Senate Bill No. 43

On May 8, 2017, the Missouri General Assembly passed Senate Bill No. 43, a bill that proposes many substantial changes to the Missouri Human Rights Act (MHRA).

New Legal Standard of Liability

SB 43 will significantly change the standard for determining whether an employer is liable for discrimination under the MHRA.

Currently, an employment practice is unlawful when an individual’s protected trait is a “contributing factor” in the decision to discriminate. This has proven to be a very lenient and Plaintiff-friendly standard.  SB 43 would change the standard from a “contributing factor” to a “motivating factor.”

SB 43 defines “motivating factor” to mean, “the employee’s protected classification actually played a role in the adverse action or decision and had a determinative influence on the adverse decision or action.” In addition, the new law would require the person to prove that such action was the direct proximate cause of the claimed damages.

New Definition of Employer

Currently, persons “directly acting in the interest of employers” are considered employers under the MHRA and can be held individually liable for discriminatory practices. This act modifies the definition of employer to exclude such individuals. The act similarly excludes the following from the definition of employer: (1) the United States government; (2) Corporations owned by the United States; (3) Indian tribes; (4) Certain departments or agencies of the District of Columbia; (5) Private membership clubs; and, (6) Corporations and associations owned or operated by religious or sectarian organizations.

Exclusive Remedy

The bill states that the MHRA, the Workers’ Compensation chapter, and the general employment law chapter shall be the exclusive remedy for any and all claims for injury or damages arising out of the employment relationship.

Filing of Complaints with the Commission

Current law provides that any person claiming to be aggrieved by an unlawful discriminatory practice may make, sign, and file with the Missouri Human Rights Commission a verified complaint in writing. SB 43 stipulates that such persons must file such a complaint as a jurisdictional condition precedent to filing a lawsuit under the MHRA.

Furthermore, the failure to timely file a complaint with the Commission will now deprive the commission of jurisdiction to investigate the complaint. Complainants must file a complaint with the Commission within 180 days of the alleged act of discrimination. Importantly, if a person fails to timely file a complaint with the Commission within 180 days, defendants can now raise this failure as a complete defense at any time.

Judicial Interpretation

The bill repeals the case McBryde v. Ritenour School District and states that juries must be given an instruction expressing the “business judgment rule.” When applied, the business judgment rule protects corporate officers and directors from liability for decisions within their authority made in good faith, uninfluenced by any other consideration than the honest belief that the action subserves the best interests of the corporation.  The business judgment rule recognizes that officers and directors are not prophets who can ensure a company’s success, and therefore the legal system should not punish a prudent officer or director if he or she mistakenly makes a poor decision.

The bill also recommends the use of the burden shifting analysis used by the U.S. Supreme Court in McDonnell-Douglas Corp. v. Green when it is not a case involving direct evidence of discrimination. Consequently, judges will have more discretion to dismiss frivolous lawsuits early in litigation through summary judgment, expediting the judicial process and reducing legal fees for defendants.

The bill expressly abrogates all existing Missouri approved jury instructions concerning the MHRA.

Relief Available Under MHRA Cases

SB 43 limits the amount of damages available in MHRA cases.  Specifically, if passed, damage awards will not exceed back pay and interest on back pay and $50,000 for employers with between 5 and 100 employees, $100,000 for employers with between 100 and 200 employees, $200,000 for employers with between 200 and 500 employees, or $500,000 for employers with more than 500 employees.

Impact for Employers

Now that the General Assembly has approved it, SB 43 will go to Governor Greitens. Many believe he will sign it into law. If so, this legislation will come as welcome news for many employers in Missouri.  For small businesses, it will restore fairness and balance to Missouri’s employment discrimination laws and protect our business community from frivolous lawsuits.