Supervisor can be held individually liable in Missouri under the Missouri Human Rights Act

Missouri Supreme Court Recognizes Individual Liability Under The Missouri Human Rights Act and Puts a New Twist on the Meaning of "Tangible Employment Action."

Although Missouri courts of appeals in the eastern district previously had found supervisors to be individually liable under the Missouri Human Rights Act (MHRA), the Missouri Supreme Court had not addressed the issue of individual liability until this week. In Hill v. Ford Motor Company , 2009 WL 454281 (Mo. Feb. 24, 2009)(en banc), the Missouri Supreme Court held for the first time that a supervisor can be held individually liable under the Missouri Human Rights Act (MHRA). The Court further held that the fact that the individual supervisor is not listed in the Charge of Discrimination does not automatically prohibit a plaintiff from filing a lawsuit against that individual. Finally, the Court found that an employment action taken after a complaint of harassment might constitute a "tangible employment action," thus depriving the employer of the ability to assert an affirmative defense.

Factual and Procedural Background

Cynthia Hill, an employee at a Ford Motor Company assembly plant, brought suit in state court alleging sexual harassment and retaliation. Specifically, Ms. Hill maintained that her immediate supervisor, Kenny Hune, sexually harassed her, and that when she attempted to discuss the harassment with Paul Edds, a labor relations supervisor, Mr. Edds interrupted her and directed her not to return to work until after she had been seen by a psychiatrist. Mr. Edds rescinded this directive shortly after Ms. Hill contacted the company's employee relations "hotline," but also suspended Ms. Hill for three days for "disrespecting" her supervisor based upon an incident between Ms. Hill and Mr. Hune. After another employee complained that Mr. Hune had sexually harassed her, Mr. Edds conducted an investigation that culminated in Mr. Hune's termination.

The trial court granted summary judgment to Ford, finding, as a matter of law, that Ms. Hill had not suffered a tangible employment action related to the sexual harassment and that Ford had proved its affirmative defense as a matter of law. The trial court also granted summary judgment to Mr. Edds, holding that Ms. Hill had failed to exhaust her administrative remedies as to her claims against Mr. Edds in his individual capacity because she did not name Mr. Edds in her Charge of Discrimination. The court of appeals affirmed these rulings.

Definition of "Employer"

The MHRA provides in pertinent part that it is an unlawful employment practice "for an employer...to discriminate against any individual...because of such individual's race, color, religion, national origin, sex, ancestry, age or disability." The term "employer" is defined under the MHRA to include "any person employing six or more persons within the state, and any person directly acting in the interest of an employer...."

In reversing the trial court's grant of summary judgment, the Missouri Supreme Court recognized that this definition of "employer" establishes that the MHRA "is intended to reach not just the corporate or public employer but any person acting directly in the interest of the employer." The Court held that a "supervisory employee clearly falls into that category," and, therefore, that the MHRA imposes individual liability on supervisory employees who engage in discriminatory conduct.

Because Mr. Edds was acting in the interest of the Ford Motor Company, the Missouri Supreme Court concluded that Mr. Edds could be held to be individually liable under the MHRA if his conduct towards Ms. Hill was discriminatory or retaliatory. The Court further held that a plaintiff may be able to recover against an individual even if s/he did not list that individual in his/her charge of discrimination. The Court provided a list of factors that courts should consider in making this determination and directed the trial court to consider those factors, rather than applying a per se rule prohibiting such claims.

"Tangible Employment Action"

Ms. Hill argued that she suffered a "tangible employment action" due to her rejection of Mr. Hune's sexual advances. In the past, this type of claim was called quid pro quo sexual harassment. Under the MHRA regulations, when a supervisor's harassment culminated in a "tangible employment action," an employer is precluded from asserting the affirmative defense that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior and the employee unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer.

Typically, courts will find the existence of a tangible employment action when the alleged harasser made the initial decision to take the tangible employment action and the decision was a direct result of the plaintiff's rejection of the harasser's sexual advances. However, in Hill v. Ford Motor Company, the Missouri Supreme Court allowed a more attenuated connection between Ms. Hill's rejection of Mr. Hune's sexual advances and the asserted tangible employment action. The Court held that a plaintiff can prevent an employer from asserting an affirmative defense if s/he can show the harassment caused or contributed to the tangible employment action. As a result, the Court found that Mr. Edds' decision to suspend Ms. Hill and refer her to a psychiatrist could constitute a tangible employment action to which Mr. Hune's alleged harassment at least contributed.

Potential Legislation

The Missouri state legislature is considering a bill, House Bill No. 227, that, if passed, would nullify the holding in this case regarding individual liability under the MHRA. Under that proposed legislation, the definition of "employer" would be modified so as to eliminate the reference to "any person directly acting in the interest of an employer," thereby eliminating the statutory basis for individual liability. The proposed legislation also would revise the definition of "discrimination" so as to require that the discriminatory conduct be "an adverse action motivated by" a protected characteristic, as opposed to simply "any unfair treatment based on" a protected characteristic.

Practical Effect

If, and until, any legislation is passed abrogating this decision, it will be binding precedent throughout Missouri. With the addition of individual defendants, an employer's ability to remove discrimination cases to federal court based upon diversity of citizenship will be hampered. State court forums are often more plaintiff-friendly because summary judgment is less common. Additionally, in some counties in Missouri, the jury pools tend to award higher verdicts.

In addition, given the much broader view of "tangible employment action" adopted by the Missouri Supreme Court, plaintiffs may argue that any adverse employment action taken after rejecting sexual advances or complaining about sexual harassment is a tangible employment action, regardless of whether or not the alleged harasser was the decision maker. As a result, an employer's ability to assert its affirmative defense may be diminished.

