Federal Judge Sends Novel Damages Question in Employment Dispute to State Court
"The court could answer each of these lingering questions in favor of either Johnson or Hertz. But at this stage, the court need not, and should not, definitively resolve these questions. Instead, Missouri state courts should have the first opportunity to determine these important issues of state law," U.S. District Judge Stephen R. Clark for the Eastern District of Missouri said.
November 14, 2024 at 12:42 PM
5 minute read
Employment LawIn a novel interpretation of recent Missouri law, a federal judge sent a case against car rental company Hertz back to the state court to sort out exclusive remedy claims for damages arising out of an employment relationship.
In a Tuesday opinion, U.S. District Judge Stephen R. Clark for the Eastern District of Missouri determined that the federal court lacked jurisdiction to weigh in on a dispute brought by former employee Jamaica Johnson against The Hertz Corp. and one of its supervisors accused of assault. In Johnson v. Hertz, the court remanded the suit to back to the St. Louis Circuit Court to determine whether Johnson fraudulently joined the supervisor, Christopher Brooks, to the litigation.
Hertz removed the litigation to federal court. This week, the district court sided with Johnson on her motion to remand the case to state court. Clark concluded that the Missouri state courts "should have the first opportunity to determine these important issues of state law."
"In 2017, Missouri enacted a new law providing exclusive remedies for claims for damages or injury arising out of an employment relationship. The Missouri appellate courts have not had occasion to determine the scope and contours of that law," Clark said. "This case presents novel questions of interpretation of that law, particularly as to the allegedly fraudulently joined defendant. That presence of that defendant destroys diversity, and this court accordingly lacks subject-matter jurisdiction."
Hertz claimed that it was fradulently joined with claims against Brooks, who is accused of sexually harassing Johnson. Johnson claimed Brooks grabbed and smacked her buttock, and sent her a photo of his genitalia. She alleged that her request to be transferred to a different facility was denied, and she was instead transferred to an office where Brooks was the store manager. Johnson claimed that after speaking to one of her superiors about the ongoing harassment and not being paid proper wages, she overheard her superior speaking poorly about her and potentially conspiring to get her fired, according to the opinion.
These events caused Johnson to approach her general manager, who she claims dismissed her concerns. After voicing her concerns that same day Johnson was suspended over allegations that she threatened co-workers and threatened to bring a gun to work. Johnson was allowed to finish her shift that day, and Brooks claimed to not know about the decision to suspend her. Police later arrived and patted Johnson down, but did not find a weapon on her person. Throughout these events, Johnson claimed “Brooks acted within the scope of his employment or, alternatively, Brooks acted in his individual capacity,” according to the opinion.
Johnson was terminated for "disrespectful and threatening behavior towards [her] co-workers and manager." She filed suit in state court, alleging Hertz violated the Missouri Human Rights Act, the Missouri Minimum Wage Law, and the Missouri Whistleblower Protection Act. She alternatively claimed that Brooks assaulted and battered her.
Hertz claimed that Johnson fraudulently joined Brooks, arguing that there is no reasonable basis to conclude that the state might impose liability on Brooks because the MHRA preempts Johnson's assault and battery claims against him. Johnson claimed that the MHRA didn't preempt those claims as she alternatively pleaded that they occurred outside of the scope of her employment relationship with Brooks.
The court pointed to numerous amendments Missouri made to the MHRA, Missouri Revised Statute Section 213.010, in 2017, including making "section 213.070, and two other statutes, 'the exclusive remedy for any and all claims for injury or damages arising out of an employment relationship.'"
According to Clark, Section 213.070.2 preempts all claims for injury or damages arising from an employment relationship.
"Thus, the fraudulent-joinder analysis raises the question of whether 'there is arguably a reasonable basis for predicting that' section 213.070.2 does not preempt Johnson’s assault and battery claims against Brooks, an individual defendant whom Hertz had employed when these events occurred," Clark said, noting that the absence of guidance from the state court left lingering questions regarding the scope of the exclusive-remedy provision and its application to the present suit.
These questions included whether Section 213.070.2 preempts "claims that arise partially from an employment relationship, or does it preempt only claims that arise wholly from an employment relationship," and whether Section 213.070.2 preempts a claim between a supervisor and subordinate while away from the workplace and, if so, under what circumstances?
Additionally, Clark questioned if a claim arises out of an employment relationship if the conduct giving rise to it was for personal gratification, rather than work purposes, "if the plaintiff and individual defendant did not have a relationship other than one through work? And, relatedly, does the fact that the alleged wrongdoer acted in his personal capacity render a claim outside of the scope of the exclusive-remedy provision?"
While the Legislature chose the phrase "arising out of" an employment relationship, the legal significance of that choice isn't addressed by the statutory language or the state's appellate courts, Clark noted. Further, these facts and questions gave rise to the question of from whose employment relationship a claim has to arise from, "the claimant’s (e.g., Johnson’s employment relationship with Hertz), the alleged wrongdoer’s (e.g., Brooks’s employment relationship with Hertz), or either?"
"We are happy that the court granted plaintiff's motion to remand, a ruling that I believe is in line with previous trial court orders in analogous cases. We look forward to litigating the matter in the St. Louis City Circuit Court," said Clark's attorney, J. Clayton Schaeffer, of Weigl Law in St. Louis.
Hertz's attorney, Blake Armstrong of Husch Blackwell in St. Louis, did not immediately respond to a request for comment.
Brooks, who appeared pro se, was not immediately reached for comment.
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