In this Legal Rebels Profile of the ABA Journal by Victor Li Wevorce CEO Michelle Crosby is shaking up the adversarial divorce process.  Check out this article for more information.

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Josie Beets, Public Policy Coordinator
Tennessee Bar Association

In re Baby, et al. (Tennessee Supreme Court, September 18, 2014)

*By:  Helen Rogers

An Italian man and woman were unable to have children together, and entered into a contract with a Tennessee woman who consented to act as their surrogate.  The surrogate’s husband was also a party to the contract.  The parties contracted for a “traditional” surrogacy, which involves artificial insemination of the surrogate, who after giving birth, is meant to relinquish the child to the biological father, and the intended mother.  Prior to the birth of the child, all of the parties filed a joint petition in Juvenile Court in Davidson County to declare the paternity of the child, grant custody to the intended parents, and terminate the parental rights of the surrogate.  The Magistrate granted the petition, and less than a month later, the surrogate gave birth.  Following the advice of medical personnel, the parties agreed that the surrogate should breast feed the child for a short period of time in the interest of providing the best possible nutrition. 

When the child was almost a week old, the surrogate filed a series of motions asking the Magistrate to vacate the prior order, set aside the surrogacy contract, and award her custody.  The Magistrate denied the motions, and Juvenile Court Judge Betty Green upheld the ruling, and the Court of Appeals affirmed.  The Supreme Court granted the Surrogate’s application for permission to appeal, to consider issues of public policy, subject matter jurisdiction, paternity, custody, and the termination of parental rights. 

The Supreme Court held that public policy of this State does not prohibit the enforcement of traditional surrogacy contracts, but does impose certain restrictions.  The public policy requires compliance with the statutory procedures to termination of parental rights, and does not allow parties to terminate the parental rights of a traditional surrogate through judicial ratification of a surrogacy contract prior to the birth of the child.  Accordingly, the contractual provisions in this case, circumventing the surrogacy procedure for the termination of parental rights are unenforceable.  The Supreme Court further held that the Juvenile Court properly exercised jurisdiction over the issues of paternity and custody, but vacated the portion of the Juvenile Court’s order terminating the parental rights of the surrogate, but otherwise affirm the judgments of the Juvenile Court and the Court of Appeals.  Because a surrogate retains parental rights unless and until such rights are terminated in a future proceeding, the case was remanded to the Juvenile Court to address the issues of visitation and child support. 

This opinion is a thorough analysis of Tennessee’s Constitution, the statutory scheme regarding surrogacy, finding that

Under this framework, the parties to a traditional surrogacy contract may properly carry out the contractual terms by complying with any of the available statutory methods for terminating a biological mother’s parental rights.  If the termination proceedings are of a voluntary nature, then termination may occur without a showing that a surrogate is unfit, or that substantial harm to the child would occur absent termination.  If a surrogate contests the termination of her parental rights, however, the termination proceedings taken on an involuntary nature, then the statutory procedures for safeguarding a parent’s constitutional rights must be satisfied before contractual terms relating to the termination can be enforced. 

It is interesting to note that the surrogacy contract did contain a severability clause.  The Court of Appeals found that the statutory procedures for terminating the parental rights of a traditional surrogate are limited to involuntary termination, parental consent to adopt, and surrender.  Since neither of the parties or the Juvenile Court complied with any of those procedures in this case, the portion of the Juvenile Court Order terminating parental rights of the surrogate must be set aside, but the Supreme Court ruling did not preclude the termination of parental rights of the surrogate in a future proceeding.  Absent the basis for involuntary termination, however, termination may only occur if the surrogate executes a surrender or consents to a petition for adoption.  Then until and unless the termination of parental rights of the surrogate occurs, she will retain both the rights and responsibilities associated with legal parenthood.  The Supreme Court strong recommends that the legislature step in and provide some guidance, and outlines three different approaches that various states have taken on this subject.  The TBA Family Law Section and the TBA Family Law Section Code Subcommittee are both studying this issue.

Justice Koch filed a concurring opinion, citing that this was a case of first impression regarding the enforceability of an international traditional surrogacy contract, and will have far-reaching ramifications, both in Tennessee and beyond.  While he concurs with the general terms of the Court’s disposition of the case, he does not concur with the Court’s conclusions that “traditional surrogacy contracts do not violate public policy as a general rule.”  Justice Koch did not believe that this case was an appropriate vehicle for the Supreme Court to broadly declare that traditional surrogacy agreements, or any other kind of surrogacy agreement for that matter, are consistent with Tennessee’s general public policy.  Justice Koch cites that by some estimates, the United States is now second only to India in providing surrogate mothers with over 1400 babies born in the United States each year for international parents.

