Denise Reid Hoggard represents Rhonda Calaway, the plaintiff in a sexual harrassment and retailiation lawsuit that resulted in a new legal precedent.
The case of Rhonda Calaway vs. Practice Management Services Inc. and Richard Johns M.D. may sound like an isolated complaint of sexual discrimination, but it has resulted in a legal ruling that some business interests in Arkansas have tried to undo.
Here is the issue in a nutshell:
Federal and state law both clearly hold corporations rather than individual supervisors liable for discrimination in the workplace. Federal law also holds the business rather than the individual liable for retaliating against employees who complain about discrimination.
But until the Calaway case, it was unclear whether the Arkansas Civil Rights Act similarly exempted individual supervisors from liability for retaliation.
Calaway, a registered nurse who worked for Dr. Johns at PMSI for about six months in 2007, sued both the physicians’ group and Johns personally for sexual discrimination and for retaliating when she complained.
Her lawsuit was originally filed in federal court in Little Rock in January 2009. Because there was a question as to whether Johns could be held personally liable for retaliating against Calaway under state statute, the federal court sent the question to the Arkansas Supreme Court to resolve.
The Supreme Court was not obligated to answer the “certified question” from federal court, but it chose to do so.
“The certified question is: Can an individual supervisor be held personally liable for alleged acts of retaliation prohibited under … the anti-retaliation provision of the Arkansas Civil Rights Act (ACRA)?” In the court’s opinion delivered in November 2010, Chief Justice Jim Hannah wrote, “We answer in the affirmative.”
To the Arkansas Supreme Court, the answer boiled down to this: The Arkansas Civil Rights Act prohibits retaliation by any “person,” and the plain meaning of that term includes human beings as well as corporations.
“Accordingly,” Hannah wrote, “an individual supervisor can be held personally liable for alleged acts of retaliation” prohibited by the ACRA.
Denise Reid Hoggard, Calaway’s Little Rock attorney who won the point, said the question of individual liability for retaliation had been so unsettled that she had personally argued it both ways depending on the best interest of a particular client. But the state Supreme Court’s opinion removed all doubt.
It also opened up an entirely new class of defendants: Individual supervisors who aren’t personally liable for sexual discrimination but who may be liable for retaliation against a subordinate who complains.
This sent the Society of Human Resources Managers into offensive mode. In the Arkansas General Assembly’s regular legislative session of 2011, Rep. Linda Tyler, D-Conway, introduced a bill drafted for SHRM by Little Rock attorney Russell Gunter that would amend the ACRA’s anti-retaliation language to make it line up with federal law.
In other words, it would remove any personal liability for prohibited retaliation by a supervisor, leaving only the corporate entity responsible.
Bill Dies in Committee
The bill died in the House Judiciary Committee. Gunter said he wasn’t sure whether another attempt to amend the law would be made in the 2013 session, although there are still HR groups who are concerned about the issue.
“The employer is still going to be liable for discrimination and retaliation,” Gunter told Arkansas Business last week. “But sometimes plaintiffs’ attorneys will add individual supervisors, which increases the cost of litigation, which increases the chance of settlement, which is what a lot of plaintiffs’ attorneys would like to do.”
Hoggard, naturally, sees it differently.
“There’s a challenge, a legislative attempt, to take away the right that workers have to hold a boss accountable for retaliatory acts,” she said. “When you interfere with someone’s right to file a complaint – that’s a protected act – there ought to be consequences for your conduct.”
Tre’ Kitchens, president of the Arkansas Trial Lawyers Association, who successfully argued against SHRM’s bill before the House committee, said companies can discharge legal damages in bankruptcy, while individuals cannot.
“And a lot of these business entities don’t really have many assets, and that’s by design as well,” he said. “And the corporate shell game to make sure that you aren’t able to collect judgments is something, unfortunately, that I’m really familiar with.”
But Gunter said business owners aren’t generally accused of retaliation.
“Usually the individual is a first-line supervisor who wouldn’t have any assets anyway,” he said.
Although the Calaway ruling has created more potential defendants in retaliation cases, Gunter said it has not opened the floodgates.
We have some lawsuits where individual supervisors have been named, so there are some cases where they are taking advantage of that, and some cases are only in the company’s name,” he said. “I don’t see a real concerted effort by the plaintiffs’ lawyers to do this.”
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