Labor and Employment

Recovery of Damages Under PEPFA

Very few state appellate decisions have addressed the Public Employee Political Protection Act (PEPFA), codified at Tenn. Code Ann. §8-50-601 et seq., since the legislation was enacted in 1980. Until recently, no state appellate decision has addressed the types of damages recoverable for a violation of PEPFA. In Keeling v. Coffee County, No. M2017-01809-COA-R3-CV (Sept. 18, 2018), the Middle Division of the Court of Appeals did just that.

Melinda Keeling was employed by Coffee County in the codes and safety department, which was supervised by Glenn Darden. Eventually Ms. Keeling complained to the County Mayor that Mr. Darden was frequently not available to help the public. Mr. Darden learned of her communication with the mayor and retaliated against her by taking away duties that provided compensatory time off, giving her the cold shoulder, and putting a negative letter in her personnel file. Ultimately, Mr. Darden eliminated Ms. Keeling’s position, ostensibly because of lack of funds and/or lack of work. Upon Mr. Darden’s retirement, the mayor immediately sought and obtained an amendment to the county budget for the codes department re-establishing the position that Ms. Keeling had held.

At the conclusion of trial, the jury returned a verdict in favor of Ms. Keeling and awarded $10,000 in emotional distress (compensatory) damages. The trial judge trebled this amount to $30,000 pursuant to Tenn. Code Ann. §8-50-603(b). Thereafter, Ms. Keeling filed a post-trial motion requesting the trial judge to award back pay, front pay, loss of employment benefits and prejudgment interest. After much briefing by the parties, the trial court eventually entered a judgment in Ms. Keeling’s favor for back pay in the amount of $90,512.18; back benefits in the amount of $35,890.84; prejudgment interest in the amount of $11,968.39; and front pay in the amount of $16,008.00, for a total of $154,379.41 in equitable damages. Trebling the damages under PEPFA, the judgment for equitable damages was entered in the amount of $463,138.24.

The County made one interesting argument, which was rejected by both the trial court and appellate court. Because PEPFA allows for treble damages, the County argued an award of front pay would create a windfall for Ms. Keeling. In dismissing this contention, the appellate court noted that treble damages are not punitive in nature, but instead such damages under PEPFA encourage open communication by imposing increased costs on the public employer that discourages unfettered communication. Applying reasoning from Coffey v. Fayette Tubular Products, 929 S.W.2d 326 (Tenn. 1996) (punitive damages and front pay) and Trainor v. HEI Hospitality, LLC, 699 F.3d 19 (1st Cir. 2012) (treble damages and front pay), the Court determined that it would be improper to offset or limit front pay damages based upon the recovery of treble damages. Stated another way, front pay and treble damages are not mutually exclusive.

There are two other noteworthy takeaway issues from this case. First, the appellate court affirmed the trial court’s decision to refuse to offset back pay damages by the amount of unemployment benefits received by Ms. Keeling. In doing so, the court noted that “more often than not, such benefits should not be deducted,” citing Barnes v. Goodyear Tire & Rubber Co., 2001 WL 568033, at *8 (Tenn. Ct. App. May 25, 2001). While state appellate courts apply a discretionary standard to whether unemployment benefits may be deducted from back pay, the undersigned author has yet to find a case where an appellate court has affirmed deduction of unemployment benefits from a backpay award. Second, the appellate court reversed the trial court on the issue of mitigation of damages. Ms. Keeling secured employment with an insurance company after her termination from the County, but she later voluntarily left that job. The court noted the County had failed to carry its burden in showing that the insurance job was substantially equivalent employment — meaning virtually identical promotional opportunities, compensation, job responsibilities, working conditions, and status as the job Ms. Keeling held with the County. The Court noted that the insurance job paid less and did not afford state retirement and insurance benefits as did Ms. Keeling’s job with the County. Remember, mitigation is an affirmative defense, and the burden of proof must be borne by the defendant.

The Keeling decision confirms what many employment law practitioners have believed for a long time. That is, PEPFA’s treble damages provision applies to all available remedies, including back pay, front pay, emotional (compensatory) damages, lost benefits and prejudgment interest. Of course, PEPFA allows for the recovery of reasonable attorney fees, which Ms. Keeling’s counsel most likely will have requested by the time of publication of this article.


Doug Hamill is an attorney with the Chattanooga-based firm, Burnette Dobson & Pinchak, where he practices employment law, representing victims of employment discrimination, unlawful retaliation and sexual harassment. Doug received his law degree from the University of Tennessee in 2003. He may be reached at 423-266-2121 or dhamill@bdplawfirm.com.

