Tennessee Retaliatory Discharge Claims Against Employers

Tennessee has a statute that protects employees from employers who terminate an employee in retaliation for reporting illegal activities. This statute is found in T.C.A. § 50-1-304 and is called the Tennessee “Retaliatory Discharge” statute.  The design of the statute is to protect employees from being terminated solely for opposing or speaking up about illegal activities at the employer.  It is a whistleblower protection statute that is important to protect employees who have the courage to speak up about illegal activities.

The most important sections of this statute are found which describe the intent and purpose of the statute are found in subsection (b), (c) and (f) as follows:

(b) No employee shall be discharged or terminated solely for refusing to participate in, or for refusing to remain silent about, illegal activities.

(c)(1) Any employee terminated in violation of subsection (b) shall have a cause of action against the employer for retaliatory discharge and any other damages to which the employee may be entitled, subject to the limitations set out in § 4-21-313.

(2) Any employee terminated in violation of subsection (b) solely for refusing to participate in, or for refusing to remain silent about, illegal activities who prevails in a cause of action against an employer for retaliatory discharge for the actions shall be entitled to recover reasonable attorney fees and costs.

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 (f) In any civil cause of action for retaliatory discharge brought pursuant to this section, or in any civil cause of action alleging retaliation for refusing to participate in or remain silent about illegal activities, the plaintiff shall have the burden of establishing a prima facie case of retaliatory discharge. If the plaintiff satisfies this burden, the burden shall then be on the defendant to produce evidence that one (1) or more legitimate, nondiscriminatory reasons existed for the plaintiff's discharge. The burden on the defendant is one of production and not persuasion. If the defendant produces such evidence, the presumption of discrimination raised by the plaintiff's prima facie case is rebutted, and the burden shifts to the plaintiff to demonstrate that the reason given by the defendant was not the true reason for the plaintiff's discharge and that the stated reason was a pretext for unlawful retaliation. The foregoing allocations of burdens of proof shall apply at all stages of the proceedings, including motions for summary judgment. The plaintiff at all times retains the burden of persuading the trier of fact that the plaintiff has been the victim of unlawful retaliation.

Tennessee Caps on Damages for Sexual Harassment Cases

Tennessee sexual harassment cases that are brought against an employer are governed by the Tennessee Human Rights Act. The underlying basis for claims against an employer for sexual harassment fall under the provision in T.C.A. § 4-21-401 that provides that it is a discriminatory practice for an employer to “fail or refuse to hire or discharge any person or otherwise to discriminate against an individual with respect to compensation, terms, conditions or privileges of employment because of such individual’s race, creed, color, religion, sex, age or national origin…”.  Sexual harassment cases fall within this section and I have previously discussed the Tennessee law standard for a sexual harassment case in my prior blog post here.

It is important to note that there are specific caps on damages for Tennessee sexual harassment claims (as well as other discriminatory causes of action brought against employers under the Tennessee Human Rights Act). Specifically, this statute provides the following in T.C.A. § 4-21-313:

(a) For any cause of action arising under § 4-21-401, § 8-50-103, or § 50-1-304, the sum of the amount of compensatory damages awarded for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses, shall not exceed, for each complaining party:

(1) In the case of a cause of action arising under § 50-1-304 and an employer who has less than eight (8) employees at the time the cause of action arose, twenty-five thousand dollars ($25,000);

(2) In the case of an employer who has eight (8) or more but fewer than fifteen (15) employees at the time the cause of action arose, twenty-five thousand dollars ($25,000);

(3) In the case of an employer who has more than fourteen (14) and fewer than one hundred one (101) employees at the time the cause of action arose, fifty thousand dollars ($50,000);

(4) In the case of an employer who has more than one hundred (100) and fewer than two hundred one (201) employees at the time the cause of action arose, one hundred thousand dollars ($100,000);

(5) In the case of an employer who has more than two hundred (200) and fewer than five hundred one (501) employees at the time the cause of action arose, two hundred thousand dollars ($200,000); and

Tennessee Tort of “Intentional Infliction of Emotional Distress”

Tennessee has the tort of Intentional Infliction of Emotional Distress which is an important cause of action that allows a plaintiff to recover damages when the conduct of the defendant is outrageous.  There are very specific requirements for a plaintiff to be able to prove this cause of action in court.  In order to support a claim for Intentional Infliction of Emotional Distress, the Tennessee Supreme Court has held that the following elements are required:

The elements of an intentional infliction of emotional distress claim are that the defendant's conduct was (1) intentional or reckless, (2) so outrageous that it is not tolerated by civilized society, and (3) resulted in serious mental injury to the plaintiff. Regarding the first element, the law is clear in Tennessee and elsewhere that either intentional or reckless conduct on the part of the defendant will suffice to establish intentional infliction of emotional distress.

