled the checkbook of the
company, and acted without the daily supervision of Mr. Berman.   In essence, Ayd could have
and should have paid himself.  Additionally, BHC asserts that in the absence of an actual pattern
of payment, Ayd cannot establish that he was an employee entitled to the protections of the
Wage Act.  
As noted above, the Wage Act defines the term “employer” as used in the statute, but
does not provide a specific definition of an “employee.”9  BHC contends that as President and
-18-
Treasurer of the corporation, Ayd is properly classified as an “administrative, executive, or
professional employee,” as set forth in Md. Code, Lab. & Emp.§ 3-502(a)(2), a classification
which BHC argues should somehow bar Ayd from the protections of the Wage Act’s
provisions concerning payment upon termination of employment as set forth in § 3-505.
Section 3-502, however, relates solely to the frequency of payment to administrative,
executive, and professional employees; it does not obviate the Act’s protection for such
employees.  As the Court of Special Appeals noted in its decision below, “we may consider the
Legislature’s explicit exception of  ‘administrative, executive, or professional employees’ in
section 3-502 as evidence that the absence of a similar exception in sections 3-505 and 3-
507.1 reflects the Legislature’s intent that those provisions would cover all employees.”
Baltimore Harbor Charters, Ltd. v. Ayd, 134 Md. App. at 209, 759 A.2d at 1102.  We have
long applied the principle of statutory construction, “expressio unius 
est 
exclusio
alterius”–the expression of one thing is the exclusion of another.  See Stanford v. Maryland
Police Training and Correctional Comm’n, 346 Md. 374, 383, 697 A.2d 424, 428 (1997);
Biggus v. Ford Motor Credit Co., 328 Md. 188, 214, 613 A.2d 986, 999 (1992); Gay
Investment Co. v. Comi, 230 Md. 433, 438, 187 A.2d 463, 466 (1963); Johns v. Hodges, 62
Md. 525, 538 (1884).  Thus, if the General Assembly had intended to exclude administrative,
executive and professional employees from the provisions of §§ 3-505 and 3-507.1, or
otherwise limit the application of these provisions to that class of employees,  it would have
10
For example, the Wage Acts of the District of Columbia and Kentucky exempted
individuals employed “in a bona fide executive, administrative, supervisory, or
professional capacity . . . .” Ky. Rev. Stat. Ann. § 337.010(2)(a)2 (Michie 1995); D.C.
Code Ann. § 36-101(2) (1997).
11
Webster’s New World College Dictionary (4th Ed. 1997) defines employee as “a person
hired by another, or by a business firm, etc., to work for wages or salary.”
12
The following states have not enacted wage payment and collection legislation
comparable to the Maryland Wage Payment and Collection Act: Alabama, Arkansas, Florida,
Georgia, Mississippi, and Virginia.
-19-
expressly done so.10
Because the Wage Act is silent with regard to a definition of the word “employee” as
used in the statute, and the legislative history does not provide sufficient guidance as to the
scope and meaning of the term “employee,” we will consider the legislative and interpretive
wisdom of other jurisdictions regarding analogous legislative themes.  See Williams v. Mayor
& City Council of Baltimore, 359 Md. 101, 146, 753 A.2d 41, 65-66 (2000)(examining case
law of other jurisdictions for factors to be considered in determining whether a “special
relationship” exists for tort claims arising out of police action or inaction); Chevy Chase
Land Co. v. United States, 355 Md. 110, 124, 733 A.2d 1055, 1062 (1999)(considering
definitions of the railroad term “right of way” as used in other jurisdictions for purposes of
interpreting parties’ rights under a deed).
In drafting the Wage Act, the Maryland General Assembly neither provided a definition
for the term “employee,” as used in the statute, nor did it limit the potential scope of the
term.11  In addition to Maryland, forty-two states and the District of Columbia have enacted
legislation concerning the payment of wages to employees upon termination of employment.12
13
Ariz. Rev. Stat. Ann. § 23-350 (West 1995); Colo. Rev. Stat. Ann. § 8-4-101 (West
1994); Conn. Gen. Stat. § 31-71a (1997); Del. Code Ann. tit. 19, § 1101 (1995); D.C. Code
Ann. § 36-101 (1997); Haw. Rev. Stat. § 388-1 (1993); Idaho Code § 45-601 (2000); 820 Ill.
