House Should Not Abdicate Its Responsibilities on SB 43

Last week’s column focused on the discrimination aspects of Senate Bill 43. Among other things, this legislation (1) weakens our current zero tolerance standard against discrimination on the basis of religion, age, gender, race, or nationality; (2) provides civil immunity for supervisors who discriminate or sexually harass their workers; and (3) eliminates pro-life protections in Missouri law that protect employees against pressure to have or participate in an abortion.

As if to prove the opponents’ point, SB 43 specifically mentions cases that proponents claim were bad cases. In McBryde v. Ritenour207 S.W.3d 162 (Mo. App. E.D.), a high school basketball coach was fired for which his white counter-part received only a verbal reprimand. In his termination letter, McBryde’s supervisor said he had a tattoo that was a sign of gang-affiliation. Actually, McBryde’s tattoo was a Star of David he had inked while playing professional basketball in Israel.

Another case abrogated by SB 43 is Daugherty v. Maryland Heights231 S.W.3d 814 (Mo. 2007). In this case, Doug Daugherty was a 59 year-old police captain and a 16 year veteran of the City’s police department. After Daugherty learned of his termination, he met with his supervisor, the police chief (who also happened to be his brother-in-law). He taped the conversation, recording the chief stating that “the city administrator wanted to get rid of employees over the age of 55 because their salaries were costly to the City.” Daugherty said he thought this was age discrimination, and the Chief agreed.

Should Daugherty have a claim? Like McBryde, his case is specifically mentioned in SB 43 as creating bad law.

As if this were not enough, SB 43 also eliminates protections for whistle-blowers who refuse to break the law or report illegal activities of government or private businesses to the proper authorities. The genesis for this portion of the bill is a case called Dunn v. Enterprise, 170 S.W.3d 1 (Mo. App. E.D. 2001). The plaintiff Dunn was the corporate comptroller for Enterprise with an excellent performance record. As comptroller, it was his job to certify that the company’s financial records were prepared in accordance with Generally Accepted Accounting Principles (GAAP).

In May 1998, Enterprise began preparing to become a publicly traded company for an IPO. As a part of that process, Dunn began to take a closer look at Enterprise’s financial statements and business practices. He discovered that some accounting measures which were acceptable for a private company would violate GAAP for a publicly-traded company. In June 1999, outside investment bankers advising Enterprise agreed with Dunn’s concerns. Soon after, Dunn was placed on probation and told he could stay with the company “as long as he behaved.” Dunn continued to encourage Enterprise to follow GAAP requirements in its IPO. In December 2000, the outside advisor again agreed with Dunn. On January 4, 2011, Dunn was fired. Enterprise ultimately postponed its IPO – avoiding violating the law in the way Dunn feared.

Should Dunn’s insistence that his employer not violate public securities laws designed to protect the honesty of our financial markets be protected under Missouri law? I think most reasonable people believe it should be protected. However, Senate Bill 43 would ensure that future Dunns have no legal recourse. It specifically excludes supervisors, managers, and executives from legal protection: the very persons most likely to know about and be able to stop illegal activity.

The bill also eliminates punitive damages for these cases, and, like the discrimination section, it states that it is the “exclusive remedy” for “any and all claims of unlawful employment practices.” By doing so, SB 43 would eliminate statutory protections for state employees in §105.055 that prohibit state employee supervisors from punishing, in any fashion, a state employee who discloses information the employee reasonably believes evidence a violation of law, rule, or regulation, mismanagement, gross waste of funds, abuse of authority, or substantial and specific danger to public health or safety. The current law also prohibits supervisors from prohibiting state employees from discussing the agency’s operations with legislators, the state auditor or attorney general.

Senate Bill 43 will likely come up for debate next week. While I believe it should be rejected completely, that likely will not happen. At the very least, the provisions eliminating pro-life protections, state employee protections, and ordinary contract claims should be taken out of the bill. Details matter. If the House refuses to fix clear drafting problems with the bill after it came out of the Senate, the House will be abdicating its responsibilities as a co-equal chamber in the General Assembly.

Budget Reconciliation Process Looms

 The General Assembly has very few responsibilities that it must accomplish every year. Passing a balanced budget is one of them. This week, the Senate Budget Committee worked its way through Missouri’s $27 billion budget. The focus next week on the Senate floor will likely be the state budget, and it appears there will be several significant areas of disagreement that will have to be worked out in a conference committee.