Rogers v. Louisville Land Company et al, 367 S.W.3d 196, 205 (Tenn. 2012).  The Rogers case is a very important Tennessee Supreme Court case that definitively outlined the requirements for this cause of action.  In this case the court made it very clear that there is no difference between a claim for Intentional Infliction of Emotional Distress and the claim for Reckless Infliction of Emotional Distress. Both are considered part of the same cause of action (either intentional or reckless conduct is sufficient to meet the threshold required for this cause of action).

Further, the familiar standard of “outrageous” conduct that has long been required for an Intentional Infliction of Emotional Distress claim still stands. Specifically, that the conduct must be “so outrageous that it is not tolerated by civilized society”.  Obviously, this is generally a jury issue however courts have long stepped in to evaluate whether the facts of a case meet this threshold before sending the case to the jury.  This standard is a standard that can change over time because it is based on what is tolerated by “civilized society”.  For example, it is my view that certain types of sexual harassment and sexually hostile work environment situations are currently experiencing a shift in what is tolerated by “civilized” society. Importantly, our country is making significant progress on what it considers to be outrageous conduct by individuals who sexually harass women.  It is my position, therefore, that this standard has changed over time and what may not have been considered outrageous conduct in the 1980s certainly is outrageous conduct today.

Equal Pay Act Claims in Tennessee

Equal Pay Act claims in Tennessee are essentially claims usually involve situations where a female employee is paid less than a male employee for the same job.  These claims can be brought in Tennessee under the Tennessee Equal Pay Act (found in T.C.A. § 50-2-201 et al) and under the Federal Equal Pay Act (found in 29 U.S.C. § 206(d)).  These statutes basically are very similar to each other.  These types of pay disparity claims can also be brought under Title VII for sex discrimination.

Initial Burden of the Plaintiff:

To establish a prima facie claim of unequal pay for equal work under the EPA, a plaintiff has the burden to prove that the employer “pays different wages to employees of opposite sexes for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.” Vehar v. Cole Nat'l Group, Inc., 251 Fed.Appx. 993, 998 (6th Cir. 2007).  Essentially, a female employee meets this burden if she proves that she is paid less than a male employee performing the same job (does not need to be perfectly identical but does need to be substantially similar) at the employer.

Defenses Available to Employer:

After this initial burden is met by the employee, then the employer has some available defenses to try to combat a finding of liability under the EPA.  Specifically, once a plaintiff establishes a prima facie case of disparate pay, the burden shifts to the defendant to prove the wage differential is justified under one of four affirmative defenses: “(1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) any other factor other than sex.” Buntin v. Breathitt Cnty. Bd. of Educ., 134 F.3d 796, 799 (6th Cir.1998). 

I...

Sexual Harassment and Sexually Hostile Work Environment Claims in Tennessee – General Overview

Sexual Harassment and Sexually Hostile Work Environment claims are both recognized in Tennessee under state law and federal Law (pursuant to Title VII).  These are very significant claims often involving the harassment of a female by a male supervisor or co-worker.  The standards for an employer’s liability are different under each of those scenarios (this will be discussed in a subsequent blog post on this topic).  It is important to note that Tennessee courts often look to federal law for guidance on interpretation of Tennessee’s own discrimination statutes, because they are so similar.

A sexual harassment “quid pro quo” claim in Tennessee is established using the following elements to support the cause of action:

(1) that the employee was a member of a protected class; (2) that the employee was subjected to unwelcome sexual harassment in the form of sexual advances or requests for sexual favors; (3) that the harassment complained of was based on sex; (4) that the employee's submission to the unwelcome advances was an express or implied condition for receiving job benefits or that the employee's refusal to submit to the supervisor's demands resulted in a tangible job detriment; and (5) the existence of respondeat superior liability.

Sanders v. Lanier, 968 S.W.2d 787, 789 (Tenn. 1998).  This type of claim mainly focuses on unwanted sexual advances or requests for sexual favors.  Believe it or not, these situations are much more common than you would think.  Federal law has similar protections against this type of action in the workplace.

