In a critical follow-up to Kruchowski, et al. v. The Weyerhaeuser Company, a case we first brought to your attention in December, the Oklahoma Supreme Court has again expanded the scope of damages available to employees asserting certain discrimination claims against Oklahoma employers.
On February 24, 2009, the State’s highest court issued its opinion in Shirazi v. Childtime Learning Center, Inc.,
casting additional light on the so-called “public policy” wrongful
discharge claim under Oklahoma law. Reversing a litany of cases
extending nearly 20 years, the current court has declared that “public
policy” tort claims should be available to plaintiffs alleging wrongful
discharge based upon race, color, religion, sex, national origin, or
handicap. This ruling expands upon the holding of Kruchowski, which provided the same “public policy” claim to purported victims of age-based wrongful termination.
This ruling will undoubtedly usher in a significant change in the
litigation of wrongful discharge claims in Oklahoma. Most importantly,
the broad availability of this cause of action will expose Oklahoma
employers to nearly unlimited damages in routine discrimination cases –
effectively eliminating the well-known damage caps provided under
federal employment laws.
Background
Since 1989, the Oklahoma Supreme Court has recognized a cause of
action for at-will employees that claim to have been terminated in
violation of the expressed “public policy” of Oklahoma. These “public
policy” claims are also known as “Burk tort” claims, after the 1989
case that first recognized the legal theory.
However, almost immediately following Burk, courts refused
to allow a “public policy” claim in cases of traditional
discrimination, even though the public policy expressed in the Oklahoma
Anti-Discrimination Act (“OADA”) clearly prohibited such
discrimination. The courts routinely concluded that no state law cause
of action was necessary in such cases because federal
anti-discrimination laws provided adequate remedies for victims of
illegal discrimination.
This distinction has always been of critical importance. Federal
anti-discrimination laws generally provide caps on certain forms of
damages. For example, a successful race discrimination plaintiff suing
under Title VII of the Civil Rights Act of 1964, a federal law, cannot
recover more than $300,000 in punitive and emotional distress damages –
even against a very large employer. Although back pay, front pay and
attorney’s fees may be added to this sum, Title VII claims are
typically susceptible to a reasonable calculation of maximum exposure
to the employer. And, multi-million dollar verdicts from emotional
juries are routinely reduced pursuant to the caps provided by federal
law.
Oklahoma’s “public policy” tort claim carries no such damage caps. Thus, the courts’ initial refusal to apply the Burk legal theory to ordinary discrimination claims kept the maximum exposure calculation available to employers.
A New Trend
Consistent efforts by the plaintiff’s bar in Oklahoma have now resulted in the reversal of this long-held precedent. In Kruchowski,
the Oklahoma Supreme Court held that the Oklahoma Constitution requires
uniform remedies be made available to all members of a given class.
Specifically, the Court concluded that victims of age discrimination
are not provided the same remedies as those available to victims of
other forms of discrimination, and therefore, a “public policy” claim
should be available to those plaintiffs. Thus, after Kruchowski,
a purported victim of age discrimination is no longer limited to the
recovery of back pay and “liquidated” damages under the federal Age
Discrimination in Employment Act (“ADEA”). Rather, he could now
recover essentially unlimited damages under the “public policy”
framework.
The Kruchowski Court left open the possibility, however, that such a ruling would only apply to age discrimination plaintiffs. The Shirazi opinion, issued on February 24, 2009, forecloses that hope. The Court has now made clear that:
[A] plaintiff may pursue a state law Burk tort claim for
wrongful discharge in violation of public policy when the available
remedies to the same class of employment discrimination victims are not
the same - regardless of whether the remedies originate under federal
or state law. Lest there be any mistake, pursuant to the Oklahoma
Anti-Discrimination Act, 25 O.S. 2001 §1302, race, color, religion,
sex, national origin, age, and handicap are the types of discrimination
within the same employment class to which we refer.
It is beyond dispute that, when examining both federal and state
laws, the remedies available to these groups of individuals are not
“the same.” Thus, the Oklahoma Supreme Court has now, in direct
contradiction to its prior pronouncements, expressly provided a state
law “public policy” cause of action for victims of discrimination.
Without the damage caps provided by federal law, maximum exposure for
an employer in a discriminatory discharge case is simply no longer
quantifiable. That is exposure is, for the most part, now unlimited.
Another significant result of this ruling will be a change in the
venue of most wrongful discharge cases. Because discriminatory
discharge cases have, until now, been decided under federal law,
employers have insisted upon trial in federal, rather than state,
courts. These federal venues have traditionally provided several
advantages to employers over state courts, including stricter adherence
to procedural and discovery rules, as well as more favorable jury pools
and better results with summary judgment motions. Now that employees
are able to file a state law “public policy” claim, employers
will most often be precluded from seeking trial in federal court.
Simply put, better plaintiffs’ lawyers will likely file solely state
law claims – with no federal law at issue, the federal courts will have
no jurisdiction over the case.
The Bottom Line
While the December Kruchowski decision hinted at a
sea-change in Oklahoma employment litigation, the text of the opinion
left some doubt as to its full effects. The Shirazi decision
erases all such doubt. Absent immediate intervention by the Oklahoma
legislature to significantly amend or repeal the OADA, which forms the
basis of both decisions, litigation of wrongful discharge claims in
Oklahoma will be significantly changed by the Shirazi decision.
Employers now face unlimited financial exposure in more hostile court
rooms, where their termination decisions will be increasingly
scrutinized.
Now, more than ever, employers must ensure that termination
decisions are based upon legitimate, non-discriminatory and
non-retaliatory justifications, and that underlying documentation
supports those justifications. Employers should further consider
implementing a mandatory arbitration program to limit the effect of
potential runaway juries.
As always, should you have any questions about this change in
Oklahoma law, or possible ways to minimize its impact, please contact
any of McAfee & Taft’s Labor and Employment attorneys.