________________________

*Helen Sfikas Rogers
 Attorney at Law
 Rogers, Kamm & Shea
 The Wind in the Willows Mansion
 2205 State Street
 Nashville,Tennessee 37203
 615-320-0600

 and

 The Franklin Square Building
 317 Main Street
 Suite 206
 Franklin, Tennessee  37064
 615-807-1287

By Jonathan O. Harris*

Our friends at the EEOC are at it again.  Despite a year of bad press due to their repeated acts of overreaching, the Commission has continued to push the envelope, this time with the summer release of “guidance” on the Pregnancy Discrimination Act (“PDA”).

The Commission’s guidance was issued on July 14, 2014, and it was immediately controversial.  For starters, the EEOC gave little to no notice that the guidance was forthcoming.  As such, employers were left without an opportunity to provide their perspective on the PDA’s requirements prior to the guidance’s issuance.  What is more, the guidance just barely passed, by a 3-to-2 vote of commissioners.

Substantively, the guidance is notable for it attempt to conflate the requirements of the PDA with the requirements of the Americans with Disabilities Act (“ADA”).  According to the EEOC, employers must provide reasonable accommodations to pregnant employees.  The agency gets to this result via two routes which, in its eyes, both equally require accommodations to pregnant employees.

First, the EEOC looks to the PDA, which states that “women affected by pregnancy ... shall be treated the same for all employment-related purposes ... as other persons not so affected but similar in their ability or inability to work.” 42 U.S.C. § 2000e(k).  Citing this language, it is the EEOC’s view that if an employer provides light duty to some of its employees, it must provide it to pregnant employees as well, since doing so would not be treating those employees “the same for all employment-related purposes.”  For example, if an employer offers light duty for employees who are injured at work, but not for pregnant employees, that employer violates the PDA—so believes the EEOC.

Second, the EEOC looks to the ADA.  While saying that not all pregnancies constitute a disability within the meaning of the ADA, the EEOC then goes on to say that a pregnant employee shall be considered disabled if she has “pregnancy-related impairments” such as “nausea” or “swelling, especially in the legs.”  Given how often such conditions arise in pregnancies, it is safe to assume that, as a practical matter, the agency deems all pregnant employees to have a disability and thus be eligible for accommodations.

The expansion of the PDA’s coverage goes further in this guidance.  According to the EEOC, a policy that only allows for a short period of leave for new employees can have a disparate impact on pregnant employees, and thus violates the PDA, absent the proving of a business necessity for that policy.  A weightlifting requirement can cause a disparate impact too, because the EEOC believes it causes a disparate impact on pregnant employees.

Not content to stop there, the guidance attempts to tackle some social issues of the day.  The EEOC states that employment decisions based upon a female employee’s use of contraceptives violates Title VII.  An employer also violates Title VII by providing health insurance that excludes coverage for prescription contraception, so says the EEOC.  Continuing still, the guidance states that Title VII protects women from being fired for having an abortion or contemplating an abortion, and that it violates the PDA to pressure an employee to have or not have an abortion.

In a representative democracy, one must ask whether it makes sense for an agency to be making the sweeping proclamations set forth above.  There may very well be sound policy reasons for some of these proclamations. But the EEOC has, in effect, rewritten the PDA and ADA to say things that, as written by Congress, those acts do not say.

Keep an eye on the upcoming Supreme Court case of Clark v. United Postal Service.  In that case, the Supreme Court will decide whether or not the PDA requires employers to provide light duty to pregnant employees, if they also provide light duty to employees injured on the job.  Irrespective of how that case is decided, it will still be the EEOC’s position that the ADA requires employers to give pregnant employees light duty, if they have nausea, swollen ankles or difficulty lifting.  It will likely be some time before all of the above issues are addressed by the courts.

_________________________

*Jonathan O. Harris is a shareholder at the Nashville office of Ogletree Deakins, where he represents employers in employment and labor law matters. He is a graduate of Washington University School of Law.  Jon may be reached at 615-687-2215 or jon.harris@ogletreedeakins.com.

by Ben Bodzy*

On April 16, 2014, the Tennessee General Assembly passed significant employment litigation reform that will benefit employers throughout Tennessee.  The bill places caps on compensatory damages, such as emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non-pecuniary losses that can be recovered in employment litigation.  These caps apply to claims brought under the Tennessee Human Rights Act, the Tennessee Disability Act, and the Tennessee Public Protection Act ("TPPA").  The caps range from $25,000 to $300,000, depending on the number of employees employed by the employer:

The damages caps do not apply to back pay, interest, front pay, and equitable relief.  The statute provides that the court will not inform the jury of the limitations, but it will conform any verdict to comply with the limits.