Another type of claim under Tennessee law is a sexually hostile work environment claim.  This is based on sexual harassment of an employee based on their sex.  Often, this could involve crude sexual jokes, sexual comments, inappropriate touching or grabbing and other similar conduct – most often directed at women.  Tennessee courts have provided the following as the elements required for this type of case in Tennessee:

To prevail on a hostile work environment claim in a sexual harassment case, an employee must assert and prove that (1)...

Does Employer’s Admission of Vicarious Liability for Actions of Employee Insulate the Employer from Other Causes of Action?

The Tennessee Court of Appeals recently dealt with an issue that has not been previously discussed by Tennessee Appellate courts in Melanie Jones, Individually and on behalf of Matthew H. V. Shavonna Rachelle Windham, et al., No. W2015-00973-COA-R10-CV, 2016 WL 943722 (Tenn. Ct. App. 2016).  The question deal with the situation where an employer and employee are both sued due to the actions of the employee in causing an automobile accident (while working for the employer).  The employer, in the Answer to Complaint, admitted they were vicariously liable for the actions of the employee.  The question, therefore, was whether the plaintiff could still proceed with other claims against the employer including negligent hiring, negligent retention and negligence per se for their own independent negligent actions when they had already admitted vicarious liability for the actual accident.    

For some reason, the plaintiff wanted to pursue various individual cause of actions directly against the employer in this case.  Perhaps they thought it would increase the damages because the employer took actions that were inappropriate.  Interestingly, many other state courts have decided this issue and they are basically evenly split on how to handle this situation.  Thus, the Tennessee Court of Appeals went into a detailed assessment of the various positives and negatives of both avenues.  The Court ultimately held that the “an employer’s admission of vicarious liability does not bar a plaintiff from proceeding against the employer on independent claims of negligence.” Jones at 5. 

The Court admitted that this holding does make it necessary for trial courts to potentially guard juries from being prejudice by evidence against the employer after vicarious liability is already admitted.  As a result, the Court discussed in detail the possibility of trying to avoid that prejudice by using jury instructions or ultimately by bifurcating the proceedings under Tennessee Rule of Civil Procedure 42.02.   This rule provides as follows: 

The court for convenience or to avoid prejudice may in jury trials order a separate trial of any one or more claims, cross-claims, counterclaims, or third-party claims, or issues on which a jury trial has been waived by all parties. For the same purposes the court may, in nonjury trials, order a separate trial of any one or more claims, cross-claims, counterclaims, third-party claims, or issues.

Legitimate Business Interest Needed to Enforce Tennessee Non-Compete Agreements

The Tennessee Court of Appeals in John Jason Davis v. Johnstone Group Inc. v. Appraisal Services Group, Inc., No. W2015-01884-COA-R3-CV, 2016 WL 908902 (Tenn. Ct. App. 2016) discussed the enforceability of a non-compete agreement and a request for injunctive relief.  The key issues in this case was whether there was a legitimate business protectable business interest that would justify the enforcement of this non-competition agreement.  This case provides a very good overview of Tennessee law on the enforcement of non-competition agreements. 

The Court noted that non-compete agreements are disfavored in Tennessee because they restrain trade (citing Hasty v. Rent-A-Driver, Inc., 671 S.W.2d 471 (Tenn. 1984)).  However, the Court found that Tennessee Courts will still uphold agreements if the restrictions are reasonable.  Additionally, the time and territorial of limits of the agreement must be no greater than is necessary to protect the business interests of the employer (citing Matthews v. Barnes, 293 S.W. 1993 (Tenn. 1927)). 

The Court noted that the Tennessee Supreme Court’s analysis in the Hasty opinion is the key case law on the issue of whether a legitimate business interest justifies the enforcement of the non-competition clause.  Specifically, the Tennessee Supreme Court in the Hasty case said as follows:

Of course, any competition by a former employee may well injure the business of the employer. An employer, however, cannot by contract restrain ordinary competition. In order for an employer to be entitled to protection, there must be special facts present over and above ordinary competition. These special facts must be such that without the covenant not to compete the employee would gain an unfair advantage in future competition with the employer.

Hasty, 671 S.W.2d at 473.  As a result, the employer trying to enforce the agreement must show special facts “beyond protection from ordinary competition that would give” the employee...

