Tag Archives: retaliation

Tennessee Supreme Court Refuses To Recognize A Claim For Retaliatory Failure to Hire

In Yardley v. Hospital Housekeeping Systems, LLC the Tennessee Supreme Court declined to recognize a cause of action under the Tennessee Workers’ Compensation Act for retaliatory failure to hire.  Beginning in 1998 Ms. Yardley had worked as a housekeeping aide for a hospital in Lebanon.  In 2010 Ms. Yardley was injured on the job and began receiving workers’ compensation benefits.  In January 2012 the hospital entered into a contract with Hospital Housekeeping Systems (“HHS”) whereby HHS would provide housekeeping services for the hospital.  Ms. Yardley applied for employment with HHS and was not hired.

In an email an HHS Vice-President stated in pertinent part that “Ms. Yardley had been out on workers’ comp with the hospital . . . that her shoulder was hurting her again, and that bringing her onboard would seem to be a workers’ comp claim waiting to happen.”  After not being hired Ms. Yardley filed suit claiming that the failure to hire her stated a claim under the Tennessee Workers’ Compensation Act.

In declining to recognize a cause of action for retaliatory failure to hire the Supreme Court relied on the plain language of the Workers’ Compensation Act.  Based on the plain language of the Act, Ms. Yardley was not an employee of HHS and HHS was not her employer.  The Supreme Court also noted that the employment at will doctrine is a bedrock principle of Tennessee Employment Law.  Thus, the Tennessee Supreme Court declined to recognize another exception to the employment at will doctrine.

The biggest take away from the Yardley case for employers is, even though Ms. Yardley cannot state a claim for retaliatory failure to hire under the Tennessee Workers’ Compensation Act, she may very well be able to state a claim for disability discrimination under the American’s With Disabilities Act (“ADA”) and the Tennessee Human Rights Act (“THRA”).  Ms. Yardley may be able to prove that she was not hired because of an actual disability or because HHS regarded her as being disabled.  If she is successful under either theory she would be able to prevail under both the ADA and THRA.

To avoid failure to hire claims under the ADA and THRA do not base hiring decisions on an applicant’s medical condition or disability unless the condition prevents the applicant from performing the essentials functions of the job with or without reasonable accommodation.  Additionally, do not ask questions about an applicant’s medical history unless you have extended the applicant a conditional offer of employment, the same questions are asked of all applicants for that position who have received a conditional offer of employment and the questions are narrowly tailored to the essential functions of the job in question.

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  Recently the Tennessee Supreme Court clarified what an employee must do to qualify as a whistleblower in order to state a claim for retaliatory discharge under Tennessee law.  In Haynes v. Formac Stables, Inc., the plaintiff, a horse groomer for the defendant, claimed he suffered an injury to the head when kicked by a Tennessee Walking Horse.  The plaintiff claimed that when he complained of the injury to the owner the owner only allowed for a veterinarian to seal the wound and would not allow him to receive proper medical treatment.  He further alleged that he was terminated after he complained repeatedly to the owner about headaches stemming from the lack of proper medical care.  The plaintiff did not complain to anyone other than the owner. The Tennessee Supreme Court, in affirming the decision to dismiss the complaint, held that in order to qualify as a whistleblower and state a claim for retaliatory discharge under Tennessee law the employee must report the employer’s wrongdoing to someone other than the wrongdoer.  This means that when the wrongdoer is a manager, owner, or highest ranking officer within the company the employee may have to report the wrongdoing to an outside entity. This decision does not change the fact that under Tennessee law an employee can state a claim for retaliatory discharge by simply refusing to participate in illegal conduct, because the cause of action for refusing to participate does not require reporting of illegal conduct.  It also has no impact on claim for workers’ compensation retaliatory discharge. While this decision is a win for employers it does not change the fact that all employee complaints should be promptly and thoroughly investigated.  The decision also illustrates that it is important for employers to train supervisors to either (1) properly investigate complaints; or (2) report them to the persons within the organization who are responsible for doing so.

