Law

Piercing the Corporate Veil in Tennessee – When Can a Judgment Against a Corporation be the Personal Responsibility of the Shareholders?

The Tennessee Court of Appeals recently decided a case (F&M Marketing Services, Inc. v. Christenberry Trucking and Farm, Inc., E2016-00205-COA-R3-CV, 2017 WL 417223_(Tenn. Ct. App. 2017)) involving a request to pierce the corporate veil of a Defendant after the Plaintiff got a substantial judgment against that Defendant for breach of contract. The total judgment in this case was $375,524.29. After the initial judgment was entered, the Plaintiff learned that the Defendant had no assets to satisfy the judgment. As a result, the Plaintiff petitioned the trial to hold the primary shareholder of the Defendant personally liable for the judgment against the Defendant corporation. The Tennessee Court of Appeals did a good job discussing the circumstances when an individual shareholder can be found personally responsible for a judgment against a corporation in Tennessee.

The Court noted that the most important case outlining when it is appropriate to pierce the corporate veil in Tennessee is the FDIC v. Allen, 584 F. Supp. 386 (E.D. Tenn. 1984) decision.

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READ THE REST OF THIS POST AT TENNESSEE DEFENSE LITIGATION HERE

insurancedefense

Does Employer’s Admission of Vicarious Liability for Actions of Employee Insulate the Employer from Other Causes of Action?

The Tennessee Court of Appeals recently dealt with an issue that has not been previously discussed by Tennessee Appellate courts in Melanie Jones, Individually and on behalf of Matthew H. V. Shavonna Rachelle Windham, et al., No. W2015-00973-COA-R10-CV, 2016 WL 943722 (Tenn. Ct. App. 2016).  The question deal with the situation where an employer and employee are both sued due to the actions of the employee in causing an automobile accident (while working for the employer).  The employer, in the Answer to Complaint, admitted they were vicariously liable for the actions of the employee.  The question, therefore, was whether the plaintiff could still proceed with other claims against the employer including negligent hiring, negligent retention and negligence per se for their own independent negligent actions when they had already admitted vicarious liability for the actual accident.

For some reason, the plaintiff wanted to pursue various individual cause of actions directly against the employer in this case.

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Law

Tennessee Court of Appeals Confirms Forum Selection Clauses are Enforceable in Tennessee Contracts

The Tennessee Court of Appeals recently discussed forum selection clauses found in contracts.  These are clauses that select the jurisdiction and court that will handle any disputes involving the contract.  The case of The Cohn Law Firm v. YP Southeast Advertising & Publishing, LLC, 2015 WL 3883242 (Tenn. Ct. App. 2015) involved a dispute between a plaintiff attorney law firm and an advertising company.  The plaintiff’s attorney sued the advertising company in Shelby County Chancery Court over the dispute.  The defendant advertising company filed a Motion to Dismiss alleging that this jurisdiction was inappropriate due to a forum selection clause in the contract.  The contract between the plaintiff’s attorney law firm and the defendant provided that any lawsuit pertaining to the agreement should only be filed in the United States District Court for the Northern District of Georgia or the Superior Court of Dekalb County, Georgia. (The Cohn Law Firm at 2).  This contract was signed by the plaintiff attorney.

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READ THE REST OF THIS POST AT TENNESSEE DEFENSE LITIGATION HERE

employmentlaw

What Kinds of Social Media Posts Provide a Legitimate Basis for Termination?

The National Labor Relations Board (NLRB) gives employees the right to engage in protected, concerted activity and discuss the terms and conditions of their employment. This, however, is not a free pass for all types of communication. In Richmond District Neighborhood Center, Case No. 20-CA-091748 the NLRB determined there were some postings in social media that were so egregious as to lose the protection afforded above-referenced.

In Richmond District Neighborhood Center the employer runs afterschool programs at a high school. Two workers had discussions which were perceived to be insubordinate. In essence, these employees discussed on Facebook how they would ignore the employer’s rules. The NLRB determined these threats justified termination and were not protected types of communication in social media.

Conversely, the NLRB found that “likes” can be protected under the theory of a “concerted activity.” In 2014, the NLRB ruled that Triple Play Sports Bar and Grill fired individuals inappropriately. In this matter a former Triple Play employees posted negative comments about the employer on a Facebook page and a current employee “liked” the post. When that employee returned to work the employee was terminated immediately based upon the “like” of the comment. The NLRB found this was not appropriate. The NLRB found the company’s anti-blogging policy was aimed at stopping employees from saying anything negative about the company online and, therefore, was an effort to chill protected, “concerted activity.”

Further, in a NLRB advice memorandum pertaining to Skin Smart Dermatology a question arose as to whether or not the employer violated Section 8(a)(1) of the Act when the employer discharged the charging party for comments made in a private Facebook group message. In this matter the NLRB concluded the charging party was not engaged in a protected concerted activity when she posted comments to the Facebook group message. In this matter the communication was not considered a concerted activity but, instead, was not a concerted activity as it did not involve shared employee concerns over terms and conditions of employment. Rather, the post was associated with personal issues the particular employee had with the employer.

businesslitigation

Tennessee Whistleblower Claim Requires Reporting Illegal Conduct to Other Than Wrongdoer

Recently in Haynes v. Formac Stables, Inc., Judge Wade authored a Tennessee Supreme Court opinion which dismissed a retaliatory discharge case brought pursuant to both common law and the Tennessee Public Protection Act. The Complaint alleged the owner of the business had engaged in illegal conduct and had terminated the employee when he acted as a whistleblower by complaining of conduct to the owner. The Trial Court dismissed the plaintiff’s claim, because according to the employee’s own allegations, he had not reported the illegal activity to anyone other than the person responsible for the activity.

