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Employment & Labor Law Blog Legal updates, news, and commentary from the attorneys of Baker Sterchi Cowden & Rice LLC

Missouri Supreme Court Holds That Requesting an Accommodation, Standing Alone, Is Not an Activity Opposing a Practice Prohibited by the MHRA

April 7, 2020 | Paul Venker and Teresa Hurla

On January 14, 2020, an issue of first impression was presented to the Missouri Supreme Court: whether an employee’s accommodation request is a protected activity under the Missouri Human Rights Act. In a display of sound statutory construction, the Missouri Supreme Court found that an employee’s request to her employer for a work accommodation, standing alone, is not a protected activity under the Missouri Human Rights Act, and that consequently, it cannot provide the basis for a retaliation claim under the MHRA.

The Court reversed the circuit court’s judgment in favor of an employee, Li Lin, ruling her accommodation request was insufficient to support a retaliation claim under the MHRA and she had therefore failed to submit a cognizable claim.

Plaintiff Dr. Lin was a medical researcher at Washington University in St. Louis. During her employment, Dr. Lin began experiencing chronic back pain and was diagnosed with two herniated discs. The University accommodated her requests more than once for a different position, due to her back pain. 

Dr. Ellis informed Dr. Lin that when the grant funding for her research project expired, her position would be eliminated.  After the grant funding ceased later that year, Dr. Ellis was unsuccessful in his efforts to find work for Dr. Lin in another University laboratory that would accommodate her back restrictions. She was let go. 

Dr. Lin filed a charge of discrimination with the Missouri Commission on Human Rights, claiming that both Dr. Ellis and the University discriminated and retaliated against her because she engaged in a protected activity – requesting an accommodation. She then sued both Dr. Ellis and the University.

At trial, a jury found in favor of Dr. Lin, but not as to Dr. Ellis. The University filed a post-trial motion for judgment notwithstanding the verdict. It argued, in part, that Dr. Lin’s sole claim submitted to the jury failed to state a claim under the MHRA because a request for an accommodation is not a protected activity under section 213.070. Therefore, the University asserted, such a request could not serve as the basis for a retaliation claim. The circuit court denied the motion and the University appealed.

The Eastern District Court of Appeals reversed the judgment against Washington University, and remanded the case for a new trial. Dr. Lin ultimately filed an Application to Transfer in the Missouri Supreme Court. 

The Supreme Court granted transfer, and Dr. Lin repeated there her argument that although a request for accommodation does not fall within the literal language of the section, the court should adopt the reasoning from federal courts, which have interpreted an analogous federal provision to provide a cause of action for such requests.

Acknowledging the issue was one of first impression, the Court rejected Dr. Lin’s argument, holding that it was constrained by the plain language in section 213.070, RSMo. A request for an accommodation, standing alone, is not among the protected activities described in either prong of section 213.070: 1) opposition to a practice prohibited by the MHRA; or, 2) filing of a complaint, testifying, assisting, or participating in any investigation, proceeding, or hearing conducted under the MHRA. The Court held that where the statute specifically listed a variety of protected activities, and a request for accommodation was not among them, it could not, in effect, add to the statute another activity that the legislature did not include.

Some concluding thoughts: First, the facts of this case had to have helped the University. As the Court recites, it accommodated Dr. Lin on more than one occasion without requiring her to obtain a physician’s statement about her ability to function.  Although that approach may pose a challenge to an employer, it is, at least early on, a better course most of the time and should be implemented if practicable. Second, focusing on a legal point, the Court held that Plaintiff did not plead anywhere in her charge of discrimination or in her circuit court pleadings that her requests for accommodation were “in opposition to any unlawful practice” by the University. Yet, as the Court observed, this was her attempted characterization on appeal. Thus, the Court, may have been telling the parties, perhaps largely because this was an issue of first impression, that it must take the pleadings at face value.  In an earlier time, such a statement may have signaled the Court’s willingness to entertain the issue again with different results. However, the facts of this case arose before the 2017 amendments to the MHRA, limiting its scope. And those amendments should operate to close that door. The fact that this opinion was issued “Per Curiam” may hint at a lack of unanimity here. 

Related Services: Employment & Labor

Attorneys: Paul Venker and Teresa Hurla

Sometimes You Just Can't Compete

April 3, 2020 | Noemi Donovan

A recent decision by the Missouri Court of Appeals, Southern District, demonstrates the importance of specifically crafted non-compete provisions in employment contracts. Missouri courts generally enforce non-compete provisions if they are reasonable in scope and duration, meaning they are enforced if they are no more restrictive than necessary to protect the legitimate interests of the employer. However, what is reasonable depends upon the facts of each case.

