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Governor Signs Tennessee Employment Litigation Reform Bill

  • May 30, 2014

Tennessee Governor Bill Haslam has signed into law a bill removing individual liability for employment discrimination under the Tennessee Human Rights Act from supervisors or employer agents, and capping discriminatees’ “non-pecuniary” damages, among other things. The new law will apply to all causes of action accruing on or after July 1, 2014. 

Following are the highlights:

Section 1 removes liability from supervisors or agents individually for claims made against their employer under the Tennessee Human Rights Act (“THRA”). The change brings that law in line with federal non-discrimination laws. 

Section 2 adds caps on “non-pecuniary damages” (e.g., pain, suffering, embarrassment, humiliation, mental anguish, and loss of enjoyment of life) resulting from prohibited discrimination. The caps do not apply to backpay, interest on backpay, or front pay. The limitations are based on the federal caps in the 1991 amendments to Title VII of the Civil Rights Act (42 U.S.C. § 1981a(b)(3)). For employers with more than 8 but fewer than 15 employees, the cap is $25,000; for those with 15-100 employees, $50,000; for those with 101-200, $100,000; for those with 201-500, $200,000; and for those with more than 500 employees, $300,000.

Section 3 incorporates the eight-employee threshold for coverage under the THRA into the Tennessee Disability Act, T.C.A. §8-50-103. 

Section 4 requires that any claim for retaliation against an employer be brought under the Tennessee Public Protection Act, T.C.A. §50-1-304(b) (“TPPA”), and eliminates the cause of action for retaliatory discharge as an exception to the employment-at-will rule under state common law. The bill retains the “sole cause” requirement to prove unlawful retaliation under the TPPA. 

Finally, an employee may not maintain concurrently separate causes of action in both state court under the Tennessee Human Rights Act, Tennessee Disability Act, or Tennessee Public Protection Act, and in federal court, based on the same operative facts. Upon motion of the employer, the state court is required to dismiss the action brought under state law.

Jackson Lewis attorneys are available to answer questions about this and other developments that affect employers.

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