Comp. Stat. 115/2-2 (West 1999); Iowa Code Ann. § 91A.2 (West 1996); Kan. Stat. Ann. §44-
313 (2000); Ky. Rev. Stat. Ann. § 337.010 (Michie 1995); Me. Rev. Stat. Ann. tit. 26, § 626
(West 2000); Mass. Gen. Laws Ann. ch. 149, § 148B (Lexis 1999); Mich. Comp. Laws Ann.
§ 408.471 (West 1999); Mont. Code Ann. § 39-3-201 (1999); Neb. Rev. Stat. § 48-1229
(1998); Nev. Rev. Stat. Ann. § 608.010 (Michie 2000); N.H. Rev. Stat. Ann. § 275:42 (2000);
N.J. Stat. Ann. § 34:11-4.1(b) (West 2000); N.M. Stat. Ann. § 50-4-1 (Michie 2000); N.Y. Lab.
Law § 190 (Consol. 1983); N.C. Gen. Stat. § 95-25.2(4) (1999); Ohio Rev. Code Ann. §
4111.01 (Anderson 2000); Okla. Stat. Ann. tit. 40, § 165.1 (West 1991); Or. Rev. Stat. §
652.210 (1999); R.I. Gen. Laws § 28-14-1 (2000); S.D. Codified Laws § 60-11-2 (Michie
1993); Vt. Stat. Ann. tit. 21, § 341 (2000); W. Va. Code § 21-5-1 (1996). 
The District of Columbia and Kentucky statutory provisions define “employee” to
exempt any individual employed “in a bona fide executive, administrative, supervisory, or
professional capacity . . . .” Ky. Rev. Stat. Ann. § 337.010(2)(a)2 (Michie 1995); D.C. Code
Ann. § 36-101(2) (1997).
14
Alaska Stat. § 23.05.140 (Lexis 2000); Cal. Lab. Code § 200 et seq. (West 2001); Ind.
Code Ann. § 22-2-9-1 et seq. (Michie 1997); La. Rev. Stat. Ann. § 23:631 (West 1998); Minn.
Stat. Ann. § 181.13 (West 2001); Mo. Ann. Stat. § 290.110 (West 1993); N.D. Cent. Code §
34-14-03 (1987); Pa. Stat. Ann. tit. 43, § 260.1 et seq. (West 1992); S.C. Code Ann. §41-10-
10 et seq. (West 2000); Tenn. Code Ann. § 50-2-103 (1999); Tex. Lab. Code Ann. §61.014
(West 1996); Utah Code Ann. § 34-28-1 et seq. (1997); Wash. Rev. Code §49.48.010 (2000);
Wis. Stat. Ann. § 109.01 et seq. (West 1997); Wyo. Stat. Ann. § 27-4-101 et seq. (Lexis
1999).
-20-
A majority of the jurisdictions provide a definition for the term “employee” as used in the
statutes.13  The remaining jurisdictions use the word “employee” in their statutes, but do not
provide specific definitions for the term.14  Many states include a broad definition of
employee, such as “any person suffered or permitted to work by an employer.”  See e.g. Conn.
Gen. Stat. § 31-71a(2) (1997).  Even where a state has not provided a definition of employee
in the statute, the application of the statute may be limited through an exclusionary provision.
15
The Court further discussed its historical analysis and development of the construction
of the term “employee” in this context as follows:
[The doctrine of respondeat superior] was founded on the
principle that “every man, in the management of his own affairs,
whether by himself or by his agents or servants, shall so conduct
them as not to injure another; and if he does not, and another
thereby sustains damage, he shall answer it.”  Farwell v. Boston
& Worcester R.R. Corp., 4 Metc., Mass., 49, 55, 38 Am. Dec.
339, 340.  The courts, however, have regarded the doctrine with
jealousy and have confined it within limits as narrow as are
consistent with the true interests of society.    Wood, Master and
-21-
See Utah Code Ann. § 34-28-1 (1997)(excluding employees of the state or local governments,
and household domestic service from the statutory provision concerning payment of wages at
separation from payroll).
