Major Changes In Store For Tennessee Wrongful Discharge Law

Last month, Tennessee Governor Bill Haslam signed into law legislation (Public Chapter 995) that will significantly amend the Tennessee Human Rights Act ("THRA"), the Tennessee Public Protection Act ("TPPA"), and the Tennessee Disability Act ("TDA") in a manner favorable to employers. This article provides an overview of the major changes in store for wrongful termination claims as a result of this new law.

Damages caps set

Previously, damages under the TPPA, THRA, and TDA (all of which create causes of action for wrongful discharge) weren't capped. But under the new legislation, a cap is imposed under all three statutes on compensatory damages that an aggrieved employee may recover for future pecuniary (monetary) losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses. These caps, which are tiered based on the business' number of employees, range from $25,000 (for employers with 8-15 employees) to $300,000 (for employers with more than 500 employees). The caps don't apply to backpay, interest on backpay, front pay or equitable relief.

Individual liability eliminated

Previously, individual supervisors could be held personally liable for violating the THRA (which is Tennessee's version of Title VII of the Civil Rights Act of 1964). However, under the new law, individual employees and other agents of businesses will be immune from liability under the THRA for unlawful discriminatory acts of an employer. Therefore, a plaintiff who feels that she has been the victim of unlawful discrimination may only sue her employer and not her supervisor or other alleged perpetrator. These changes bring Tennessee state law in line with federal law on this issue, as supervisors may not be held individually liable under federal anti-discrimination laws.

Changes to whistleblower law

The bill makes two other major changes to the TPPA, also known as the "Whistleblower Statute." First and foremost, the bill eliminates the separate common law cause of action for retaliatory discharge, a cause of action that has been in existence for approximately thirty (30) years. Although these two causes of action overlap in many respects, this development is significant because it is generally easier for a plaintiff to prevail in a common law retaliatory discharge action. In particular, the TPPA requires an employee to prove that his or her protected activity served as the "sole reason" for termination; whereas...