Governor Signs Bills Restoring Summary Judgment to Employment Discrimination Claims in Tennessee

The Governor has now signed both bills passed by the General Assembly designed to restore summary judgment standards in Tennessee.

The General Assembly's website indicates that on June 10, 2011, the Governor signed HB 1641, which, as I explained in a prior post, codifies the McDonnell Douglas / Burdine analysis at all stages of the proceedings, including, on a motion for summary judgment.  While the Act takes effect as of June 10, 2011, it also provides that it applies “to all causes of action accruing on or after such effective date.” Thus, employment decisions made after this date, will have summary judgment decisions adjudicated using the McDonnell Douglas / Burdine analysis.

My prior post mentioned another bill. This one is not directed at employment discrimination claims but applies to all civil claims. It legislatively overrules Tennessee Supreme Court decisions that made it much more difficult (if not impossible) to obtain summary judgment.  The governor signed this bill on June 16, 2011.  The summary judgment bill, by the way, would not take effect until July 1, 2011, and states that it only applies to “actions filed on or after that date."

These bills will certainly be good news to employers who have been sued for discrimination or retaliation in state court where the evidence of discrimination or retaliation is weak or non-existent.   Prudent employers shouldn't take the passage of these bills as a "get out of jail free" card.  Courts will still have the responsibility to deny summary judgment when the material facts are disputed.  As I have said several times on this blog, the dumbest thing employers can do is run their mouths.  Loose lips are a sure fire way to be forced to defend an employment decision before a jury.

General Assembly Passes Bill Legislatively Overruling Deeply Flawed Gossett Decision

A prior post addressed a bill pending in the Tennessee General Assembly which would have the effect of over-ruling the Tennessee Supreme Court's decision in Gossett v. Tractor Supply.  (My post on Gossett can be found here).

Last week, both houses of the General Assembly voted to send the bill (as amended) to the governor.  If Governor Haslam approves the bill, it becomes law immediately, but would only apply to causes of action that accrue after the Governor signs the bill (more on that in a minute).

The version of the bill that passes can be found here: http://www.capitol.tn.gov/Bills/107/Amend/SA0598.pdf.  This is an amendment the Senate adopted to clarify the effective date. The Senate passed the bill on May 20, 2011. The House approved the amendment a day later.

The purpose of this bill was to require application of the McDonnell Douglas Burdine (MDB) analysis in all THRA claims and retaliatory discharge claims (common law and statutory) including on summary judgment motions. (“The foregoing allocations of burdens of proof shall apply at all stages of the proceedings, including motions for summary judgment.”) Remember that Gossett held that McDonnell Douglas Burdine was inconsistent with the Court's summary judgment precedent.

The operative language in the bill is (similar language is used for wrongful discharge claims) is:

In any civil cause of action alleging a violation of this chapter or of Tennessee Code Annotated, Section 8-50-103[which prohibits disability retaliation], the plaintiff shall have the burden of establishing a prima facie case of intentional discrimination or retaliation. If the plaintiff satisfies this burden, the burden shall then be on the defendant to produce evidence that one or more legitimate, nondiscriminatory reasons existed for the challenged employment action. The burden on the defendant is one of production and not persuasion. If the defendant produces such evidence, the presumption of discrimination or retaliation 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 challenged employment action and that the stated reason was a pretext for illegal discrimination or 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 he or she has been the victim of intentional discrimination or retaliation.

To anyone familiar with employment discrimination litigation, the bill requires courts apply the McDonnell Douglas Burdine analysis to all discrimination and retaliation cases.  An interesting point about the language of the bill is that in some situations, such as where the employee claims to have so-called "direct evidence" of discrimination (e.g., an admission of discrimination by the decision-maker), this bill seems to require application of McDonnell Douglas/Burdine even where a federal court might not.  This isn't a big deal as an admission of this nature is probably going to be sufficient to require a jury trial even under the federal summary judgment rule.  The argument could also be made that this bill negates any hint of a dual motive analysis under the THRA (though that was probably not the intent). Again, this is not a huge issue, as I explained in my prior blog posts about the U.S. Supreme Court's decision in Gross.

As noted, the effective date is interesting:

This act shall take effect upon becoming a law, the public welfare requiring it and shall apply to all causes of action accruing on or after such effective date.

The word "accruing" means, in this context, "happens" but that can be somewhat uncertain in the employment discrimination context.  A termination of employment claim accrues when the employee is informed of the decision.  Easy enough.  But a hostile work environment claim accrues over time, not all at one.   These will not be insurmountable problems, just headaches for judges to work out over the next few years.

Note that the bill has not been enacted yet. It still needs Governor Haslam’s approval.

On another note, the General Assembly also passed a separate bill which would require the Tennessee courts to the federal summary judgment standards.  A full explanation of this issue would be beyond the scope of this blog.   

It is enough to say that both bills, if signed by the Governor, will restore a Tennessee employer's repeatedly dashed hope of obtaining summary judgment in state court when the employee has no competent evidence to warrant a trial.

Pending Tennessee Legislation would Overturn Summary Judgment Rulings of the Supreme Court

A bill pending in the General Assembly would effectively reverse several decisions of the Tennessee Supreme Court that have all but made it impossible for an employer to get an employment lawsuit dismissed without a jury trial.

The bill would add a new provision to the Tennessee code which would say:

In all motions for summary judgment in any civil action in Tennessee, the moving party shall prevail on its motion for summary judgment if it:
(1) Submits affirmative evidence that negates an essential element of the nonmoving party's claim; or
(2) Demonstrates to the court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim.

One sponsor of the bill explained (in the House Judiciary Subcommittee - see video of the session from April 27, 2011, set out below) the purpose of the bill was to addresses the Supreme Court's 2008 decision in Hannan v Alltel Pub where the Tennessee Supreme Court changed how they applied rule 56 and made a wrong or incorrect decision which makes it almost impossible for a court to grant summary judgment by requiring a party to essentially prove a negative.

A prior post of mine criticized the Supreme Court's "deeply flawed" application of the Hannan decision after it issued the decision in Gossett v. Tractor Supply, which held that the method of analyzing discrimination claims adopted in the U.S. Supreme Court's decisions in McDonnell Douglas / Burdine (an explanation of what these decisions held was included in my prior post) did not apply to summary judgment motions under state law because they were inconsistent with the Hannan decision.

Not surprisingly, the Tennessee Employment Lawyers Association (a group of lawyers that represent employees) opposes the bill, saying it would let employment lawsuits be dismissed without given employees the opportunity to respond.  Their arguments (to the House Judiciary Subcommittee) were poorly founded and were sharply challenged by the bill's sponsor.  The fact that TELA spoke against this bill should tell Tennessee Employers all they need about whether to get behind this bill. Here is a video of the most recent subcommittee discussion about the proposed legislation:

Interestingly, a separate bill (House Bill 1641, by the same sponsor) would directly overturn the Supreme Court's decision in Gossett by adding a provision to the code which specifies that McDonnell Douglas / Burdine principles would apply to claims under the Tennessee Human Rights Act and claims for retaliatory discharge.  I am quite sure that TELA opposes this bill, as well.