Effective July 1, 2014, the following changes in Tennessee employment laws will take effect:

  • No individual liability of supervisors or managers in discrimination claims; only the “employer” can be sued for discrimination;
  • Caps on non-monetary damages (pain, suffering, humiliation, embarrassment) in discrimination claims; caps do not limit back-pay or front-pay;
  • Preemption of common law “whistleblower” claims; such retaliation claims can be brought only under the Tennessee Public Protection Act, with its “sole cause” standard;
  • Clarifications that the Tennessee Disability Act, like the Tennessee Human Rights Act, applies to employer with eight or more employees and that a person cannot be pursuing two cases at the same time (one in state court and one in federal court) based on the same set of facts.

In the final days of the 2014 Legislative session, the Tennessee House of Representatives gave final approval to a bill sponsored by the Tennessee Chamber of Commerce & Industry and the National Federation of Independent Business, which makes significant changes to a number of state employment laws. HB1954/SB2126 had earlier passed the Senate with a 30-2 vote. The final vote in the House was 61-23. Bill Ozier of Bass, Berry & Sims PLC, along with attorneys from several other firms, had an integral role in drafting and presenting testimony before various House and Senate Committees in support of this legislation. The Bill is on Governor Haslam’s desk and is expected to be signed any day. It will take effect on July 1, 2014.

Section 1 of the Bill accomplished the goal of removing liability for individual supervisors or agents for claims against their employer under the Tennessee Human Rights Act to bring that law in line with the current state of the law under virtually all of the federal non-discrimination laws. Section 2 of the Bill adds caps on damages for “non-pecuniary damages” such as pain, suffering, embarrassment, humiliation, mental anguish, loss of enjoyment of life, etc. The caps do not apply to back pay for front pay. The limitations are based on the federal caps adopted in 1991 as 42 U.S.C. § 1981a(b)(3). For employers with more than eight 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 expressly 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), and eliminates the cause of action for retaliatory discharge as an exception to the employment at will rule under common law. The Bill retains the “sole cause” requirement to prove unlawful retaliation under the TPPA. Finally, the new statute provides that 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, while at the same time prosecuting an action 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 where the employee is currently prosecuting an action based on the same facts in federal court.

These improvements will continue to enhance Tennessee’s position as an “employer-friendly” state and remove several issues that have been “thorns in the side” of employers and their legal representatives defending claims of discrimination and retaliation for many years.