 It was determined on appeal that an employee must report an employer’s wrongdoing to someone other than the wrongdoer to qualify as a whistleblower claim. There is a requirement of reporting to an outside entity or individual when the wrongdoer is the manager, owner or highest ranking officer within the company. The decision of the Appellate Court was affirmed.

insurancedefense

Tennessee’s One Year Personal Injury Statute of Limitations Extended to Two Years when Criminal Charges are Brought

The 2015 Tennessee legislature passed Public Chapter No. 388 that extends the typical one year statute of limitation for personal injury causes of action (as well as other cause of actions) in certain situations.  This new law went into effect for all causes of action that accrue on or after July 1, 2015.   This statute basically extends the typical one year statute of limitations for cases involving personal injury, libel, false imprisonment, malicious prosecution and compensatory or punitive damage claims under Federal Civil Rights statutes.  In order to take advantage of the two year statute of limitations extension, a criminal charge must be brought pertaining to the incident in question within one year of the incident by (1) a law enforcement officer; (2) a District Attorney General; or (3) a grand jury.

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READ THE REST OF THIS POST AT TENNESSEE DEFENSE LITIGATION HERE

employmentlaw

The Tennessee Supreme Court Determines There is No Cause of Action for Purported Retaliatory Failure to Hire Due to Prior Workers Compensation Claim.

In Kighwaunda V. Yardley v. Hospital Housekeeping Systems, LCC, the Tennessee Supreme Court determined there was not a viable cause of action in Tennessee for retaliatory failure to hire due to a prior workers compensation claim.  There has, however, long been a cause of action for retaliatory discharge for asserting a work injury.  To be successful with a cause of action of this type the employee must establish numerous elements including:

1. The plaintiff was an employee of the defendant at the time of the injury;
2. The plaintiff made a claim against the defendant for workers’ compensation benefits;
3. The defendant terminated plaintiff’s employment; and
4. The claim for workers’ compensation benefits was a substantial factor in defendant’s motivation to terminate the plaintiff.

The Supreme Court, however, held there is a fundamental difference between discharging an employee as a result of a work-related injury and refusing to hire a job applicant because they previously filed for workers’ compensation benefits.  In this case, the claimant had a work-related injury but was ultimately released to perform full duty work and applied for a job with Hospital Housekeeping Systems but was not hired, at least in part, due to the fact she previously filed a workers’ compensation claim.  The claimant sued Hospital Housekeeping Systems in Federal District Court raising a number of claims one of which was the company failed to hire her because she had a previous workers’ compensation claim which gave rise to a cause of action for a “retaliatory failure to hire.”  The claimant recognized this cause of action had not previously been recognized in Tennessee.  The Federal District Court requested the Tennessee Supreme Court to consider whether or not there should be a cause of action for this.  Federal Courts certify questions of this type to State Supreme Courts when a Federal Court is ruling on a cause which involves an issue that has not been previously addressed by the State or its Legislature.

Our Supreme Court determined Tennessee is an employment-at-will state and there has been no such cause of action created by the Legislature.  As a result, the Supreme Court was unwilling to recognize this as a cause of action.  As a side note, this does not mean she had no claim for disability discrimination under the American’s with Disabilities Act (ADA) and the Tennessee Human Rights Act (THRA).

businesslitigation

Tennessee Legislature Clarifies that Franchisee Employees Are Not To Be Deemed Employees of the Franchisor

The Tennessee legislature in Public Chapter No. 114 clarified Tennessee law on who is considered the employer of franchisee employees. This was signed into law by Governor Bill Haslam on April 10, 2015 and took effect immediately. Specifically, employees of franchisees as well as franchisees themselves will not be “deemed to be an employee of the franchisor for any purpose.” This obviously is important in several different areas of the law. It can certainly be important for numerous employment law issues including Tennessee employee discrimination or fair labor standard cases. Additionally, if employees are deemed to be employed by a franchisor, this could lead to an increased level of litigation against franchisors for claims based in premises liability or automobile liability (when a franchisee is involved in an incident or claim).

The Tennessee legislature felt it was important to clarify this issue mainly because of concerns for litigation as well as recent changes in the law on this issue at the national level.

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employmentlaw

Tennessee Passes “Employee Online Privacy Act of 2014” Preventing Employers from Obtaining Access to Personal Internet Accounts Like Facebook

The Tennessee Legislature recently passed the Employee Online Privacy Act of 2014.  This is found in 2014 Public Chapter 826.  This new statute will be found at T.C.A. § 50-1-1001 et seq. and takes effect on January 1, 2015.  This new statute basically prevents an employer from taking any adverse employment action against an employee for failure to provide access to a “personal internet account” (which basically includes any type of internet account).  “Personal internet account” is defined as follows:

(5) “Personal Internet account”:
(A) Means an online account that is used by an employee or applicant exclusively for personal communications unrelated to any business purpose of the employer; and includes any electronic medium or service where users may create, share or view content, including, emails, messages, instant messages, text messages, blogs, podcasts, photographs, videos or user-created profiles; and
(B) Does not include an account created, maintained, used, or accessed by an employee or applicant for business-related communications or for a business purpose of the employer.

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