Where a statute applies to “employees” but fails to provide a definition for the term
“employee,” the United States Supreme Court has recognized that this term may be interpreted
in harmony with the common-law distinctions observed between the terms employees or
agents, and those classified as independent contractors.  See Community for Creative Non-
Violence v. Reid, 490 U.S. 730, 739-40, 109 S. Ct. 2166, 2172, 104 L. Ed. 2d 811, 824
(1989).  In the context of the doctrine of respondeat superior, we have stated that “we
definitely decided that the test in determining whether a person is a servant or an independent
contractor is whether the employer has the right of control over the employee in respect to the
work to be performed.” Henkelmann v. Metropolitan Life Insurance Company, 180 Md. 591,
599, 26 A.2d 418, 422 (1942)(citing State, to use of Boznango v. Blumenthal-Kahn Electric
Co., 162 Md. 84, 92, 159 A. 106, 109 (1932)).15  We have also concluded that in the context
Servant, 2d Ed., Sec. 277.  In 1840 the courts in England began
to relax the doctrine by holding that it does not apply to
independent contractors.  In 1869 the Court of Appeals of
Maryland, in an opinion by Judge Alvey, observed that the
doctrine had been modified by the English decisions, and held
that it is not applicable where the employee is “a contractor,
pursuing an independent employment, and by the terms of the
contract, is free to exercise his own judgment and discretion as
to the means and assistants that he may think proper to employ
about the work, exclusive of the control and direction, in this
respect, of the party for whom the work is being done.”  Deford
v. State, to use of Keyser, 30 Md. 179, 203.  In 1884 the Court
of Appeal[s] said that the theory upon which liability under the
doctrine is predicated is that the master is constructively present,
so that the negligence of the servant is the negligence of the
master.  Adams v. Cost, 62 Md. 264, 267, 50 Am. Rep. 211.  In
1901 this Court stated that an essential element of the relation of
master and servant is that the master shall have control of the
employment and all of its details.  Baltimore Boot & Shoe Mfg.
Co. v. Jamar, 93 Md. 404, 413, 49 A. 847, 850, 86 Am. St. Rep.
428.
Henkelmann v. Metropolitan Life Insurance Company, 180 Md. at 598-99, 26 A.2d at 422.
-22-
of the former Maryland Workmen’s Compensation Act, Maryland Code (1957, 1985 Repl.
Vol.), Art. 101, (repealed in its entirety by 1996 Md. Laws ch. 10, § 15), “[t]he words
‘employer’ and ‘employee’ in the statute are equivalent to and synonymous with the words
‘master’ and ‘servant.’” Brady v. Ralph Parsons Co., 308 Md. 486, 499, 520 A.2d 717, 724
(1987).  We continued, as follows:
...the test for determining the existence of an employer and
employee relationship under the Act is the same as the common
law rules for ascertaining the relation of master and servant.  That
test inquires whether the employer has the right to control and
direct the servant in the performance of his work and in the
manner in which the work is to be done.  In administering this
-23-
test, we have established five criteria to consult for guidance.
These include: (1) the power to select and hire the employee, (2)
the payment of wages, (3) the power to discharge, (4) the power
to control the employee’s conduct, and (5) whether the work is
part of the regular business of the employer.
Id. (internal citations omitted).
The analysis employed by this Court in defining the term “employee” under the doctrine
of respondeat superior, and the factors emphasized in Brady have been discussed in the
context of Wage Act claims in other jurisdictions.  While none of the wage payment and
collection statutes of other jurisdictions contains the same language as Maryland’s Wage Act,
California’s statute does contain provisions similar in force and effect to the language
contained in the Maryland Act.  See Cal. Labor Code § 200 et seq. (West 2001).  Like the
Maryland Wage Act,  California does not define the term “employee” in its statute, and it
defines the term “wages” as “all amounts for labor performed by employees of every
description, whether the amount is fixed or ascertained by the standard of time, task, piece,
commission basis, or other method of calculation.”  Cal. Lab. Code § 200 (West 2001).
