On Friday, June 1, 2017, Missouri’s Governor Eric Greitens signed Senate Bill 43, legislation that has the potential to change dramatically the landscape in the state for employers, employees, lawyers and insurers. The following is a summary of the most significant aspects of the new legislation, which goes into effect on August 28, 2017:
Individual liability: Missouri departed from federal law by subjecting individual managers and supervisors to personal liability for alleged employment discrimination. Missouri’s new law provides that such individuals are not “employers” and, thus, cannot be sued or held liable. See § 213.010(8) RSMo.
Damages: In another departure from federal law, Missouri state law, in the past, allowed unlimited damages against employers and individual supervisors/managers. Under the new law, a successful employee may recover actual back pay plus interest on that amount. However, as to all other items of damages, including future pecuniary loss, emotional pain and suffering, mental anguish, loss of enjoyment of life, other non-pecuniary losses and punitive damages, employees’ recoveries are capped in the following amounts:
For employers with more than 5 and less than 101 employees, a total of $50,000;
For employers with more than 100 and less than 201 employees, a total of $100,000;
For employers with more than 200 and less than 501 employees, a total of $200,000; and
For employers with more than 500 employees, $500,000.
See § 213.111.4 RSMo.
Standard, Summary Judgment, Causation and the Business Judgment Defense: Further departing from federal law, Missouri’s courts have allowed plaintiffs to proceed to a jury trial as long as there was any evidence that the plaintiff’s status in a protected class was a “contributing factor” to the employer’s challenged decision. Often, the mere fact that the plaintiff was in the protected class was sufficient to defeat a summary judgment motion and allow a case to proceed to trial because, as plaintiffs’ lawyers argued, the protected status could be a fraction of a percentage of the reason for the challenged action and it would still be “a contributing factor.” Finally, Missouri Appellate Courts had limited the use the business judgment doctrine.
Under the new law, an employee’s membership in the protected class must be a “motivating factor” in the adverse employment action or decision. § 213.010(2) RSMo. In order for protected status to be a “motivating factor,” it must “actually play a role in the adverse action or decision” and have a “determinative influence on” that action or decision. § 213.010(19) RSMo. The new legislation abrogates all current approved jury instructions, including the rather plaintiff-friendly “contributions factor” instruction. While new jury instructions must be proposed by the appropriate committee of the Supreme Court, it is likely that the new instructions will be less favorable to plaintiffs.
Furthermore, under the new law, plaintiffs may no longer avoid summary judgment by relying on the contributing factor standard, at least not in the typical case where the employee has no direct evidence of discrimination (as where the employer makes an incriminating admission that a decision was based on status in a protected class). Where an employee’s case is based on circumstantial evidence, if the employer presents a legitimate, status-neutral reason for the adverse action, the employee now must present additional evidence that the employer’s proffered reason is pretextual. § 213.101.3 RSMo.
Another consequence of the change from the “contributing factor” standard relates to the causation instruction to be given. Under the old rule, the plaintiff was required to show only that the employer’s actions “caused or contributed to cause” the plaintiff’s damage. Under the new legislation, that standard is abrogated and the employee must show that damages were the “direct result” of the employer’s conduct. § 213.101.5 RSMo.
Finally, the new legislation abrogates appellate case law that denied employers the use of the business judgment doctrine. Under the doctrine, jurors were instructed that they could not return a verdict in favor of the employee merely because they disagreed with the employer’s decision or found that decision harsh or unreasonable. That instruction is now permitted in appropriate circumstances. § 213.101.2 RSMo.
Other changes: The new legislation affects other aspects of employment discrimination law in Missouri, including somewhat extensive changes to the “public policy” or “whistleblower” exceptions to the at-will employment doctrine.
The future: The full and final impact of these legislative changes remains to be seen. As noted, new jury instructions must be drafted, the text of which will be extremely important to both employers and employees alike. Moreover, one can expect judicial challenges to the new legislation, particularly the limitations on damages. Suffice it to say that, for now, the new legislation has the potential to create a new landscape for employers in Missouri.
Dave Luce is a member of the firm with 30 years of experience practicing law. Along with members Kelley Farrell and Traci Pupillo, Dave has extensive experience defending a wide range of employment disputes, including claims for wrongful termination, discrimination, and sexual harassment. On behalf of their clients, Dave, Kelley and Traci have successfully defended a large number of employment discrimination claims in both federal and state court.
Further reading: click here to read the Missouri Legislature’s Chapter 213.