This decision emphasizes the importance of maintaining effective discrimination and harassment policies and practices, and in educating and training supervisors on those policies and practices on a regular and repeated basis.

Parent corporation liable for violation of employment laws of its subdiary

Topical Highlights - Labor and Employment All Friday, February 02, 2007 ©  Zachary v. Rescare Oklahoma, Inc., (N.D.Okla.) February 2, 2007: Hours and Wages - Parent was "joint employer" liable for damages owed employees under Fair Labor Standards Act. In a case of apparent first impression in the Tenth Circuit, an Oklahoma federal district court has ruled that a parent corporation was a "joint employer" with its subsidiary for purposes of overtime liability under the Fair Labor Standards Act (FLSA). There was specific evidence the parent corporation's employees made or assisted in making all the FLSA decisions that were at issue. In addition the parent exercised general control over the subsidiary's employees. The Administrative Services Agreement (ASA) between the corporations was not controlling in light of other evidence in the record that supported a finding of joint employment. The companies were joint employers under the relevant regulations and considering all economic realities. _____________________________________________________________________ It is not that simple that one just creates different companies to protect different business interests....note that the two companies had a services agreement that presumably allowed the parent to oversee the operations of the subsidiary? Input from an employment attorney is needed to fully evaluate the impact of this case.

Employment

Here is  a reason to undertake employment training.......from the employee's standpoint.

Under Missouri law there is a good chance that a supervisor can be held individually liable!

Looks like another landmark employment lawsuit

Today's Kansas City Star Business section revealed the decision by a local jury granting $1,000.00 in actual damages and $100,000 in actual damages to a women because, in part, pornographic material was placed in an employee's bible......and the employer was specifically cited for not handling the employee's complaint properly.

Now tell me that management training of employment issues is not important.  It would appear this jury sent a very, very strong message to employers........

More and more employment lawsuits

I again have to remark  on the number o employment cases filed in the various counties this week and I am again astounded by the proliferation of such cases, not only in the construction industry but in all industries.  Now in the recent article in Construction Magazine, the authoritative source for merit shop construction companies it appears that ADA related claims are on the rise as well.  Employees who “blacked out” , has a bad back were a couple of the examples of situations confronting a couple of companies.  As a the authors of the article stated (Michal Pepperman and Thomas Hearn) ….”The determination must be based on an expressly individualized assessment of the employees’ (or applicants’) present ability to safely perform the essential functions of the job” in determining whether or not an employee with a potential claim can be terminated.  I applaud the thought and standard raised by these find authors…but will this be recognized by plaintiffs’ attorneys before they file suit?  My experience is the case will be filed under the notion that this is something that the defendant company will have to prove….so an ADA candidate is just an inherent risk in hiring!

Employee issues

Kids: This says it all.....A saleswoman in California who was spanked in front of her co-workers as part of what her employer said was a camaraderie-building exercise will get $1.7 million in damages.

A Fresno jury agreed with with Janet Orlando on Friday that she suffered sexual harassment and sexual battery during the paddlings overseen by the security alarm company she worked for before quitting two years ago. Actual damages were set at $500,000.00 and punitive damages were awarded at ....$1.2 million.

There is no place for such activity in the work place.....and note the unbelievably strong message the jury is sending to employers. Perhaps on appeal the judgment is reduced, but frankly, what employer out there can afford to pay such an amount? And how about the attorneys fees they had to pay...better throw another six figure amount on top of that!

This will fuel the continuing explosion of employment lawsuits. Employers must spending as much for harassment and discrimination training as they do for safety training, continuing education training and the like...or continue to suffer the consequences............by the way when was the last time you were sued for failure to comply with education training? And you spend less on harassment training than you do on education training?

Legal employees suing employers for illegal hirings?

Attorney Catherine Hobart points out in a recent article a case involving employees suing an employer for hiring illegal employees. Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9th Circuit, 2002). The 9th Circuit Court of Appeals upheld the right of employees to undertake such litigation. And more cases are to follow....

Guess employers better take seriously the I-9 issues required by C.I.S.!

Employment lawsuits

Did you notice a federal judge out west has certified (think permitted) the creation of a class of plaintiffs in a racial bias case involving FedEx Express? This adds to the explosion of employment related lawsuits that has been thrusted upon employers...I do not know the number but clearly the majority of cases filed in the KC metro area stem from some type of employment issue with employees.....and the number of class actions where employees are allowed to join together just continue to climb and climb and climb and (you get the picture)

Stay tune to our website as we will be announcing a teleseminar dealing with these issues in the upcoming weeks.......

Covenants Against Competition

A case decided in April of this year stands for the proposition that a former employee can go to work for another company that does not "compete in a material way"....In Victoria's Secret Stores v. The May Department Stores (Mo. App.E.D. 2004), the Court decided as the two companies do not compete in a meaningful or material way with each other, the employee would not violate his employment agreement with The May Department Store by accepting a job with Victoria's secrets (doesn't The May Store sell lingerie?)....well, what if the employee worked for a commercial contractor and then goes to work with a residential contractor...and then the residential contractor starts undertaking commercial work?

Retaliation Actions are on the Rise

Retaliation actions are on the rise in employment discrimination cases...what does this mean to you. Well, even if a a discrimination complaint is merit less, please be careful in how you respond to the employee's actions. Responding improperly is a discriminatory practice.

Yes, Virginia, you should not respond to a complaint in an heated manner. You should not respond in an angry manner when a whistle-blower is making an assertion. Plaintiff's attorneys are watching and will raise issues if within a few months after a complaint is filed the employee is terminated....for some reason, six months seems to be an unwritten standard.

Running a company is just not easy, nor is it for the faint of heart, wallet, or intestinal fortitude.......