Business-friendly Tennessee, known for its low business taxes and minimal red tape, is on track to be even friendlier if Governor Bill Haslam signs a bill removing liability for employment discrimination from individual supervisors or agents under the Tennessee Human Rights Act and limiting discriminatees’ “non-pecuniary” damages, among other things. Once signed, the new law will become effective July 1, 2014. 

Sponsored by Representatives Vance Dennis and Glen Casada and Senator Jack Johnson, HB1954/SB2126 was approved 61-23 by the Tennessee House of Representatives and 30-2 by the Senate. The Tennessee Chamber of Commerce & Industry, the National Federation of Independent Business, and Jackson Lewis and other law firms that represent management supported the bill.

Following are highlights of the bill:

Section 1 removes liability from individual supervisors or agents for claims against their employer under the Tennessee Human Rights Act (“THRA”), which brings that law in line with virtually all federal non-discrimination laws. 

Section 2 adds caps on damages for “non-pecuniary damages” (e.g., pain, suffering, embarrassment, humiliation, mental anguish, and loss of enjoyment of life). The caps do not apply to backpay, interest on backpay, or front pay. The limitations are based on the federal caps in the 1991 amendments to Title VII of the Civil Rights Act (42 U.S.C. § 1981a(b)(3)). For employers with more than 8 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 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) (“TPPA”), 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, 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 and 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.