No Individual Liability For Supervisors, Law Court Finds

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[author: James R. Erwin]

In a much-anticipated decision issued today (December 11, 2012), the Maine Supreme Judicial Court (the Law Court) has held that supervisors cannot be held individually liable under the Maine Human Rights Act (MHRA) or the Maine Whistleblowers Protection Act (MWPA).  By the narrowest of margins, the Law Court’s 4-3 decision in the case of Fuhrmann v. Staples finally resolves the question of supervisor liability after over a decade of uncertainty for employers following the Court’s 2000 decision in Gordan v. Cummings, in which it initially found supervisor liability but shortly thereafter withdrew its decision.

The plaintiff in Fuhrmann worked in Staples’ South Portland and Biddeford stores for over eight years until she resigned in 2008.  She alleged that within a few months after she reported discovering that someone had miscoded furniture in a way that she believed could constitute tax fraud, her schedule was changed in a way that made it impossible for her to continue to work.  She sued Staples and five individual supervisors.  The Superior Court granted summary judgment for Staples on the whistleblower claim, and also held that she could not sue the supervisors because neither the MWPA nor the MHRA (which established the procedure under whistleblower claims are brought to court) creates individual liability for supervisors. 

When the plaintiff appealed the decision, a group of Maine business and trade associations enlisted Pierce Atwood to file a brief on their behalf as amicus curiae (friends of the court) in support of Staples’ position that the individual supervisors could not be liable under the MWPA or MHRA.  The decision turned on the interpretation of the (somewhat different) definitions of “employer” in each statute.  The majority found the definitions ambiguous and thus also looked at the whole statutory scheme to resolve the question.  The Court concluded that making employers, and not their supervisory employees, legally responsible for preventing and correcting workplace discrimination  would better serve the legislative intent underlying the two statutes.

This result is a very important victory for employers, who as we argued in our amicus brief would have faced a very different workplace dynamic if their supervisors had to concern themselves with avoiding personal liability. For example, the natural temptation for supervisors would be to hold protected class employees to different standards for performance reviews or disciplinary situations in order to protect themselves from claims.  Further, the effect of this dynamic would be to make Maine employers less competitive by incentivizing supervisors to avoid merit-based decisions, and by adding to the overall cost of employment (such as increased insurance premiums for coverage for employment claims).

While the Law Court held for Staples (and all employers) on the individual liability issue, it reversed the summary judgment for Staples and sent the case back for trial, finding that there were issues of fact about whether the report about the furniture played a part in Staples’ decision to change her schedule, which she claims forced her to resign.  This result is yet another indication from the Law Court that it does not favor the grant of summary judgment for employers.   That issue is beyond the scope of this Alert, but we will be addressing it in due course.

We will discuss this case at our December breakfast program, which is this Thursday (December 13) at 8:00 at our Portland office, and also available remotely.  Details are available on our website.  If you have questions or need further information about the import of this decision for your organization, please contact Jim Erwin or Katy Rand.

Pierce Atwood was pleased to advocate on behalf of the Maine State Chamber of Commerce, Portland Regional Chamber of Commerce, National Federal of Independent Business, Associated Builders and Contractors of Maine, Maine Innkeepers Association, Maine Restaurant Association, Maine Motor Transport Association, Maine Merchants Association, and Maine Grocers’ Association.