On June 30, 2017, Missouri Governor Eric Greitens signed into law Senate Bill 43, which corrects the Missouri Human Rights Act (MHRA) by bringing it into closer alignment with federal and other states' anti-discrimination statutes. The move marks an end to a year's-long legislative battle and a hopeful beginning of a closer-to-level playing field for employment litigation in Missouri state court. As Governor Greitens stated in signing Senate Bill 43 into law, "we need to bring Missouri's standards in line with 38 other states and the federal government."
Business leaders, like the Missouri Chamber of Commerce, supported the amendment as a means to encourage a more business-friendly climate in Missouri, consistent with Governor Greitens' recent message that "Missouri is open for business."
As previously discussed,1 the amendment, which takes effect on August 28, 2017, makes several key changes to the MHRA landscape, including:
Causation Standard: The "contributing factor" standard, adopted in 2005 by the Committee on Jury Instructions and treasured by plaintiffs' attorneys as a low bar for causation, is gone. In its place, the MHRA amendment gives us a "motivating factor" standard. The amendment defines "motivating factor" as "the employee's protected classification actually played a role in the adverse action or decision and had a determinative influence on the adverse decision or action." The "motivating factor" standard is intended to bring the standard closer to that used in federal anti-discrimination laws. The amendment also endorses the burden-shifting framework used in federal court.
Individual Liability: Plaintiffs can no longer sue individual supervisors for violation of the MHRA, which they did commonly to avoid removal by destroying complete diversity of citizenship when suing a foreign corporation. With the amendment's deletion of individual liability, foreign corporations will often be able to remove cases to federal court in Missouri when a case is filed in an undesirable state venue.
Punitive Damages: The MHRA finally has a real cap on punitive damages. Punitive damages were previously capped at the greater of $500,000 or five times the actual damages recovered (including attorneys' fees), routinely resulting in large and virtually unrestrained judgments. The amendment changes that to create a system similar to that under federal law. Specifically, exclusive of attorneys' fees, damages awarded under the MHRA as amended cannot exceed (1) actual back pay and interest on it and (2) a fixed amount based on the defendant's number of employees as set forth below:
- More than 5 employees, but less than 100 employees: $50,000
- More than 100 employees, but less than 200 employees: $100,000
- More than 200 employees, but less than 500 employees: $200,000
- More than 500 employees: $500,000
Charges of Discrimination: In Farrow v. Saint Francis Medical Center, the Missouri Supreme Court found an employer must challenge a charge of discrimination's timeliness with the Missouri Commission on Human Rights (MCHR) and then via an action for judicial review under RSMo Chapter 536. If an employer did not pursue the timeliness issue through those avenues, then it lost its ability to challenge a late-filed charge. That process is wildly different from the process for challenging the timeliness of EEOC charges.
With the amendment, the Farrow case is no more. The amendment abrogates Farrow and makes timeliness a jurisdictional prerequisite to bringing a lawsuit. Missouri courts lack jurisdiction to hear a lawsuit if the employee does not file a charge within 180 days of the alleged discriminatory act. Similarly, the MCHR lacks jurisdiction to investigate the charge or take any action other than dismissal. An employer may also raise the timeliness defense at any time. Additionally, the MCHR may issue a notice of right to sue only pursuant to the charging party's request for one.
Abrogation of Certain Decisions: The amendment also abrogates other anti-employer judicial decisions to now, among other things, require a business judgment instruction and endorse use of the McDonnell Douglas burden-shifting framework.
Wrongful Discharge: Missouri now has a Whistleblower Protection Act (WPA), which takes the place of common-law wrongful discharge causes of action. The WPA protects an employee who: (1) reports an employer's unlawful act to the proper authorities; (2) reports to the employer serious misconduct in violation of a clear mandate of public policy found in the constitution, statute, or regulation; or (3) refuses to carry out an employer's unlawful directive. It does not protect managers where the manager's job is to report or provide professional opinion on the conduct in question. It also does not protect employees who report alleged unlawful conduct to the person the employee claims acted unlawfully. Under the WPA, the "motivating factor" standard applies. It will also provide damages in the form of back pay and medical bills, liquidated damages (i.e., double damages), and attorneys' fees. The Act is also intended to prevent courts from creating further exceptions to the at-will employment doctrine.
As stated above, those changes to the MHRA and the new WPA become effective August 28, 2017. The changes are a definite win for the business community. However, we expect to see a flurry of charges and lawsuits leading up to August 28 and subsequent fights on applicability of the amendments to matters accruing before August 28.