Regarding the termination of employment by an employer, the California statute states that,
“If an employer discharges an employee, the wages earned and unpaid at the time of discharge
are due and payable immediately.”  Cal. Lab. Code § 201.  Where an employee has resigned his
or her employment, the California statute provides that, “If an employee not having a written
contract for a definite period quits his employment, his wages shall become due and payable
not later than seventy-two hours thereafter, unless the employee has given seventy-two hours
previous notice of his intention to quit, in which case the employee is entitled to his wages at
16
As commonly used in modern statutes, the term “employee” is analogous to the class
of person historically described or defined as a servant.  See Restatement (Second) of Agency,
§ 2, comment d.
Restatement (Second) of Agency, § 220 defines a servant as follows:
-24-
the time of quitting.”  Cal. Lab. Code § 202.
In case law interpreting whether a person is an employee entitled to protection under
the California statute, the Superior Court of California stated as follows:
In determining whether one is an employee or an independent
contractor, the California Supreme Court has adopted the test of
the Restatement of Agency, section 220:  In determining whether
one who performs services for another is an employee or an
independent contractor, the most important factor is the right to
control the manner and means of accomplishing the result
desired.  If the employer has the authority to exercise complete
control, whether or not that right is exercised with respect to all
details, an employer-employee relationship exists.  Strong
evidence in support of an employment relationship is the right to
discharge at will, without cause.  Other factors to be taken into
consideration are (a) whether or not the one performing services
is engaged in a distinct occupation or business; (b) the kind of
occupation, with reference to whether, in the locality, the work is
usually done under the direction of the principal or by a specialist
without supervision; (c) the skill required in the particular
occupation; (d) whether the principal or the workman supplies the
instrumentalities, tools, and the place of work for the person
doing the work; (e) the length of time for which the services are
to be performed; (f) the method of payment, whether by the time
or by the job; (g) whether or not the work is a part of the regular
business of the principal; and (h) whether or not the parties
believe they are creating the relationship of employer-employee.
Zaremba v. Miller, 169 Cal. Rptr. 688, 689 (Cal. App. Dep’t Super. Ct. 1980)(internal
citations and quotations omitted).16  In applying these factors, the court emphasized that “the
(1) A servant is a person employed to perform services in the
affairs of another and who with respect to the physical conduct in
the performance of the services is subject to the other’s control
or right to control.
(2) In determining whether one acting for another is a servant or
an independent contractor, the following matters of fact, among
others, are considered:
(a) the extent of control which, by the agreement, the
master may exercise over the details of the work;
(b) whether or not the one employed is engaged in
a distinct occupation or business;
(c) the kind of occupation, with reference to whether, in
the locality, the work is usually done under the direction
of the employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the
instrumentalities, tools, and the place of work for the
person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is a part of the regular
business of the employer;
(i) whether or not the parties believe they are creating the
relation of master and servant; and
(j) whether the principal is or is not in business.
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most crucial consideration is the right to exercise complete control over the work, including
its details.”  Id.  We have applied with equal force, an emphasis on the element concerning the
master or employer’s right to control the work of the servant or employee in cases relating to
other statutes and common-law causes of action.  See Mackall v. Zayre Corp., 293 Md. 221,
230, 443 A.2d 98, 103 (1982); Gallagher’s Estate v. Battle, 209 Md. 592, 602, 122 A.2d 93,
97-98 (1956).
Other jurisdictions have applied factors similar to those used by the California court
-26-
in determining the existence of an employer-employee relationship for purposes of wage
collection actions brought by former employees.  See Cavic v. Pioneer Astro Industries, Inc.,
825 F.2d 1421, 1426 (10th Cir. 1987); Doherty v. Kahn, 682 N.E. 2d 163, 173 (Ill. App. 1
Dist. 1997)(explaining that the statute does not apply to employees who are free from control
and direction over the performance of their work); Lorentz v. Coblentz, 600 So.2d 1376, 1381
(La. App. 1st  Cir. 1992)(focusing on “selection and engagement, payment of wages, power of
dismissal, and control” in resolving a person’s employment status); Taylor v. Kennedy, 719
A.2d 525, 527-28 (Me. 1998)(applying common law “right to control” test to determine if
plaintiff was an employee within the statute as set forth in Murray’s Case, 154 A. 352, 354
(Me. 1931)); Cook v. Burke, 693 S.W.2d 857, 861 (Mo. App. 1985)(finding plaintiff was an
employee where although she served in a management capacity, she had no ownership in the
business and no share in the profits, and no “discretion to affect the general policy of the
business”).
