Friday, October 19, 2012

The real problem with individual liability

As Senate Bill 383—Ohio’s attempt at comprehensive employment discrimination reform—weaves its way through the legislative process, a lot of blood is going to be spilled. In fact, it started yesterday in the comments to my post discussing the legislation.

One of the key battlegrounds will be the issue of whether Ohio’s discrimination law should provide for liability of managers and supervisors for their own individual acts of discrimination. My friends from the plaintiffs’ bar (and, yes, they are my friends) accuse me of protecting those who should be punished. Nothing could be less accurate.

To put this issue into context, I need to take a step back and explain why individual liability is an issue at all. It is universally accepted that Title VII does not provide for the individual liability of supervisors and managers. Ohio’s counterpart, however, is different. In 1999—in Genaro v. Central Transport—the Ohio Supreme Court held that contrary to federal law, Ohio’s state employment discrimination statute renders supervisors and managers personally liable for their own discriminatory acts.

S.B. 383 eliminates this difference, and brings Ohio’s statute in line with its federal counterpart by eliminating individual liability.

Opponents of this legislation argue that individual liability for managers and supervisors is needed to properly deter discriminatory and harassing behavior and hold accountable those who perpetrate it.

This argument is a fallacy. Employees aggrieved by invidious and intentional discrimination or harassment have claims available against the individual perpetrators—assault, battery, intentional infliction of emotional distress, invasion of privacy, and defamation, to name just a few. These civil remedies are in addition to criminal penalties that one can seek for the most egregious misconduct.

Opponents of this legislation argue that it protects sexual predators.

In addition to being offensive, headline grabbing hyperbole, this argument also is a fallacy. If you believe that the employment discrimination laws should punish predatory behavior, then the availability of a remedy should neither depend on the employment status of the accused, nor the statute under which the suit is brought. Yet, currently, only managers and supervisors can be held liable. One can never sue a non-supervisor or non-managerial co-worker for discrimination, no matter how bad the conduct. Moreover, one can bring suit against a manager or supervisor under state law; federal law provides no such remedy. If we are really concerned about punishing predators, then we shouldn't differentiate between supervisors and non-supervisors, or between state and federal laws.

Opponents of this legislation argue that the only reason employers want to eliminate individual liability is to expand the availability of the removal of cases to federal court.

This argument is also a fallacy. When an Ohio plaintiff sues a non-Ohio company in state court under state law, the employer can take the case to federal court. Adding a local manager or supervisor as a defendant eliminates this possibility. The reality is that if a plaintiff wants to keep a case in state court, he or she will find a cause of action to name a non-diverse individual defendant, whether or not a statutory claim exists against that individual under the employment discrimination statute.

By focusing on the rare example of a workplace sexual predator, opponents of S.B. 383 gloss over the real harm caused by individual liability. Consider this example. Jane Doe, a supervisor for ABC Company, has to fire a poor performing employee. She has counseled the employee repeatedly for the past two years, but his performance has not improved. Unfortunately for Jane Doe, this employee happens to be the only African-American in her department. Five years after the termination, Jane Doe’s doorbell rings at 9 p.m. She answers her apartment door to find a process server, lawsuit in hand. The employee she had terminated five years earlier has sued Jane Doe, in addition to her company, for race discrimination. Ms. Doe had done nothing other than her job. Now, she is forced to defend against allegations of discrimination and bigotry.

This example is much more common than the workplace sexual predator that the opponents of S.B. 383 hold out as the standard bearer. There is little, if any benefit to keeping individual liability as a part of Ohio’s employment discrimination statute, and it is a key facet of this reform that must become part of the law of this state.