In MFA Oil Co. v. Martin, MFA Oil filed suit against its former employee Martin, claiming he violated a non-compete provision in his employment agreement. In May, 1999, Martin and MFA Oil entered into the employment agreement wherein Martin accepted a position as plant manager for MFA at its plant in Seymour, Missouri. The agreement, which identified Martin as a “MANAGER,” contained a non-compete provision that stated in part as follows:

For a period of three (3) years after MANAGER leaves the employ of MFA OIL, MANAGER agrees not to work for another company engaged in the sale of petroleum products within a thirty five (35) mile radius of the MFA OIL AB7 Seymour plant. For a period of three (3) years after MANAGER leaves the employ of MFA OIL, MANAGER agrees not to individually engage in the sale or delivery of petroleum products within a thirty-five (35) mile radius of the MFA OIL AB7 Seymour plant.

Martin held various positions with MFA at various locations in Missouri from 1999 through 2018. Although he was only employed at the MFA OIL AB7 Seymour plant for a year, all of his positions with MFA Oil were situated within 35 miles of the Seymour plant. After his tenure at the Seymour plant, MFA moved Martin to its plant in Hartville, Missouri, where he served as the plant manager. Martin remained as the Hartville plant manager for a short time and then became the plant manager at MFA’s plant in Mansfield, Missouri.   

Martin served as the Mansfield plant manager for the next 15 years.  Then, however, during a restructuring process at MFA, Martin lost his managerial title and became a “service tech.” Although he earned a similar wage as a service tech, he lost his eligibility for a manager bonus.   In addition, his interaction with customers was limited as a service tech to the time he set or picked up tanks.

A year later, Martin again assumed a managerial position with MFA at the Mansfield plant. He was not reinstated as the plant manager, but instead became the operations manager. MFA then moved Martin to Rogersville, Missouri, to serve as the operations manager at that location.

He worked in Rogersville for the next 20 months, then resigned. Two months after resigning from MFA, Martin organized a new business enterprise, Martin Propane LLC, to engage in retail propane sales. Martin Propane competed with MFA and had a large propane storage tank, plant, propane delivery truck and tank trailer located in Mansfield, Missouri. The storage tank and plant and “most, if not all, of” Martin Propane’s customers were within 35 miles of MFA’s Seymour plant.

MFA filed suit, asking the trial court to prohibit Martin from selling propane within 35 miles of the Seymour plant individually or with another company. The trial court granted injunctive relief to MFA Oil, enforcing the covenant not to compete according to its terms and entered judgment against Martin prohibiting him for three years from selling bulk propane within 35 miles of MFA’s Seymour plant.   It did, however, limit the phrase “petroleum products” to bulk propane not sold for recreational use.

On appeal, Martin argued that (1) the covenant as enforced was overbroad; (2) his acceptance of a demotion after 15 years as plant manager in Mansfield and subsequent placement in a different managerial position effectively nullified the Manager Agreement he had long ago executed, including the covenant not to compete; and (3) the covenant not to compete is a prohibited restraint of trade in violation of R.S.Mo. § 431.202.

The Court of Appeals rejected Martin’s argument that the covenant not to compete was overbroad. In so holding, it relied on prior Missouri cases holding that in appropriate circumstances, two and three year non-compete agreements for employees, sales representatives or office managers were reasonable. 

Further, the Court of Appeals affirmed the trial court’s judgment, stating that Martin agreed in the contract not to compete for three years after he “left the employ” of MFA. Martin did not argue that any of his early transfers to the other MFA locations or his employment as a service technician constituted a termination of his employment. He instead argued that the acceptance of the Mansfield operations manager position, some 17 years after he executed his original employment agreement, terminated that agreement. The Court of Appeals rejected this argument, stating that, because Martin was continuously employed by MFA, he agreed not to compete for a period of time after he “left the employ” of MFA and was a manager at the time of his resignation, the contract was in effect at the time of Martin’s resignation.

The Court of Appeals also rejected Martin’s claim that the covenant not to compete constitutes a restraint on trade in violation of R.S.Mo.  § 431.202 because the statute, by its terms, is limited to covenants “not to solicit, recruit, hire or otherwise interfere with the employment of one or more employees.” The covenant not to compete in Martin’s employment agreement did not promise to do any of those things and, therefore, it was not applicable.

Of particular interest in this opinion is that each of the places where Martin worked was located within 35 miles of MFA’s Seymour plant. However, for the majority of his employment with MFA, he was located in Hartville, Missouri, which is 23 miles away from Seymour. Despite this change in location, the Court of Appeals did not amend the terms of the non-compete to prohibit his actions within 35 miles of Hartville. Instead, the court strictly enforced the terms of the contract as written and held that Martin could not engage in the prohibited activities within the proscribed distance from the Seymour plant, a location at which he had not been employed since 2000. 