The factors considered in this Court’s opinions regarding the doctrine of respondeat
superior and construction of the term “employee” under the principles enumerated in
Restatement (Second) of Agency, as well as the case law interpreting the term “employee”
under the wage act statutes of other jurisdictions provide an appropriate framework for
determining whether an individual is an employee covered by the Maryland Wage Payment and
Collection Act.  Such factors include:
1.
Whether the employer actually exercised or had the right to
exercise control over the performance of the individual’s work;
-27-
2.
Whether the individual’s service is either outside all the usual
course of business of the enterprise for which such service is
performed;
3.
Whether 
the 
individual 
is 
customarily 
engaged 
in 
an
independently established trade, occupation, profession, or
business;
4.
Whether it is the employer or the employee who supplies the
instrumentalities, tools, and location for the work to be
performed;
5.
Whether 
the 
individual 
receives 
wages 
directly 
from 
the
employer or from a third party for work performed on the
employer’s behalf; and
6.
Whether the individual held an ownership interest in the business
such that the individual had the ability and discretion to affect the
general policies and procedures of the business.
See Brady, 308 Md. at 499, 510, 520 A.2d at 724,730; Mackall, 293 Md. at 230, 443 A.2d at
103; Gallagher’s Estate, 209 Md. at 600-601, 122 A.2d at 97; Henkelmann, 180 Md. at 598-
99, 26 A.2d at 422; Restatement (Second) of Agency §2, comment d, and § 220.
On remand, there are many factual nuances for the finder of fact to consider in applying
these six factors to determine whether Ayd should be classified as an employee of BHC.  First,
did Berman, as the Vice President and sole shareholder of BHC have the right to exercise
-28-
control over the performance of Ayd’s work?  The emphasis on the right to exercise control
is whether Berman could have exercised control over Ayd, not whether he actually did.  If
believed by the fact finder, testimony adduced by Ayd at trial supported the proposition that
throughout his ownership of BHC, Berman had the ability to direct and exercise control over
Ayd.  
Second, did the services Ayd performed for BHC, including but not limited to
administrative services, repairs, maintenance, sales, and captaining The Royal Blue fall within
the usual course of operating a charter boat business?  According to other evidence at trial, if
credited by the fact finder, Berman named Ayd as President of BHC in order to give potential
customers the sense that they were dealing with someone who had greater authority in the
operation of BHC.  Acting in his capacity as President, Ayd worked as a salesman for BHC.
He also performed all necessary repairs and maintenance on The Royal Blue to prepare the
vessel for charter trips. 
The third factor concerns whether Ayd was customarily working in his own interest,
albeit also being beneficial to BHC.  In other words, was his status similar to that of an
independent contractor?  It is clear, if the testimony adduced at trial is accepted by the fact
finder, that Ayd was not an independent contractor.
The fourth factor asks, did Ayd use any of his own equipment in providing maintenance
for The Royal Blue, which also served as his residence?  There was testimony at trial indicating
that Ayd used some of his own equipment in repairing and maintaining The Royal Blue, and
also used a computer and software belonging to BHC in performing his bookkeeping and
-29-
administrative functions.
