T A K E T H I S J O B

Tennessee Human Rights Act

A recent unreported decision by the Tennessee Court of Appeals addressed the proper application of the statute of limitations contained in the Tennessee Human Rights Act (THRA). Holcomb v. Sverdrup Technology Inc., 2001 WL 1386093 (Tenn. Ct. App. Nov. 8, 2001). Specifically, that case addressed (1) whether or not the employee filed his employment discrimination lawsuit within one year of obtaining unequivocal notice of his impending termination of employment, and (2) whether or not the statute of limitations was tolled until the employee discovered that the cause of his termination was, as he believed, age discrimination rather than the reason given to him by his former employer.

The appellant, Charles Holcomb, was hired by the appellee Sverdrup Technology Inc. on Sept. 16, 1983 as a supervisor of its plant operations. On Aug. 29, 1995, he was advised by written notice that his employment would be terminated on Sept. 29, 1995, as a result of a reduction in the workforce. Specifically, the letter indicated that due to workload requirements, it was necessary to terminate Holcomb's employment as of that date.

Holcomb completed the company's personnel clearance process on Sept. 18, 1995, which included turning in company property and his keys. His employment officially ended on Sept. 29, 1995.

Holcomb later discovered that two new younger employees were hired on Oct. 1, 1995. He contended that they were hired to perform his old job. Almost a year later, on Sept. 23, 1996, Holcomb filed suit in Coffee County Circuit Court alleging discrimination under the THRA. The company filed for summary judgment based on a statute of limitations defense. That motion was originally denied. However, on the day of trial, the court reconsidered its prior decision and granted the motion. Holcomb ultimately appealed, raising two questions: (1) whether the statute of limitations barred his claim and (2) whether the statute of limitations was tolled prior to his discovery of what he claimed to be the "real reason" for his discharge.

In analyzing the appeal, the Tennessee Court of Appeals initially noted that actions under the THRA are subject to the provisions of Tenn. Code Ann. §4-21-311, which states that "a civil cause of action under this section shall be filed in Chancery Court or Circuit Court within one year after the alleged discriminatory practice ceases."

The Court of Appeals first addressed the issue of when the THRA's statute of limitations ordinarily begins to run. The court noted that the Tennessee Supreme Court had already addressed this issue in the case of Weber v. Moses, 938 S. W. 2d 387 (Tenn. 1996), where it had held that "a discriminatory practice ceases and is complete when the plaintiff is given unequivocal notice of the employer's termination decision, even if employment does not cease until a designated date in the future." The Court of Appeals also noted that the Weber decision had recently been affirmed by the Tennessee Supreme Court in Fahrner v. SW Mfg. Inc., 48 S.W. 3d 141 (Tenn. 2001).

In the case at hand, the Court of Appeals stated that Holcomb was given unequivocal notice of his impending termination on Aug. 29, 1995. Even though Holcomb thereafter asked his employer to reconsider the decision, the court found that there was nothing in the record to constitute an affirmative act on behalf of the employer or anyone capable of reversing or rescinding that termination, to cause Holcomb to sleep on his rights. Therefore, the statute of limitations began to run against Holcomb as of Aug. 29, 1995.

The Court of Appeals then addressed Holcomb's argument that the usual beginning of the running of the statute of limitations should be tolled until he discovered the "real reason" for his termination, meaning alleged age discrimination. Holcomb argued that the employer's stated reason for his discharge, a reduction in force, was not the real reason for his discharge. He stated that the real reason was age discrimination, which he could not have learned about until new younger employees began to work for the company on or around Oct. 1, 1995.

The Court of Appeals rejected this argument. The court, in agreement with the Tennessee Supreme Court, held that the relevant date for purposes of the statute of limitations is when the employee discovers that an injury has been sustained for purposes of the THRA. The court said that this occurs when the employer provides unequivocal notice of the adverse employment action, which in the case of Holcomb was his termination. The court noted that it is true that the employee in such a situation may not know the true reason for the adverse employment action. However, the court stated that there is no requirement that the plaintiff actually know the specific type of legal claim he or she has, or that the injury constituted a breach of the appropriate legal standard. Instead, the employee, through his or her lawyer, must investigate the circumstances surrounding the employer's decision, and must thereafter file his or her lawsuit within the time given by the legislature, which in the case of the THRA is a one-year period. Thus, the Tennessee Court of Appeals rejected Holcomb's "tolling" argument, and affirmed the dismissal of his claim based on the running of the statute of limitations.

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Timothy S. Bland and Licia M. Williams are attorneys in the Memphis office of Ford & Harrison LLP, a national law firm exclusively representing management in labor and employment matters. Bland is the editor of In the Workplace, the newsletter of the TBA's Labor and Employment Section.