Tennessee Court Makes It Easier to Sue Employers Over Illegal Firings

September 29, 2010

In a decision that some legal observers found surprising, the Tennessee Supreme Court has reversed precedent and made it easier for workers to sue their employers when they believe they were fired illegally.

The court ruled 3-2 last week that employers must prove that workers’ claims of discrimination or retaliation are false or else face a trial, according to The Tennessean.

Decades of precedent had put the burden of proof on workers, who had to prove they were not fired for legitimate reasons before they could take a case to trial, often a difficult task.

“Rarely do you have somebody who says, ‘I’m firing you because you’re black’ or ‘because you’re over 40,”‘ said Wade Cowan, the attorney for the plaintiff in the case, Gossett v. Tractor Supply Co. Inc.

Cowan said the absence of such evidence has kept too many legitimate lawsuits from reaching trial.

According to the American Bar Foundation, in federal court more than 40 percent of employees in these type of cases are never able to go to trial because their cases are dismissed. Before this week’s decision, Tennessee courts followed the federal model for deciding whether employment cases could go to trial.

Business groups and attorneys said the federal model is good. They predicted the state Supreme Court’s decision will invite frivolous lawsuits and increase the cost of doing business in Tennessee.

“The initial reaction from some folks in our community is this is egregious,” said Jim Brown, Tennessee director for the National Federation of Independent Business. “Big businesses will likely settle, but many small businesses will likely go out of business. The consequences of this will be significant.”

Larry Eastwood, a lawyer at Baker, Donelson, Bearman, Caldwell & Berkowitz in Nashville, said the court’s decision will probably double the cost of employment lawsuits for businesses.

“Tennessee employers are going to have to think long and hard about doing anything to an employee who has made a complaint,” Eastwood said. “It’s quite a weapon that an employee can use to deter an employer from making a decision they don’t want.”

Eastwood went as far as to say that the Gossett decision will deter businesses from relocating to Tennessee. Others said such concerns are overblown.

“It doesn’t mean they (workers) win,” said Tennessee Employment Lawyers Association president Doug Janney. “It means they get to present their case to a jury and judge and not have their case dismissed. It’s the way the law ought to be.”

Bryan Pieper, an attorney at Drescher & Sharp in Nashville said, “Employers hire based on needs. If they need employees to get work done or make widgets, they’re not going to refrain from hiring people just because the law changed a little bit.”

In the case in question, Gary Gossett, a former inventory control manager at Brentwood-based Tractor Supply Co., claims he was fired for refusing to manipulate the company’s inventory mix to improve its quarterly earnings statement, which he believed would be illegal.

Tractor Supply Co. says Gossett was fired because it was trying to reduce its work force.

The trial court dismissed Gossett’s case but an appeals court overturned that decision and the Supreme Court agreed. The will now go to trial in Davidson County Chancery Court.

“Tractor Supply has consistently denied any wrongdoing in this case and it looks forward to presenting the facts of this case at trial,” a statement from the company said.

In addition to increasing the number of cases that go to trial, legal observers said this week’s decision will increase settlement values and result in most Tennessee employment lawsuits being filed in state rather than federal courts.

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