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Does An Illegal Alien Have Standing To Bring A Retaliatory Discharge Claim In Tennessee?

In Torres v. Precision Industries, P.I., Inc., et al. the Tennessee Court of Appeals recently answered the question of whether an illegal alien in Tennessee has standing to bring a retaliatory discharge claim.  Mr. Torres worked for Precision Industries as a convertor builder at its automotive manufacturing plant in Whiteville, Tennessee.  Torres was injured on the job and eventually retained a lawyer to represent him in connection with his workers’ compensation claim.  Torres’ lawyer called the defendants seeking the company’s fax number.  After this phone call Precision Industries Safety Manager and General Manager confronted Torres about his workers’ compensation claim and his decision to hire an attorney.  Later that day Torres was terminated for an alleged “lack of work”.  Torres then filed suit alleging he was discharged in retaliation for asserting a workers’ compensation claim.  It is undisputed that during the time he was employed by defendants Torres was an illegal alien.

The trial court granted defendants Motion for Summary Judgment and held that Torres could not assert a retaliatory discharge claim because he was not capable of employment due to his undisputed status as an illegal alien.  Torres appealed this decision to the Tennessee Court of Appeals and the Court of Appeals reversed.

The Court of Appeals first reviewed whether Torres’ immigration status would prevent him from filing a claim for workers’ compensation benefits.  The Court held that for workers’ compensation purposes an employee is anyone employed by another who works for wages or a salary, without regard to whether the employment is legal or illegal.  The Court also relied on a previous decision by the Tennessee Workers’ Compensation Panel, Silva v. Martin Lumber Co., which held that an illegal alien is entitled to workers’ compensation benefits.

After making these finding the Court of Appeals considered defendants’ argument that Torres was incapable of performing the job.  The Court of Appeals reviewed the case relied on by defendants, Leatherwood v. UPS, and held that it stood for the proposition that an employee can be legally fired because he is physically incapable of performing a job, not that an illegal alien lacks standing to bring a retaliatory discharge claim.  As a result, the decision granting summary judgment was reversed and the case was remanded to the trial court for further proceedings.

This case does not mean that employers should ignore the immigration status of their employees.  To the contrary, it is illegal to knowingly employee an illegal alien and doing so can result in significant monetary penalties.  Additionally, terminating an employee because he or she is an illegal alien is a legitimate, non-discriminatory and non-retaliatory reason for the termination.  But an illegal alien who is fired for filing a workers’ compensation claim, or in retaliation for exercising other rights, can bring a retaliatory discharge claim and recover damages regardless of his immigration status.

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Tennessee Employment Law Just Became More Employer Friendly

On July 1st several changes to Tennessee employment law will take effect which are employer friendly.  The changes are to the Tennessee Human Rights Act (“THRA”) the Tennessee Public Protection Act or whistleblower statute (“TPPA”) and the Tennessee Disability Act (“TDA”).

First, under the new law a cap now exists on the amount of compensatory damages that can be awarded under the THRA the TPPA, and the TDA for future monetary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life and other non-monetary losses.  The caps depend on the size of the employer and are as follows:

$25,000 for employers who have between 8 and 14 employees.
$50,000 for employers who have between 15 and 100 employees.
$100,000 for employers who have between 101 and 200 employees.
$200,000 for employers who have between 201 and 500 employees and
$300,000 for employers who have more than 500 employees.

These caps do not apply to back pay, interest on back pay, front pay or any equitable relief.

Second, the new law eliminates individual liability under the THRA.  Previously individuals could be liable under the THRA under certain circumstances.  Now, no individual employee or agent of an employer can be liable for an employer’s violations of the THRA.

Finally, the new law eliminates the common law cause of action for retaliatory discharge.  As a result, the TPPA will be the only source of Tennessee law available for retaliatory discharge claims that are not based on a violation of the THRA or the TDA.  This is a significant win for employers because under the TPPA the employee must prove that his or her protected activity was the “sole reason” for the termination.  The common law claim only requires the employee to prove that the protected activity was a “substantial factor” in the termination, which is an easier standard to meet.

