Ms. Elste was awarded temporary total disability benefits in the Workers' Compensation Commission ("Commission") for injuries suffered in the course of her employment. Sparrows Point petitioned for judicial review in the Circuit Court for Baltimore City on the issues of accidental injury and notice. The issues for decision were whether the injury to Ms. Elste's right knee arose out of the course of her employment and whether she gave Sparrows Point timely notice of her injury. The jury returned a mixed verdict and found in favor of Ms. Elste on the issue of accidental injury but concluded that she did not give timely notice to Sparrows Point.

Ms. Elste appealed to the Court of Special Appeals of Maryland and presented a single question for review: did the trial court err in denying her motions for judgment and motion for judgment notwithstanding the verdict when Sparrows Point presented no evidence that it suffered any actual prejudice as a result of a nine-day delay in receiving notice of the injury. The Court of Special Appeals of Maryland reversed the judgment of the Circuit Court and remanded with instructions to affirm the order of the Workers' Compensation Commission.

MD. CODE ANN., LAB. EMPL. § 9-704 requires an injured worker to report an accidental injury within ten days of the injury. Unless excused by the Commission under § 9-706, failure to give notice bars a claim for workers' compensation. Id. Section 9-706 in turn provides that the notice requirement can be excused, however, if the employer or its insurer has not been prejudiced by the failure to comply. Section 9-702 provides a presumption that sufficient notice is always given by an employee. Thus, under the statutory scheme, Ms. Elste was required to report her injury to Sparrows Point within ten days of July 27, 2006; however, in the proceeding before the Commission, notice was presumed sufficient and the Commission was required to excuse insufficient notice unless Sparrows Point proved prejudice. The issue of whether Sparrows Point was prejudiced by the untimely notice was an essential issue on appeal.

Sparrows Point argued that Ms. Elste's untimely notice prejudiced it because it could not evaluate whether her knee injury occurred on the job or while she was on vacation; however, Sparrows Point could not point to any specific evidence that showed it was prejudiced by Ms. Elste's untimely notice. Unfortunately, no Maryland case was found that interpreted the meaning of "prejudice" under § 9-706.

The term "prejudice" in § 9-706 is clear and unambiguous. Even though the word "prejudice" as used in § 9-706(b) has not been interpreted by any appellate court in Maryland, the burden under § 9-706(b) is not distinct from the burden to show "actual prejudice" under MD. CODE ANN., INS, § 19-110, different from the burden to show prejudice in any other legal context. Moreover, Webster's Dictionary defines "prejudice" as "injury or damage resulting from some judgment or action of another in disregard of one's rights; esp: detriment to one's legal rights or claims." Black's Law Dictionary defines "prejudice" as "damage or detriment to one's legal rights or claims." Thus, in this context, an employer must show that a failure to comply with the ten-day notice requirement harmed its ability to defend against a claim for workers' compensation; otherwise, the failure is excused. In order to meet its burden of production on the issue of prejudice, an employer must offer some evidence, beyond the hypothetical, that a failure to receive notice within ten days of the employee's accidental injury actually harmed its legal interest.

With regard to prejudice, Sparrows Point made three arguments: (1) if Ms. Elste had complied with its internal policy of immediately reporting an injury, it would have had knowledge of her condition prior to her vacation; (2) Sparrows Point is a large unionized steel plant and if accidents are not reported promptly it makes investigation burdensome and ineffective; and (3) this was not a case where Sparrows Point had actual knowledge of the accident when it occurred, and therefore, it could respond immediately. The problem with these arguments was that they were entirely inconsistent with the statutory scheme. The question was not whether Sparrows Point was prejudiced by Ms. Elste's failure to comply with its internal reporting procedure but whether Sparrows Point was prejudiced by Ms. Elste's failure to comply with the notice requirement of § 9-704(b)(1).

Ms. Elste had ten days from the day of her injury to report it. Under the statutory scheme, an employer may lack actual knowledge of the injury and the employee may engage in any number of activities that might have caused the injury. Thus, the employer may be deprived of an opportunity to immediately investigate the accident or evaluate the injured employee. Nevertheless, notice is still sufficient if given within ten days of the injury.

The Court of Special Appeals of Maryland held that an employee's mere participation in some intervening activity, or an employer's inability to conduct an immediate investigation, cannot by themselves, constitute prejudice. Rather, the employer must offer some specific evidence of how it was harmed by not receiving notice within the ten-day period after the accident. In other words, Sparrows Point needed to prove some evidence that a change occurred in Ms. Elste's condition, the scene of the accident, or the memory or availability of witnesses, etc., from day ten after the accident to day nineteen, that hampered its defense. Thus, any evidence of harm to the employer's interest that rises above speculation, hypothesis, and conjecture will suffice.