United States: Missouri Bill SB 43 Goes Into Effect

In June, the Missouri Legislature passed Senate Bill 43 ("SB 43") altering several key provisions of the Missouri Human Rights Act ("MHRA"). Governor Eric Greitens signed the bill into law on June 30, setting the effective date of the Act as August 28, 2017. Despite spelling out clear sweeping changes, the law left many employers wondering what happens with charges filed after August 28 but with allegations of discrimination occurring before August 28, 2017.

Article I, Section 13 of the Missouri Constitution generally prevents the retrospective application of laws. However, Missouri courts have generally recognized key exceptions to that prohibition. The primary, relevant exception to the prohibition provides that merely procedural laws will be allowed to apply retroactively. Alternatively, laws that are found to affect substantive law will not be applied retroactively. While it is unclear exactly what a court would find, this exception sheds light for employers on the application of the new MHRA.

Missouri's Damages Caps Are Unlikely To Be Applied to Discriminatory Acts Alleged Before August 28, 2017

One of the key changes of SB 43 is a cap on total combined damages for both compensatory and punitive damages. The size of the employer's workforce will determine the cap amount, which ranges from $50,000 to $500,000, plus back pay. The breakdown in the damages caps include the following:

  • $50,000 for employers with between 5 and 100 employees;
  • $100,000 for employers with between 101 and 200 employees;
  • $200,000 for employers with between 201 and 500 employees;
  • $500,000 for employers with more than 500 employees.

Missouri case law is pretty well-developed that caps on damages are substantive in nature. The Missouri Supreme Court has applied this theory in caps on damages for wrongful death and medical malpractice claims. 1 Since SB 43's new damage allowances would cap the amount plaintiffs could previously recover, courts will likely not allow the application of such caps to discriminatory acts that are alleged to have occurred before August 28, 2017.

While the cap on damages will benefit employers in the long term, employers facing allegations of discrimination that occurred before August 28 still need to factor their exposure based on Missouri's previously uncapped in evaluating claims of discrimination. Failing to do so may cause an employer to greatly underestimate damages its exposure in such a claim.

Missouri's Adoption of the "Motivating Factor" Standard of Proof and the Federal Burden Shifting Framework for Summary Judgment Will Likely Apply Retroactively

Under Missouri's new law, individuals bringing claims of employment discrimination must prove that a protected class such as race, gender, or age, was "the motivating factor" for an employer's alleged adverse employment action. This change tightened Missouri's previous causation standard which required plaintiffs only to show that protected class was a "contributing factor." In addition, the updated law requires Missouri courts to implement the Federal McDonnell Douglas burden-shifting framework for summary judgment motions, which have no direct evidence of discrimination. This framework occurs in three steps: (1) the plaintiff must plead and prove facts to support a legal claim for discrimination; (2) the burden shifts to the employer to articulate some legitimate, non-discriminatory reason for the action; and (3) the burden shifts back to the employee to show that the employer's reason for its action is merely a pretext for discriminatory action.

In 1987, a Missouri court held that "a statute relating solely to procedural laws, such as burdens of proof and rules" apply even if the action or transaction occurred before the new law's enactment. 2 Missouri's new motivating factor standard and summary judgment framework likely fall under procedural laws as they apply to burdens of proof. It is likely that Missouri courts would allow these provisions of SB 43 to apply retroactively. This application would be beneficial for employers because the law serves to tighten the existing standards in the employer's favor.

The text of SB 43 "abrogates all Missouri approved jury instructions specifically addressing civil actions brought under this chapter which were in effect prior to August 28, 2017." This language is a clear indication from the Missouri Legislature that it intended the motivating factor analysis to replace the contributing factor analysis upon SB 43's effective date. Accordingly, the more favorable motivating factor analysis will apply in all cases filed after August 28, 2017.

Conclusion

It is unclear what a court will find in regards to lawsuits filed after August 28, 2017, but past case law can help shed some light on the likely result of the retroactive application of the new law. The updated MHRA levels the field for employers in the long term. However, employers defending charges for alleged discriminatory acts occurring before August 28, 2017, should factor Missouri's old damage scheme into the evaluation of the charge but look forward to a more favorable motivating factor analysis.

Footnotes

[1] State ex rel. St. Louis-San Francisco Railway Company v. Buder, 515 S.W.2d 409 (Mo. banc 1974) (wrongful death); Klotz v. St. Anthony's Med. Ctr., 311 S.W.3d 752, 759-60 (Mo. 2010) (medical malpractice).
[2] State v. Thomaston, 726 S.W.2d 448, 461 (Mo. Ct. App. 1987).

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