The practical effect of this legislation will be to bring Tennessee employment claims in line with federal statutes, and to assist the parties in quantifying their potential exposure in employment litigation.  Prior to this legislation, it was possible to bring uncapped claims under state statutes to circumvent the limits in place under federal statutes.  By quantifying potential exposure, claims will be easier to settle, from both sides’ perspectives.

The legislation also eliminates common law claims for retaliatory discharge in any litigation that could be brought under the TPPA.  Currently, Plaintiffs can bring both common law and statutory claims for "whistleblowing" (refusing to participate in or remain silent about illegal activity).  Under the new legislation, an employee may only proceed under the statutory claim, which requires the employee to prove that the alleged whistleblowing was the "sole cause" of the employee’s termination (as opposed to a “substantial motivating factor”). 

Finally, the legislation eliminates individual supervisor liability under the Tennessee Human Rights Act.  This conforms state statutes to federal law, so that employees must bring their claims against their employer, rather than the individual supervisors or managers involved in decision-making relating to the employee's employment.

The bill was signed by Governor Haslam on May 22, 2014, and it applies to all causes of action accruing on or after July 1, 2014.

_________________________

*Ben Bodzy is a shareholder with Baker Donelson in Nashville, Tennessee, where he practices labor and employment law. He is a graduate of Southern Methodist University Law School. Ben may be reached at bbodzy@bakerdonelson.com or (615) 726-5640.

The Justice Department, through the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), reached an agreement with United Continental Holdings Inc. resolving a claim that divisions of the company, previously operating as Continental Airlines, discriminated against individuals because of citizenship status in violation of the Immigration and Nationality Act (INA).   

The investigation, which was initiated based on a telephone call to OSC’s hotline, found the company requested lawful permanent resident employees, but not U.S. citizen employees, to complete additional I-9 forms and provide additional proof of employment eligibility after hire. The INA’s anti-discrimination provision prohibits employers from placing additional documentary burdens on work-authorized employees, such as set forth above, during the employment eligibility verification process based on their citizenship status. 

Under the settlement agreement, Continental will pay $215,000 in civil penalties, create a $55,000 back pay fund to compensate individuals who may have lost wages due to the company’s practices, and undergo training on the anti-discrimination provision of the INA.  The company will also be subject to departmental monitoring of its employment eligibility reverification practices for a period of two years.    

This settlement demonstrates employers, large and small, continue to violate the INA’s anti-discrimination provisions.  Thus, it is important to incorporate INA anti-discrimination provisions in both a company’s I-9 Compliance policy as well as immigration compliance training.

_________________________

* Bruce E. Buchanan is an attorney at the Nashville and Atlanta offices of Siskind Susser P.C., where he practices immigration and employment law.  He is a graduate of Vanderbilt University School of Law. Bruce writes a blog on employer immigration compliance for ilw.com, located at www.EmployerImmigration.com, and is a monthly contributor to LawLogix's I-9 and E-Verify Blog, located at http://www.lawlogix.com/blog, and HR Professionals Magazine. Bruce may be reached at bbuchanan@visalaw.com or (615) 345-0266.

By: J. Gregory Grisham & Anthony M. Noel[i]

The Tennessee Court of Appeals for the Eastern Section recently affirmed the dismissal of a common law and statutory retaliatory discharge lawsuit against a Knoxville Ford dealership. The Court of Appeals found that the defendant’s violations of two Tennessee statutes (permitting test drives without dealer license plates and proof of insurance) did not “implicate a matter of fundamental or significant public concern so as to overcome the well-established Tennessee employment at-will doctrine.” The Court also found that the Human Resources Manager, who made the decision to terminate the plaintiff for destruction of company property, was unaware that the plaintiff had refused to go on test drives; therefore, the plaintiff was unable to prove that his conduct could have been a factor in the defendant’s decision to terminate his employment. McMillin v. Ted Russell Ford, Inc., 2014 WL 3778617 (Tenn. Ct. App. July 31, 2014).

Background Facts

The plaintiff Paul McMillin (“McMillin”), a former law enforcement officer, was a car salesman for Ted Russell Ford in Knoxville. Shortly after he was hired, McMillin was stopped by a police officer because the dealership vehicle he was driving did not have a license plate. McMillin thereafter allegedly informed his supervisor Gene Morris that he would not in the future perform test drives without plates because it was unlawful. Thereafter, McMillin did not go on test drives. Approximately two months later, McMillin’s son Michael (who also worked at the dealership as a salesman), with his father’s assistance, attempted to install steel plates and latches to secure the work desk he shared with his father but they were not installed properly. Morris first observed the padlocks two months later as well as the holes that were drilled in the desk. Morris testified that McMillin told him that McMillin had put the padlocks on the desk.