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No Protections Against Retaliation for Undocumented Worker in Tennessee Courts

Facts

Born in Mexico, Ricardo Torres moved to the United States in 1997 without documentation. Later, Torres applied for a job with Precision Industries Inc. (Precision), a small company in Whiteville, Tennessee. To complete the I-9 process, Torres gave Precision a false Social Security Number. Precision hired him in early 2011, allegedly not knowing he was an undocumented immigrant.

In early 2012, Precision claimed it learned that Tennessee law required employers, by 2013, to review all employees’ documentation to ensure that they were lawfully authorized to work in the United States. Precision planned to implement the review in November 2012. In the meantime, Torres was injured on the job and sought workers compensation. Precision fired Torres in September 2012. It’s unclear why Precision claims that it fired Torres, but Precision denied knowing of Torres’s true immigration status at the time he was fired. Precision fired four other employees in April 2013 after they did not return to work with completed I-9 forms.

Torres claimed that Precision fired him in retaliation for seeking workers' compensation — something that’s illegal in Tennessee. Torres sued Precision in a West Tennessee federal court for retaliatory discharge. He also alleged Precision knew at the time that it hired him that he was an undocumented alien.

Holding

Following a trial, the federal district concluded Torres was not entitled to any relief, because he lacked authorization to work in the U.S. The Court noted, if only Tennessee state law applied, Torres could obtain relief. Indeed, the Tennessee Workers’ Compensation Law defines a covered employee as including those “lawfully or unlawfully employed.” Therefore, the Court reasoned that immigration status does not matter under Tennessee law if an employee is seeking workers' comp or is suing his employer for firing him in retaliation for seeking workers’ comp.

Unfortunately for Torres, however, the Court found that federal law comes into play. In the 2002 Hoffman Plastic decision, the U.S. Supreme Court found the National Labor Relations Board erred in awarding back pay to an undocumented alien because it ran counter to policies embedded in the federal Immigration Reform & Control Act (IRCA). The Supreme Court found that to do so “not only trivializes the immigration laws, it also condones and encourages future violations.”     

Although other Courts have expressed skepticism about extending Hoffman Plastic to other contexts, the Federal District Court for the Western District of Tennessee found that it applies. The Court found IRCA trumps Tennessee state law and it would be counter to IRCA if illegal aliens could freely sue their employers for retaliatory discharge.

Limiting Hoffman, the Court found that undocumented people may still recover in the event that they can prove their employer was aware of their immigration status. “Limiting Hoffman’s applicability to employers that are unaware of their employees’ immigration status serves a dual purpose. First, it alleviates concerns that an employer might abuse immigration policy by knowingly hiring individuals unauthorized to work in the United States with the intent of avoiding certain liabilities down the road. And second, it maintains a consistency with federal immigration policy by ensuring that employers do not profit from their own violations of IRCA.”

At trial, Torres testified that Precision was aware of his illegal immigrant status at the outset of his employment and it knew he had provided a fake Social Security Number. Precision denied this. After judging the credibility of the witnesses, however, the Court found that Precision’s witnesses were more believable.

Consequently, the Court found that Torres’s claims should be dismissed. Interestingly, the Court also suggested that IRCA should trump Tennessee’s Workers’ Compensation Law such that illegal immigrants may not obtain workers comp. According to the Court: “If IRCA prohibits the award of backpay for an employer’s retaliatory discharge of an illegal immigrant under the NLRA in order to avoid incentivizing illegal immigration, then would it not prohibit the State of Tennessee from mandating the provision of workers’ compensation benefits to an illegal immigrant for the same reason?”

Bottom Line

Immigration has been at the forefront of the Trump Administration’s policy objectives, and employers are seeing significant increases in worksite compliance actions by U.S. Immigration and Customs Enforcement (ICE). This judicial decision will add to the pressure that undocumented workers are most certainly feeling by taking protections afforded to other workers with proper documentation.

Based on the federal Court’s decision, undocumented workers’ ability to obtain workers’ comp is also seriously in question. Based on current political sentiments, it also wouldn’t be surprising if the Tennessee legislature intervened to amend the statute. However, this defense would only be available to employers that keep their hands clean and don’t have reason to know that the worker is unauthorized. Not only may employers that are complicit in hiring undocumented workers find themselves targeted by ICE and other authorities, they may be subject to a traditional employment law suit by an undocumented worker.

This case will bolster the ability of Tennessee employers to argue they are immune from suit by an undocumented worker, but it may not be the end of the story and it shouldn’t give employers a false sense of security. Torres could be successful on appeal or other courts could rule differently. Regardless, the immunity defense should only be available to employers that keep their hands clean and don’t have reason to know that the worker is unauthorized. Also, this case came down to a credibility determination during a trial that was surely expensive. Other employers might not be so lucky. In this era of more aggressive immigration enforcement, employers should remain vigilant to ensure that their hiring practices comply with federal and state immigration laws. Violators may be subject to significant liability, including in some egregious cases, personal criminal liability, including jail time, for the hiring manager and other top management officials, who knowingly hire undocumented workers.


