Tennessee Retaliatory Discharge Claims Against Employers

Tennessee has a statute that protects employees from employers who terminate an employee in retaliation for reporting illegal activities. This statute is found in T.C.A. § 50-1-304 and is called the Tennessee “Retaliatory Discharge” statute.  The design of the statute is to protect employees from being terminated solely for opposing or speaking up about illegal activities at the employer.  It is a whistleblower protection statute that is important to protect employees who have the courage to speak up about illegal activities.

The most important sections of this statute are found which describe the intent and purpose of the statute are found in subsection (b), (c) and (f) as follows:

(b) No employee shall be discharged or terminated solely for refusing to participate in, or for refusing to remain silent about, illegal activities.

(c)(1) Any employee terminated in violation of subsection (b) shall have a cause of action against the employer for retaliatory discharge and any other damages to which the employee may be entitled, subject to the limitations set out in § 4-21-313.

(2) Any employee terminated in violation of subsection (b) solely for refusing to participate in, or for refusing to remain silent about, illegal activities who prevails in a cause of action against an employer for retaliatory discharge for the actions shall be entitled to recover reasonable attorney fees and costs.

……….

 (f) In any civil cause of action for retaliatory discharge brought pursuant to this section, or in any civil cause of action alleging retaliation for refusing to participate in or remain silent about illegal activities, the plaintiff shall have the burden of establishing a prima facie case of retaliatory discharge. If the plaintiff satisfies this burden, the burden shall then be on the defendant to produce evidence that one (1) or more legitimate, nondiscriminatory reasons existed for the plaintiff's discharge. The burden on the defendant is one of production and not persuasion. If the defendant produces such evidence, the presumption of discrimination raised by the plaintiff's prima facie case is rebutted, and the burden shifts to the plaintiff to demonstrate that the reason given by the defendant was not the true reason for the plaintiff's discharge and that the stated reason was a pretext for unlawful retaliation. The foregoing allocations of burdens of proof shall apply at all stages of the proceedings, including motions for summary judgment. The plaintiff at all times retains the burden of persuading the trier of fact that the plaintiff has been the victim of unlawful retaliation.

One of the key terms in this statute that is essential to understand in order to figure out the purpose of this statute is “illegal activities”.  This is defined in the statute as:

(3) “Illegal activities” means activities that are in violation of the criminal or civil code of this state or the United States or any regulation intended to protect the public health, safety or welfare.

Damages for a retaliatory discharge claim are limited by the caps on damages for certain sizes of employer as outlined in T.C.A. § 4-21-313. These are the same caps that in place for Tennessee Sexual Harassment or Tennessee Human Rights Act violations. I have previously blogged on these caps here.

One of the key terms in this statute is that no employee shall be discharged or terminated “solely” for refusing to participate in or remain silent about illegal activities. The term “solely” is a very significant term which requires this to be the sole basis for the termination.  Frankly, this term can prevent very legitimate improper terminations from being actionable under this statute and the legislator show fix this to make it a “primarily caused by” standard.

It is also important to note that any claim in Tennessee brought for retaliatory discharge in this context must be brought under this statute.  Subsection (g) provides as follows:

(g) This section abrogates and supersedes the common law with respect to any claim that could have been brought under this section.

This portion of the statute supersedes the previous “common law” retaliatory discharge claim, which did not require that the “sole reason” of the termination be for the refusal to participate in or refusal to remain silent about illegal activities. As a result, this is a much higher standard with this new statute, when compared to the prior common law cause of action.  The common law cause of action no longer exists in Tennessee.