A Surprising Holding by the Tennessee Supreme Court Regarding Workers

Miller & Martin PLLC Alerts | August 28, 2015

by Stacie Caraway

On Friday, the Tennessee Supreme Court held in Yardley v. Hospital Housekeeping Systems that applicants are not eligible as a matter of law to assert "failure to hire" claims based on even the admitted fact that the reason they were not hired was because the prospective employer was aware they had filed a workers' compensation claim against a prior employer.

Until Friday, most employers in Tennessee had assumed that having a prior workers' compensation claim put applicants in a protected class, just as having a current such claim protects current employees from retaliatory discharge. The Supreme Court found that because the Tennessee workers' compensation statute only protects those who already are engaged in the employee/employer relationship, applicants are not protected from "failure to hire retaliation."

The facts of this case involved a rather common scenario, in that the plaintiff/applicant's employer decided to outsource its housekeeping functions. The plaintiff was a housekeeper. She was actually on leave due to restrictions stemming from her on-the-job injury at the time the outsource company conducted interviews of all of the current housekeepers in order to determine if they were going to hire any of them or not. Regarding the plaintiff, the outsource company's President sent an email saying he did not want to hire her "unless they had to" because "she was already out on medical leave" and was "another workers' compensation claim waiting to happen."

Before Tennessee employers get too excited about this holding, however, two cautionary notes.

1.  Because the Supreme Court relied on the wording of Tennessee's workers' compensation statute to "get around" having to include applicants as part of those protected from "workers' comp retaliation," the Tennessee legislature may have "something to say" about this distinction in the form of an amendment to this statute (which was just overhauled in 2014) during their next session. Other states' laws expressly protect applicants in this context.

2.  The plaintiff in this case asserted claims under both the Tennessee Workers' Compensation Act and the Tennessee Disability Act (TDA), due to the outsource company's failure to hire her. So, before "getting too excited" about the "new found freedom" not to have to hire those who have been injured on the job with other employers, bear in mind that (a) asking about past on-the-job injuries and/or (b) then using this information as a basis not to hire an otherwise qualified applicant could still be actionable under the TDA (or the ADA).

Under the ADA, prospective employers are permitted to ask applicants medical questions at the post-offer, pre-employment stage of the application process. They also are permitted not to hire applicants based on their inability to perform the essential functions of the job in question (either with or without a reasonable accommodation) due to information revealed at the post-offer, pre-employment stage. (The TDA does not require disability accommodation but still prohibits discrimination on the basis of a disability. The plaintiff's TDA claim was dismissed in this case.)

Accordingly, it is still advisable only to ask about and use medical information which is related to the position for which the applicant has applied at the post-offer, pre-employment stage in order to avoid potential TDA and ADA failure to hire claims.

As always, should you have any questions regarding this new development in Tennessee law, please feel free to contact Stacie Caraway or any other member of our Labor & Employment Law Practice Group.

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