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Mar 11, 2020

Employees Aggrieved Out-of-State Cannot Sue Missouri-based Employers under the Missouri Human Rights Act.

ABSTRACT: Missouri Supreme Court held the Missouri Human Rights Act is not a remedy for out-of-state employees aggrieved by discriminatory practices of Missouri-headquartered companies.

On December 24, 2019, the Supreme Court of Missouri issued two opinions concerning claims brought by employees working outside Missouri against their Missouri-headquartered employers for age discrimination.  The Court held the Missouri Human Rights Act (MHRA) did not apply to either employee. Specifically, the Court held the express language of the MHRA coupled with the presumption against extraterritorial application of laws precluded the Supreme Court from applying the MHRA to claims in either case.

First, in Tuttle v. Dobbs Tire & Auto Ctrs., Inc., the Court held the MHRA cannot be applied to claims of an employee who is aggrieved by alleged acts outside Missouri even when the employer is headquartered in Missouri. 

The case was initiated when Dwight Tuttle filed claims for relief under the Missouri Human Rights Act (MHRA) for age discrimination and retaliation against his former employer Dobbs Tire & Auto Centers, Inc., David Dobbs (its president and CEO), and Dustin Dobbs (its director of retail operations). The company operated tire and auto stores in both Missouri and Illinois and employed Tuttle for 28 years in Illinois. Tuttle alleged several acts of age discrimination over a period of three years:

1.       Dustin Dobbs informed Tuttle he would never receive another raise during his employment with Dobbs Tire;

2.       Dobbs Tire transferred a number of illegitimate expenses to the Shiloh store, which distorted the profit numbers of the Shiloh store, and reflected poorly on Tuttle's managerial abilities;

3.       Dobbs Tire transferred Tuttle to its Fairview Heights, Illinois store which had a history of lower sales volume than the Shiloh store;

4.       Tuttle was forced to sign a document accepting his transfer to the Fairview Heights store that also stated Tuttle could be terminated if the Fairview Heights store did not improve its performance;

5.       Younger store managers did not have to sign a similar document when they were transferred to other stores; and

6.       After the profit and loss statement for the Fairview Heights store had been completed for 2016, Tuttle's regional manager told him, "I hope you have your resume out and are looking for another job."

For these reasons, Tuttle considered himself constructively discharged and tendered his resignation.

The Court held that MHRA-prohibited discriminatory practices alone are insufficient to bring a claim. Rather, the practices must result in an adverse impact in Missouri. Tuttle did not dispute that the injuries he alleged occurred in Illinois, those being wage loss, loss of employment benefits, and mental anguish arising from constructive discharge from his Illinois job. In addition, Tuttle’s petition suffered a procedural failure.  Because Missouri is a fact-pleading state, Tuttle may have received a different judgment had he included exactly where each alleged discriminatory action took place showing even one adverse impact that occurred in Missouri. As it was, Tuttle merely alleged, “some of the decisions and actions … took place in Missouri,” which left the Court to divine Tuttle’s logic. The Court rejected Tuttle’s reasoning that because Dobbs was headquartered in Missouri, the decision-making underlying the discriminatory acts took place in Missouri, which invoked application of the MHRA. The Court held it is the claimant being aggrieved by the prohibited practice that gives rise to the cause of action under the MHRA, not the underlying decision.

Dobbs filed a Motion to Dismiss Tuttle’s claims because the petition failed to state a claim upon which relief could be granted on the basis that the MHRA does not apply to an Illinois employee who faced alleged discriminatory acts in Illinois. The circuit court dismissed Tuttle’s petition with prejudice but did not provide justification for the dismissal. Tuttle appealed the circuit court’s dismissal and the court of appeals affirmed the lower court’s judgment in an unpublished memorandum. The Supreme Court of Missouri granted transfer of the case and, like the court of appeals, affirmed the circuit court’s dismissal. 

Second, in State ex rel. Anheuser-Busch, LLC v. Moriarty, Iowa resident and employee John Esser alleged Anheuser-Busch (AB) discriminated against him on the basis of age, over a period of several years. Like Tuttle, Esser had been with the Missouri-based company for more than 25 years. Unlike Tuttle, however, Esser included Missouri-specific discriminatory acts of AB in his first amended petition. Of those, Esser alleged AB decision-makers in St. Louis gave Esser lower performance reviews and made ageist comments during a number of in-person meetings in Missouri. 

As Dobbs did at the circuit court level, AB filed a motion to dismiss Esser’s claims because Esser failed to state a claim upon which relief could be granted because he was not a Missouri employee. The circuit court overruled AB’s motion to dismiss noting that while Missouri recognizes the presumption against extraterritorial application of laws, “the acts alleged did not occur wholly outside of Missouri.” The court of appeals denied writ relief at which time AB sought a writ of prohibition from the Supreme Court of Missouri that would direct the circuit court to vacate the part of its order that overruled AB’s motion to dismiss. The Supreme Court issued a preliminary writ of prohibition. It was on review of this writ that the Supreme Court analyzed and compared the claims of Tuttle and Esser. In Moriarty, the Court held Esser’s claims suffered from the same weakness in that the adverse impacts all occurred outside the state of Missouri. The Court reasoned that the lower performance reviews affected his job in Iowa and that, like Tuttle, Esser’s wage losses, loss of employment benefits, and emotional distress occurred because of actions and demotions related to his job in Iowa.

The Tuttle and Anheuser-Busch decisions make it clear that out-of-state employees who work for Missouri-based companies may not engage in forum-shopping when asserting claims under state anti-discrimination laws.  Missouri-based employers will not be liable under the MHRA for practices that affect employees outside Missouri.