In examining the fifth factor concerning the payment of wages, BHC argues that the
payments which it made to Ayd from the winter of 1994 until Ayd ceased working for BHC in
September 1996 do not suffice to establish a pattern of payment by which a finder of fact
could determine that Ayd was an employee of BHC entitled to the protections of the Wage
Act.  We disagree.  The facts of this case indicate that Ayd had received some payment for his
services in the form of the monthly administrative salary of $200.00, several payments of the
disputed weekly salary amount of $576.92, and captain’s fees in the amount of $200.00 per
charter, albeit not on a regular schedule and not in the full amount owed for services
performed.  The Wage Act contains no provision which would exclude someone who is
otherwise an employee from statutory protection based on the employer’s failure to set regular
pay periods.  See § 3-502.  To follow BHC’s argument that the absence of a regular pattern of
payment should preclude an individual from being classified as an employee would undermine
the protective purposes of the Wage Act by leaving those employees who suffer the most
egregious abuse of non-payment of wages by their employers from ever recovering the money
owed to them for services rendered.  See Edgewater Liquors, Inc. v. Liston, 349 Md. 803,
808, 709 A.2d 1301, 1303 (1998)(“we avoid construing a statute so as to lead to results that
are unreasonable, illogical, or inconsistent with common sense”)(citing Marriott Employees
Fed. Credit Union v. Motor Vehicle Admin., 346 Md. 437, 445, 697 A.2d 455, 459 (1997);
Frost v. State, 336 Md. 125, 137, 647 A.2d 106, 112 (1994); Holman v. Kelly Catering, 334
Md. 480, 487, 639 A.2d 701, 705 (1994); Kaczorowski, 309 Md. at 516, 525 A.2d at 633).
-30-
BHC contends that Ayd is not entitled to the salary which he should have been paid
during his employment with BHC because Ayd controlled the accounting books and checking
account for the corporation and refrained from paying himself a regular salary.  The testimony
at trial showed that Berman knew that Ayd had not been paid due to BHC’s financial
difficulties.  As the business relationship between Berman and Ayd deteriorated during the
summer of 1996, Berman sought control of the checking account.  When Ayd resolved to
terminate his employment with BHC, Berman had sole authority over the checking account.
Thus, when he left his employment with BHC, Ayd did not have the access by which to pay
himself the money owed to him by the company.  
The Missouri Court of Appeals examined an argument factually similar to the payment
issues involved in the instant case in Cook v. Burke, 693 S.W.2d 857 (Mo. App. 1985).  In
Cook, the former employee, who had been in charge of payroll and timekeeping as part of her
work responsibilities, held her payroll checks for a period of three months with her employer’s
knowledge, because the business experienced chronic financial difficulties leaving insufficient
funds in the business’s bank account to cover payment of her salary.  Id. at 859.  When the
former employee was discharged, however, the Missouri court found that she ceased being
payroll manager, and became unable to pay herself the wages which she was owed; thus the
employer remained responsible for the payment of all wages due on the date of discharge.  Id.
at 860-61.  The reasoning applied by the Missouri court in Cook may be applied with equal
force and effect to the matter now before us.  If a trier of fact concludes that Ayd is an
employee entitled to protection under the Wage Act, BHC cannot escape liability for the
-31-
wages owed based on Ayd’s conduct in refraining from taking his salary during BHC’s
protracted periods of financial instability.
Finally, under the sixth factor of the employee analysis, the trier of fact would have to
determine if Ayd did have an ownership interest in BHC which would have given him the ability
and discretion to affect the general policies and procedures of the business.  At trial, both
parties admitted that from February 1994 to September 9, 1996, Ayd held no ownership
interest in BHC whatsoever.  
We hold, therefore, that the issue of whether Ayd was an employee under the Wage Act
was withheld improperly from the jury by the trial court’s dismissal.
B.  Bona Fide Dispute
BHC’s final contention is that the treble damages, attorneys’ fees and costs provisions
of § 3-507.1 of the Wage Act do not apply to situations such as the case at bar, where a bona
fide dispute exists between the employer and the employee.  The existence of a bona fide
dispute under § 3-507.1 is a question of fact left for resolution by the jury, not the trial judge.
See Admiral Mortgage v. Cooper, 357 Md. 533, 551, 745 A.2d 1026, 1035 (2000).  In
Admiral Mortgage, we explained the definition and existence of a “bona fide dispute” as
follows:
All of the definitions articulated by the courts focus really
on whether the party making or resisting the claim has a good
faith basis for doing so, whether there is a legitimate dispute over
the validity of the claim or the amount that is owing.  The issue is
not whether a party acted fraudulently; fraud is certainly
inconsistent with the notion of “bona fide” or “good faith,” but it
is not required to establish an absence of good faith.  The
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question, simply, is whether there was sufficient evidence
adduced to permit a trier of fact to determine that [the employer]
did not act in good faith when it refused to pay... [the employee]...