Even though these changes are employer friendly employers should still continue to implement and enforce policies and practices that are designed to treat everyone equally and avoid discrimination and retaliation claims.

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A few months ago I wrote a blog post which discussed how companies that use temporary services or subcontractors can, in certain circumstances be held to be the joint employer of the employees of the temporary service or subcontractor.  You can read that blog post here.  Earlier this month the United States Court of Appeals for the 6th Circuit applied the factors I discussed in that blog post to hold that a general contractor for a construction site in Memphis, Tennessee was the joint employer of one of its subcontractors’ employees.

In EEOC and Maurice Knox v. Skanska U.S.A. Building, Inc. the EEOC and Knox sued Skanska alleging racial discrimination and retaliation in violation of Title VII.  Knox was employed by a subcontractor on the construction site named C-1 Inc. (“C-1”).   Despite this fact the EEOC and Knox argued that Skanska was Knox’s joint employer.  The District Court disagreed with the Plaintiffs and granted summary judgment to Skanska.  On appeal the 6th Circuit reversed.

The 6th Circuit held that Skanska was a joint employer because it could “share or co-determine those matters governing essential terms and conditions of employment.”  In making this finding the Court focused on the following facts:

  • Skanska could remove Knox and other C-1 employees from the jobsite if the employee was “incompetent, disorderly or otherwise unsatisfactory”
  • Skanska routinely exercised its ability to direct and supervise Knox’s performance.
  • Skanska set Knox’s hours and daily assignments.
  • Skanska assigned Knox’s supervisors.
  • Skanska responded to any complaints asserted by Knox.
  • Skanska was responsible for responding to any complaints asserted by Knox and did not consult with C-1 about those complaints.
  • Skanska had Knox sign a document on Skanska letterhead setting forth his job responsibilities.
  • Skanska repeatedly removed C-1’s personnel from the jobsite without any challenge from C-1.

The Skanska decision reinforces that when a company exercises the right to control subcontractor and temporary employees the company will most likely be considered a joint employer of those employees.  Employers should keep this in mind when making staffing decisions and, if controlling the temporary employee or subcontractor’s employee is not important, take the appropriate sets to eliminate or minimize the right to control in an effort to avoid a successful joint employer argument.

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Who Is The Employer of a Temporary Employee?

Do you use temporary employees in your business?  If you answered that question “yes” then you need to know that your company may be considered a “joint employer” of those employees.

If your company exercises the right to control the temporary employees your company  and the company providing the temporary employees (“temp service”) are joint employers of the temporary employees.

Factors to consider in determining who has  the right to control include:

1.who controls when the employees arrive and leave;

2. who controls what the employees do and how they do it;

3. whose policies and procedures govern the employees;

4. who provides the tools and equipment; and

5.  who pays the employees and provides their benefits.

The most significant legal implication of being a joint employer is that temporary employees can pursue a claim against you and the “temp service” for any  discrimination, harassment or retaliation they claim to experience while performing an assignment for your company.  Furthermore, under the Affordable Care Act (ACA) if you have the right to control the temporary employees you use you will have to count them in determining whether you meet the ACA 50 employee threshold.

Temporary employees can provide a valuable service to your business.  But if you use them know that the legal ramifications of doing so may be far more permanent.

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What To Do When The EEOC Comes Knocking

Recently the EEOC listed the 10 states which produced the most charges of discrimination in 2012.  To my suprise Tennessee was 10th on the list.

If your business receives an EEOC Charge (or a charge from a state human rights agency such as the Tennessee Human Rights Commission) you should take the following steps:

1. Litigation Hold- Immediately take steps to preserve all documents which might be relevant to the allegations in the charge.  This process, commonly referred to as a litigation hold, requires you to preserve hard copies as well as electronically stored information, and to suspend normal document retention/destruction practices and policies.