Todd P. Photopulos is an attorney with Butler Snow’s Labor & Employment Group. He focuses his practice on Immigration, Employment Counseling and Employment Litigation. Todd may be reached at todd.photopulos@butlersnow.com or (901) 680-7344.

David L. Johnson is Butler Snow’s Labor and Employment Practice Group Leader and has 20 years of experience practicing litigation in a variety of practice areas, including labor and employment, commercial, intellectual property and products liability matters. David may be reached at david.johnson@butlersnow.com or (615) 651-6731.

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Letter from the Editor

Here’s the latest newsletter from TBA’s Labor and Employment Section. I want to thank this issue's authors for their wonderful articles – Donna Mikel, Todd Photopulos, David Johnson and Doug Hamill. If you have an article or an idea for an article, I invite you to e-mail me at bbuchanan@sblimmigration.com.

                                                                       - Bruce Buchanan

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Service Industry Strikes Aimed at Building Support for Unions

The group Fight for $15, which pushed for a $15 minimum wage, has organized a service industry strike to take place in seven states between Oct. 2 and Oct. 4, the Washington Post reports. Workers at major fast-food chains will walk off the job. Alongside the walkout, other strikes and rallies by airport, hospital, child-care and higher education workers will occur to raise support for unions leading into the November election. Union membership in the U.S. has hit historic lows; only 10.7 percent of American workers were union members last year, the lowest since the 1930’s. However, American interest of nonunion employees in joining a union is at 48 percent, a four-decade high.

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NLRB General Counsel’s Office Recommends Ending Union Email Rule

According to a brief filed Friday, the National Labor Relations Board general counsel’s office has recommended the reversal of the 2014 Obama-era decision that allowed employees to organize unionization using employer email systems, Bloomberg BNA reports. The brief asserts that employers should be able to restrict email use in a nondiscriminatory manner and that allowing union organization through employer email leads to lower workplace productivity and compromises in digital security. The general counsel’s recommendation aligns with the opinion of the U.S. Chamber of Commerce and other business groups. The NLRB is considering revising its email rule and has invited public input on the issue; all interested parties may file a brief by the new, extended deadline of Oct. 5.

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7th Circuit to Rule on Obesity ADA Protections Case

The U.S. Court of Appeals for the Seventh District faces a challenging case surrounding whether severely obese workers without an underlying medical condition should be protected from job discrimination under the Americans with Disabilities Act, Bloomberg BNA reports. A former Chicago Transit Authority bus driver, Mark Richardson, alleges that the CTA violated the ADA after they regarded him as disabled due to his severe obesity and fired him, though Richardson claims he is still able to work as a bus driver. The Equal Employment Opportunity Commission does consider severe obesity alone to be a physical impairment protected under the ADA and has a case pending before the Ninth Circuit arguing just that; however, in previous years, the 8th, 2nd and 6th Circuits have ruled the opposite way. The Obesity Action Coalition, AARP and other groups have filed friend of the court briefs with the 7th Circuit in support of Richardson. The ruling of the court will affect Illinois, Indiana and Wisconsin employers.

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Former Toys ‘R’ Us Employees Seek Severance From Lenders

Two worker advocacy groups are seeking additional severance funds from lenders that financed this year’s bankruptcy and liquidation of the toy store chain Toys “R” Us, Bloomberg reports. The lending companies, Angelo Gordon & Co. LP and Solus Alternative Asset Management, have responded with no intention of providing additional funds after already ensuring employees received full payment for the 60-day period following a WARN notice pursuant to the Worker Adjustment and Retraining Notification Act. Two of the three firms that purchased the company a decade ago in a leveraged buyout have agreed to contribute to help meet the $75 million needed to pay for 33,000 employee severances.  

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East Tennessee Meatpacking Plant Owner Admits Tax Evasion

The owner of the East Tennessee Southeastern Provision meatpacking plant, James Brantley, agreed to plead guilty to federal charges of tax evasion, wire fraud and employing unauthorized immigrants, the Knoxville News Sentinel reports. In April, I.C.E. agents and I.R.S. investigators conducted the nation’s largest single immigration crackdown in more than 10 years at the plant; they rounded up 97 people on illegal entry charges. This action sparked statewide protests and unsuccessful attempts to toughen punishments for employers who knowingly hire undocumented workers. Brantley’s hiring of undocumented workers allowed him to pocket millions of dollars by ignoring safety regulations, violating federal wage and hour laws and avoiding unemployment and workers’ comp premiums. He will enter a formal plea in court on Sept. 12.

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