Tennessee Supreme Court: Employer May Deny Employment Based on Workers’ Compensation Claims

On August 21, the Supreme Court of Tennessee issued a ruling that analyzed whether a job applicant has the right to sue an employer for denying employment based on a past or future workers’ compensation claim.

Facts The plaintiff, a long-time employee working as a housekeeping aide in a hospital, was injured while working in 2010 and received workers’ compensation benefits. In 2012, the hospital the plaintiff worked in entered into a contract with a cleaning company who in turn evaluated current hospital staff to determine if they should be hired to continue on in their current positions. During this time, the plaintiff was not interviewed or hired for a position, but requested a return to work in the housekeeping department. However, she was allegedly told by the cleaning company that they did not hire individuals who had received workers’ compensation benefits. Further, the Vice President of the cleaning company allegedly wrote in an e-mail that “[b]ringing her on board with [the Company] would seem to be a Workers[’] Comp claim waiting to happen.” Following this incident, the plaintiff sued the cleaning company. Ruling In a case of first impression, the Supreme Court decided that the Tennessee Workers’ Compensation Act does not provide a job applicant with a cause of action against a potential employer who failed to hire the job applicant based on a past or potential future workers’ compensation claim. A key factor in the court’s ruling was the fact that the plaintiff was a job applicant – not an employee. For example, the plaintiff argued she should be able to assert a claim for workers’ compensation retaliatory discharge. However, the Court determined that past case precedent did not apply to the current case as they involved employee-employer relationships. Since the plaintiff was not an employee of the new cleaning company, there was no employment relationship. Thus, the Court found that a “failure to hire cannot be equated with termination of employment, as employees and job applicants are on different footing.” The Court also refused to create an exception to Tennessee’s employment-at-will doctrine and held that “employers should have the freedom to choose their employees.” Analysis This case highlights an interesting topic that is not discussed often in the background screening context. However, employers should be wary of relying on this opinion to justify their hiring practices as it relates to consideration of an individual’s workers’ compensation history during the recruitment process. From a federal perspective, the Equal Employment Opportunity Commission (EEOC) has published guidance on the subject, analyzing workers’ compensation claims in the context of the Americans with Disabilities Act (ADA). In this guidance, the EEOC advises that an employer may only ask questions about an applicant’s prior workers’ compensation claims or occupational injuries after it has made a conditional offer of employment, but before employment has begun, as long as it asks the same questions of all entering employees in the same job category. Likewise, an employer cannot obtain any information about an applicant’s prior workers’ compensation claims or occupational injuries from any source before a conditional offer has been extended. Further, an employer may not refuse to hire an individual with a disability simply because it assumes that he/she poses some increased risk of occupational injury and increased workers’ compensation costs unless the employment poses a “direct threat”. This is a certainly a complex area, and employers should engage qualified legal counsel to determine if conducting a workers’ compensation check as part of their background screening policy is appropriate for their purposes.