This opinion serves as a reminder that when crafting non-compete provisions, employers and employees alike should be careful regarding its terms, including how they define the geographical area where competition is prohibited and under what circumstances the agreement is terminated. While defendant Martin had not been employed in Seymour for almost 18 years and had not been a plant manager for nearly two years, the Court of Appeals nevertheless interpreted the contract strictly according to its terms. This case also serves as the most recent reminder to prospective employers that when recruiting a manager or sales representative who has previously worked in the same industry, in the same geographic area, attention must be paid as to whether there is a noncompete agreement that may preclude his competing with his former employer.

For a discussion of Missouri Supreme Court case law governing the enforceability of noncompete agreements, see our earlier blog post on the Supreme Court’s Copeland and Kennebrew decisions. 

Related Services: Employment & Labor

Attorneys: Noemi Donovan

Small Business Covid-19 Primer

April 1, 2020 | Bryan Mouber

Covid-19 has caused stress for both business owners and employees. In the past days, I’ve fielded calls from clients who need a general legal lay of the land before asking more specific questions.

Two new benefits are in effect from April 1, 2020 through December 31, 2020: emergency paid sick leave (EPSL) and paid FMLA leave (FMLA+). Both were part of the Families First Coronavirus Response Act.  There is a flyer to post starting April 1, 2020, available to print on the DOL website here.

An employee is entitled to FMLRA+ or EPSL leave if he/she is:

  1. subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
  2. advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. caring for an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  5. caring for a child whose school or daycare is closed due to COVID-19; or
  6. experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.

Generally, an employer with 50-499 employees must provide:

  • 2 weeks of 100% paid leave (for reasons 1-3),
  • 2 weeks of 2/3 paid leave (for reasons 4, 6)
  • 10 weeks of 2/3 paid leave (for reason 5).
  • 12 weeks of total leave.

None of this leave applies during this government mandated shutdown or for as long as the business is closed due to lack of business.  None of this applies if the business has employees work reduced hours.  Employees whose hours have been reduced may be entitled to file for unemployment benefits, and the employer must tell the employee he/she is entitled to unemployment.

There are additional benefits for the employer as well.

The Paycheck Protection Program is a new SBA loan/grant program, which has a maximum loan amount of 2.5 times your average monthly payroll.  It is forgiven if the employer can document that all loan proceeds were used in the 8 weeks after receiving the loan for payroll, rent, utilities, and healthcare expenses.  The employer must keep the average payroll and average number of employees, or the loan must be repaid.  For example, if you reduce payroll by 25%, then 25% of the loan must be repaid.

If the employer rehires employees that were previously laid off at the beginning of the period, or restores any decreases in wage or salary that were made at the beginning of the period, the employer will not be penalized for having a reduction in employees or wages, as long as this has been done by June 30, 2020. The SBA has not finalized its regulations on the forgiveness.  The Treasury Secretary announced the SBA will have a plan in place by Friday April 3, 2020.

Employers may also apply for an SBA disaster relief loan with a $10,000 advance option (once the SBA updates its forms).  Keep in mind, the employer can't list the same expenses on the Paycheck Protection Program and the Disaster Relief Loan--so if you apply for disaster relief for payroll, you can't later get a Paycheck Protection Program loan for payroll.

Finally, there is a new Kansas City-area small business relief loan fund, maxing out at a $100,000 loan for businesses with fewer than 20 full-time employees and $2.5 million or less in annual revenue that are located in Jackson, Clay, Platte, or Cass counties in Missouri or Wyandotte, Johnson, or Leavenworth counties in Kansas. Businesses may apply here.  

Finally, if the employer must pay FMLA+ or EPSL benefits, the employer will receive a tax credit against payroll taxes.  The credit is also refundable. KPMG created a good bulletin on the specifics, which you can view here.

Provided certain conditions are met, businesses with fewer than 50 employees can exempt themselves from paying benefits for reason 5--when a worker is staying home to care for a child, because the school/daycare is closed.  You may claim this exemption if an authorized officer of the business has determined that:

  1. The provision of paid sick leave or expanded family and medical leave would result in financial obligations exceeding available business revenues and cause you to cease operating at a minimal capacity;  
  2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or  
  3. There are not sufficient workers who are able, willing, and qualified to work as needed for the small business to operate at a minimal capacity.

There is no exemption for reasons 1, 2, 3, 4, and 6, above --if one of your workers is actually sick, quarantined, or caring for a person in quarantine.

Finally, businesses in Kansas should keep in mind that their local disaster relief declaration has been superseded by the Kansas Governor’s Executive Order 20-16, which took effect March 30, 2020 and expires April 19, 2020.

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About Employment & Labor Law Blog

The BSCR Employment & Labor Law Blog examines topics and developments of interest to employers, Human Resources professionals, and others with an interest in recent legal developments concerning the workplace. This blog will focus on Missouri, Illinois and Kansas law, and on major developments under federal law, and at the EEOC and NLRB.  Learn more about the editor, David M. Eisenberg, and our Employment & Labor  practice.

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