On Friday, June 30, 2017, Missouri Governor Eric Greitens signed Senate Bill 43 into law. The Bill implements significant changes to the Missouri Human Rights Act (“MHRA”) and will likely have a significant impact on the litigation of MHRA claims. When he signed the legislation, Governor Greitens touted Senate Bill 43 for bringing Missouri law in closer alignment with the standards under federal law and 38 other states’ laws.
The changes to the MHRA are set to take effect on August 28, 2017. Once effective, Senate Bill 43 will (1) implement “the motivating factor” decisional standard; (2) implement the federal burden shifting framework at the summary judgment stage of litigation; (3) prohibit MHRA claims against individual employees; (4) implement damages caps based on employer size; and (5) create the Missouri Whistleblower Protection Act.
Missouri Adopts “The Motivating Factor” Standard
The new legislation will change the causation standard for employment discrimination claims in Missouri. Under the updated MHRA, individuals bringing claims of employment discrimination must prove that a protected class, such as race, gender, or age, was “the motivating factor” for an employer’s alleged adverse employment action. The motivating factor is defined as “the employee’s protected classification actually played a role in the adverse action or decision and had a determinative influence on the adverse action.” The new “motivating factor” standard replaces the current “contributing factor” standard.
Missouri Adopts Federal Burden Shifting Framework for Summary Judgment Motions
When analyzing an employer’s motion for summary judgment under Missouri Rule 74.04, the amendments instruct courts to follow the burden-shifting framework used by federal courts as set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) where there is no direct evidence of discrimination. A motion for summary judgment requests that a court find no material issue of fact exists in a case and gives the court an opportunity to decide the case prior to trial. Under the existing version of the MHRA, summary judgment is rarely granted. Under the amendments, employers will have a better opportunity to obtain summary judgment.
Employment discrimination claims with no direct evidence of discrimination often present unique circumstances because the plaintiff may not know the employer’s non-discriminatory rationale that formed the basis for the employer’s adverse employment action. To address that issue in federal employment discrimination cases, the United States Supreme Court shifted the burden from the plaintiff to the employer to prove that the employer had a legitimate, non-discriminatory reason for the employer’s conduct in McDonnell Douglas. The McDonnell Douglas framework is as follows: (1) the plaintiff must plead and prove facts adequate to support a legal claim for discrimination; (2) then, the burden of producing evidence shifts to the employer to articulate some legitimate, non-discriminatory reason for the employer’s conduct; and (3) the burden of producing evidence then shifts back to the employee to show that the employer’s response and stated reason for its conduct or action is merely a pretext for behavior actually motivated by discrimination.
Missouri Abandons Liability for Individual Supervisors
Prior to the enactment of Senate Bill 43, plaintiffs could sue supervisory employees in their individual capacity (rather than as an employee of the company) for alleged unlawful employment discrimination under the MHRA. Employees regularly sued supervisors in their individual capacity for a variety of reasons, including for the tactical purpose of preventing the removal of MHRA cases to federal court.
Under the newly revised MHRA, “individuals employed by an employer” are specifically excluded from the MHRA’s definition of “employer.” As a result, plaintiffs will no longer be able to sue other employees in their individual capacities under the MHRA.
Missouri Adopts Caps on Damages Based on Employer Size
The legislation also sets caps on the amount of damages that may be obtained against an employer for discrimination claims under the MHRA. Damages awarded for employment claims under the MHRA may not exceed back pay and interest on that back pay, plus an additional amount of damages dependent upon the size of the company, as follows:
- $100,000 for employers with between 100 and 200 employees;
- $200,000 for employers with between 200 and 500 employees; or
- $500,000 for employers with more than 500 employees.
A court may grant other relief, such as permanent or temporary injunctions, as the Court deems appropriate. Courts may also still award court costs and reasonable attorneys’ fees to the prevailing party. A prevailing employer may be awarded reasonable attorneys’ fees only upon a showing that the case was entirely without foundation.
Missouri Creates Whistleblower Protection Act
The signing of Senate Bill 43 also creates the “Whistleblower Protection Act.” Under the Act, it is an unlawful employment practice for an employer to discharge an individual who is a “protected person” because that person engaged in any of the protected activities referenced in the definition of “protected person.” A “protected person” is defined as:
- An employee of an employer who reports to an employer serious misconduct of the employer that violates a clear mandate of public policy as articulated in a constitutional provision, statute, or regulation promulgated under statute;
- An employee of an employer who refuses to carry out a directive issued by an employer that, if completed, would be a violation of the law; or
- An employee of an employer who engages in conduct otherwise protected by statute or regulation where the statute or regulation does not provide for a private right of action.
The Whistleblower Protection Act places significant limits on remedies available to whistleblowers. Under the current law, an individual could be awarded compensatory damages, punitive damages, and future pay for a wrongful discharge claim. The new framework allows damages to be awarded for back pay and medical bills, liquidated damages (i.e., double damages), and attorneys’ fees. Liquidated damages are only available if the employee proves by clear and convincing evidence that the employer’s conduct was outrageous because of the employer’s evil motive or reckless indifference to the rights of others. The liquidated damages will be treated as punitive damages, and backpay and reimbursement will be treated as compensatory damages in a bifurcated trial, if requested by a party. An employer may recover attorneys’ fees if the employer establishes that the case was without foundation.
While the changes under Senate Bill 43 are a great move in the right direction on necessary changes to the framework of MHRA and whistleblower litigation in Missouri, they are only a start. We will be closely monitoring how courts apply the amendments to the MHRA in the months following the August 28 implementation of the changes. At this time, it is unknown whether the new law will apply to any lawsuits filed on or after August 28 (regardless of when the claim actually arose) or if the old law will continue to apply even after August 28 if the facts giving rise to the claim arose prior to August 28. We also expect to see a large volume of employment discrimination charges and lawsuits filed in July and August in advance of the August 28 effective date.