2. Notify your insurer- If you have Employment Practices Liability Insurance send the carrier written notice of the charge.  The failure to do so could result in the insurer denying coverage based on your failure to promptly notify it of the allegations.

3. Notify your attorney- Because statements made in the position statement and the response to the request for information are admissions which can be used against you, and the failure to assert certain defenses might result in  a waiver,  it is important that you get your attorney involved at the outset. If you have EPLI insurance the insurer will likely provide an attorney for you.

4. Investigate- If the charge presents allegations which are new or that have not previously been investigated a prompt, thorough investigation should be conducted.

5. Need to Know- In order to reduce “water cooler gossip” and to avoid retaliation claims,  you should only provide information about the charge to those who have a legitimate need to know the information.

The EEOC charge is often the first stage of what becomes lengthy, costly litigation.  Make sure you are taking the proper steps at the outset to give your business the best possible chance of prevailing.

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Decision-maker’s Lack of Knowledge of Protected Activity Negates $3 Million Retaliation Verdict

In Ferguson v MTSU the Tennessee Court of Appeals negated a $3 Million jury verdict for the plaintiff in a retaliation case because the plaintiff failed to prove that the decision-maker who allegedly retaliated against him had knowledge of the protected activity when the decision  was made.  The plaintiff filed an EEOC Charge and  subsequently a lawsuit alleging race and national origin discrimination, and claimed the supervisor assigned him work outside of his restrictions in retaliation for those protected acts.  A second lawsuit was filed alleging retaliation, and the cases were consolidated for trial. At trial the jury returned a defense verdict on the discrimination claims but awarded the plaintiff $3 Million on his retaliation claims.

The Court of Appeals reversed the jury’s verdict and dismissed the plaintiff’s case.  The Court held that in a  retaliation case under Title VII and the THRA the plaintiff must prove that the person who decided to take the adverse action had knowledge of the protected activity at the time the adverse decision is made.  In so holding the Court of Appeals expressly rejected the argument that “general corporate knowledge” is sufficient to prove the causation element of a retaliation claim.

While this case is a significant victory for employers, (assuming it holds up on appeal) the result does not change the type of review that employers should undertake when any adverse action is proposed against an employee.  Review the proposal thoroughly to make sure the action is warranted, consistent with company policy and that the employee is being treated the same as all other similarly situated employees.  If the employee is known to have engaged in protected activity or is in a known protected class, make sure there is not a connection between the activity or class and the proposed action, and that everyone who has input in the decision is unbiased.

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ACA Retaliation

Most “large employers” ( those employers with at least 50 employees working an average of at least 30 hours a week)  are very aware that the Affordable Care Act (ACA) imposes numerous deadlines and commitments for them  in 2013 and 2014.  But you may not know that the ACA also prohibits retaliation against employees who make complaints that the ACA has been violated.  The US Department of Labor issued an interim rule last week which provides guidance on this issue.

Workers who give their employer, the federal government or a state attorney general information about acts or omissions that they reasonably believe violate Title I of the ACA — which prohibits denying insurance because of pre-existing conditions or using factors like medical history to set premium rates — will be protected from retaliation under Section 18C.

The ACA also prohibits retaliation against employees who receive health insurance tax credits that could translate to a tax penalty for certain large employers.

Retaliation complaints under Section 18C have to be filed within 180 days of when the alleged violation occurs, which means when the retaliatory decision has been made and communicated to the worker.  The limitations clock starts ticking when the employee is aware or reasonably should be aware of that decision, OSHA said, though the time for filing a complaint can be tolled.

Complaints under Section 18C don’t have to be written down, or be in English. An oral complaint can suffice, and if the complainant can’t file in English, any language will do. As long as the employee consents, any person can file a complaint on a worker’s behalf under the rule.

The take away for employers:  If an employee complains that you have violated the ACA take the complaint seriously, investigate it, and make sure the employee is not retaliated against in any way.

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