Morris had photographs taken and sent them to Joe Jackson the Dealership’s Human Resources executive and informed him of the damage to the desk. Jackson then made the decision to terminate McMillin for “destruction of company property.” It was undisputed that no one told any member of management prior to McMillin’s termination that his son had any involvement in the installation of the padlocks.

The Court’s Decision

Following his termination, McMillin, acting pro se, filed a lawsuit against the defendant alleging common law retaliatory discharge, a violation of the Tennessee Public Protection Act, negligence and “fraud by misrepresentation.” The defendant filed a motion to dismiss and/or for summary judgment which was granted by the trial court.

On appeal, the Court of Appeals discussed the prima facie elements for a claim of common law retaliatory discharge and under the Tennessee Public Protection Act.  To establish a claim for common law retaliatory discharge a plaintiff must prove:

(1) An employment-at-will relationship existed;

(2) The employee was discharged;

(3) The reason for the discharge was that the employee attempted to exercise a statutory or constitutional right, or for any other reason which violates a clear public policy evidenced by an unambiguous constitutional, statutory, or regulatory provision; and

(4) Substantial factor in the employer's decision to discharge the employee was the employee's exercise of protected rights or compliance with clear public policy.

Webb v. Nashville Area Habitat for Humanity, 346 S.W.3d 422, 437 (Tenn. 2011).

To establish a violation of the TPPA, a plaintiff must prove the following four elements:

           (1) The plaintiff was an employee of the defendant;

           (2) The plaintiff refused to participate in or remain silent about illegal activity;

(3) The defendant employer discharged or terminated the plaintiff's employment; and

(4) The defendant terminated the plaintiff's employment solely for the plaintiff's refusal to participate in or remain silent about the illegal actions.

Id.

The Court of Appeals proceeded to review in detail its 2006 opinion in Franklin v. Swift Transp. Co., 210 S.W.3d 521, 527 (Tenn. Ct. App. 2006). In Franklin, the Court found the defendant’s violation of a Tennessee Department of Safety regulation requiring that the original, rather than a copy, of an IRP Cab Card be carried in a commercial vehicle did not implicate an important public policy nor violate a regulation related to health or safety. Based on the reasoning in Franklin, the Court of Appeals held “that the dealership's policy and actions with respect to test drives—while violations of statutory prescriptions—do not implicate a matter of fundamental or significant public concern so as to overcome the well-established Tennessee employment-at-will doctrine.”

The Court of Appeals further reasoned:

The statutes implicated by the facts of this case are important and, like all laws, need to be obeyed. That, however, is not the issue before us. The issue is whether these statutory prescriptions, under the facts of this case, are a matter of fundamental or significant public concern. In this case, it seems clear to us that the consequences of violations by the dealership are negligible. The ability of law enforcement to identify the ownership of a violating vehicle is, without question, easy. The same can be said for one damaged in an accident with such a vehicle. When these minimal consequences are considered, we cannot say that the subject statutes fall within the category of fundamental or significant public concern. Hence, they do not trump Tennessee's employment-at-will doctrine under the facts of this case….

The Court of Appeals also cited, as an alternative basis for affirming the trial court’s grant of summary judgment to the defendant, the decision maker’s lack of knowledge of McMillin’s refusal to go on test drives without registration plates, or without proof of registration or proof of insurance in the vehicle at the time the termination decision was made. Given the decision maker’s lack of knowledge of this fact (which was undisputed) the alleged exercise of a protected activity could not have been the sole factor or a substantial factor in the employer's decision to terminate McMillin’s employment. Finally, the Court of Appeals found that the defendant had based the termination decision on its belief that McMillin had acted alone in “drill[ing] holes in the desk drawers, attached steel plates and latches, and fastened big locks to the desk drawers” which it regarded as destruction of company property. The Court of Appeals found that the defendant had demonstrated a legitimate nondiscriminatory reason for its termination decision and that McMillin had failed to show that the reason given was not the true reason or a pretext for unlawful retaliation.

Take Aways

Here’s the latest newsletter from TBA’s Labor and Employment Section.  I want to thank this issue's authors for their insightful articles – Jon Harris, Greg Grisham and Ben Bodzy. If you have an article or idea for an article, I urge you to e-mail me at bbuchanan@visalaw.com or call me at 615-345-0266.

Bruce Buchanan

Mark your calendars for the TBA Corporate Counsel Law Section CLE scheduled for Friday, March 6, 2015.  If you would like to register, please click here!