Id. at 543, 745 A.2d at 1031.
In Admiral Mortgage, we also explained that the existence of a bona fide dispute under
§ 3-507.1 affects whether treble damages, attorneys’ fees and costs may be awarded at the
discretion of the jury.  Id. at 542, 745 A.2d at 1030-31.  A jury may find that a bona fide
dispute existed between an employer and an employee over the amount of wages owed to the
employee at the time of termination of employment while also finding that the employer owes
the employee money for services rendered.  Ayd’s recovery of the weekly salary of $576.92,
however, is not dependant upon the existence of a bona fide dispute between Ayd and BHC.
Id. at 541, 745 A.2d at 1030.  A finding by the jury that a bona fide dispute existed at the time
of termination of employment ends any inquiry as to whether the employee would be entitled
to receive additional damages according to the provisions of   § 3-507.1.
At trial, both Ayd and Berman agreed that Ayd was to be paid $200.00 per month for
administrative services, and $200.00 each time he captained a charter trip on The Royal Blue,
but disputed that Ayd was owed a $576.92 weekly salary.  The statute clearly states that when
employment is terminated, employers must pay employees “all wages due for work that the
employee performed before the termination of employment.”  § 3-505.  Although BHC paid
the monthly administrative fee and captain’s fees to Ayd on a more regular basis than the
contested $576.92 weekly salary, BHC had not paid the undisputed amounts in full to Ayd at
the time of termination of employment.  The failure to pay an employee wages conceded to
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be owed to him for work performed prior to the termination of his employment is a violation
of § 3-505 of the Wage Act, regardless of which party terminates the employment
arrangement, and regardless of whether the termination was in violation of an employment
contract.  See Battaglia, 338 Md. at 362-63, 658 A.2d at 685-86.  The jury however, may
consider the employer’s ability to pay the disputed amount at the time of discharge in
determining whether the employer acted with good faith concerning the existence of a bona
fide dispute under § 3-507.1.
In addition, the “bona fide dispute” provision of § 3-507.1 contains no language which
would permit BHC to withhold the amounts it conceded it owed to Ayd.  Thus, where an
employer alleges the existence of a bona fide dispute as to the total amount of wages owed to
an employee (in this case, the weekly salary of $576.92) yet concedes that a certain amount
of wages are due (the $200.00 per month for administrative services and $200.00 per charter
trip that captained), the employer acts at his or her peril in failing to pay the conceded amount.
Even where the finder of fact agrees with the employer concerning the total sum owed, the
penalty provision of § 3-507.1, which allows for an employee to be awarded up to three times
the amount of wages owed, will apply to those amounts which were not in dispute but for which
the employer failed to make timely payment upon termination as specified in § 3-505.
Based on certain facts the evidence presented at trial, it would be possible for a
reasonable trier of fact to conclude that BHC did not withhold payment of the wages owed to
Ayd at the time he terminated his employment as a result of a bona fide dispute.  Matters of
witness credibility and a weighing of the facts to determine the existence of a bona fide dispute
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are  properly left for resolution by the jury on remand. 
Accordingly, we remand this case for a trial solely on Ayd’s claim under the Maryland
Wage Payment and Collection Law.
JUDGMENT OF THE COURT OF SPECIAL
APPEALS 
AFFIRMED 
IN 
PART 
AND
VACATED IN PART.  CASE REMANDED TO
THE COURT OF SPECIAL APPEALS WITH
INSTRUCTION TO VACATE THAT PART OF
THE JUDGMENT OF THE CIRCUIT COURT
FOR BALTIMORE CITY DISMISSING
RESPONDENT’S CLAIM UNDER THE
MARYLAND 
WAGE 
PAYMENT 
AND
COLLECTION ACT AND TO REMAND THE
CASE TO THE CIRCUIT COURT FOR A NEW
TRIAL OF THAT CLAIM IN ACCORDANCE
WITH THIS OPINION.  COSTS IN THIS
COURT AND THE COURT OF SPECIAL
APPEALS TO BE PAID BY THE PETITIONER.