Employers Cannot Take Adverse Employment Actions Against Employees for Transporting or Storing Firearms in Employer Parking Area in Tennessee

The 2015 Tennessee Legislature passed a new law found in Public Chapter No. 80 that provides protections to employees who keep firearms in their vehicle in employer provided parking areas.  This law created a new code section found at T.C.A. § 50-1-312.  Basically, this law provides that employers cannot take adverse employment actions against employees solely for transporting or storing a firearm or firearm ammunition in an employer parking area.  If an employee is discharged or subjected to an adverse employment action in violation of this law, then the employee will have a cause of action against the employer to recover damages as well as attorney’s fees and costs. 

Interestingly, the employee has the initial burden of establishing a prima facie case that the adverse employment action was based solely on the transporting or storing of a firearm or firearm ammunition in the employer’s parking area.  Once the employee establishes this fact, the burden shifts to the employer to prove there was one or more legitimate other reasons that existed for the employee’s discharge or adverse employment action.  The statute of limitations for bringing a cause of action under this statute is one year from the date of termination or the date of the adverse employment action. 

The key sections of this new statute are as follows:

(b)(1)(A) No employer shall discharge or take any adverse employment action against an employee solely for transporting or storing a firearm or firearm ammunition in an employer parking area in a manner consistent with§ 39-17-1313(a).

(B) An employee discharged, or subject to an adverse employment action, in violation of subdivision (b)(1)(A) shall have a cause of action against the employer to enjoin future acts in violation of this section and to recover economic damages plus reasonable attorney fees and costs.

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(2) In any action brought pursuant to this section, the employee shall have the burden of establishing a prima facie case of discharge, or adverse employment action, based solely on the employee's transporting or storing a firearm or firearm ammunition in the employer's parking area in a manner consistent with § 39-17-1313(a). If the employee satisfies this burden, the burden shall then be on the employer to produce evidence that one (1) or more legitimate reasons existed for the employee's discharge or adverse employment action. The burden on the employer is one of production and not persuasion. If the employer produces such evidence, the presumption of discharge, or adverse employment action, raised by the employee's prima facie case is rebutted, and the burden shifts to the employee to demonstrate...

Tennessee Legislature Clarifies that Franchisee Employees Are Not To Be Deemed Employees of the Franchisor

The Tennessee legislature in Public Chapter No. 114 clarified Tennessee law on who is considered the employer of franchisee employees.  This was signed into law by Governor Bill Haslam on April 10, 2015 and took effect immediately.  Specifically, employees of franchisees as well as franchisees themselves will not be “deemed to be an employee of the franchisor for any purpose.”  This obviously is important in several different areas of the law.  It can certainly be important for numerous employment law issues including Tennessee employee discrimination or fair labor standard cases.  Additionally, if employees are deemed to be employed by a franchisor, this could lead to an increased level of litigation against franchisors for claims based in premises liability or automobile liability (when a franchisee is involved in an incident or claim).

The Tennessee legislature felt it was important to clarify this issue mainly because of concerns for litigation as well as recent changes in the law on this issue at the national level.  The NLRB recently found that McDonald’s corporation is a joint employer of franchisee employees and is therefore responsible for the actions of the franchisee on labor related issues.  This has caused great concern among franchisor’s for their possible joint liability in certain circumstances.

This new law in Tennessee is an attempt to clarify that under Tennessee law, franchisors will not be considered employers of franchisee employees.  This does not mean that the Federal NLRB findings are nullified.  However, it is a step in the right direction within the context of Tennessee law to protect the important legal separate relationship between franchisors and franchisees.  The entire statute will be found in TCA Title 50, Chapter 1, Part 2 (it has not yet been assigned a formal statute number at this time).  The new statute in its entirety provides as follows:

(a) Notwithstanding any voluntary agreement entered into between the United States department of labor and a franchisee, neither a franchisee nor a franchisee's employee shall be deemed to...

The New Tennessee “Employee Online Privacy Act of 2014” Takes Effect Today (Preventing Employers from Obtaining Access to Personal Internet Accounts Like Facebook)

I previously blogged on the new Tennessee Employee Online Privacy Act of 2014.  The full blog post on this new statute can be found here.  This new statute basically prevents an employer from taking any adverse employment action against an employee for failure to provide access to a “personal internet account” (which basically includes any type of internet account including Facebook or other similar services).  This statute goes into effect today, January 1, 2015.

Employers need to keep this new statute in mind as they venture more and more into the online existence of their employees (or potential employees).  Tennessee has attempted, with this new statute, to protect employees by preventing mandatory access by an employer to an employee’s online information.  Employers can no longer demand access in certain situations covered by the statute.  Employers need to make sure they review and implement policies that comply with this new statute.

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