NABP Legal Briefs: Boards Are Employers Too

December 19, 2011 1:06 pm

By Dale J. Atkinson, JD

Originally published in the January 2012 NABP Newsletter

Sometimes lost in the regulatory issues discussed in the NABP Newsletter Legal Briefs is the fact that boards of pharmacy are employers, in addition to acting as the state agency created and empowered to regulate the practice through enforcement of the practice act. Acting as an employer, boards and executive directors/administrators must be cognizant of the legal aspects of employment decisions and the potential to be named as a defendant in litigation. Of course, issues related to immunity may come into play. Consider the following.

An employee of the Mississippi Board of Pharmacy was hired as an administrative assistant IV in 2003. Thereafter, she was promoted to administrative assistant VII. Her duties included matters customary to administrative work such as application processing, issuing licenses, filing, and telephone responsibilities. In June 2006, the executive director of the Board began interviewing candidates for the position of bureau director II. After an initial dispute over the administrative assistant’s eligibility for the position, it was determined that the employee did qualify and she applied for the position. The executive director did not interview the employee for the position, but interviewed two other applicants. Both such applicants were white, one male and one female. Eventually, the executive director offered the position to the white male candidate.

The employee (referred to as Plaintiff) filed a discrimination charge with the Equal Employment Opportunity Commission (EEOC) in July 2006. After filing the EEOC charge, the Plaintiff was demoted and was unable to take advantage of certain benefits related to “comp time” and compressed schedules. Based upon this demotion and lost benefits, the Plaintiff filed two additional charges with the EEOC alleging retaliation. In March 2008, she left the employ of the Board to work for another state agency. In April 2007, the Plaintiff filed litigation in state court in Mississippi against the Board and executive director (collectively referred to as Defendants) alleging discrimination, retaliation, and civil violations under state law, including alleged violations of the state whistleblowers laws. The Plaintiff sought punitive damages based upon these claims. The Defendants had the lawsuit removed to federal court in May 2007 and thereafter filed a motion for summary judgment. Summary judgment is a motion that alleges that there are no issues of material fact in dispute and allows a court to determine, without the need for a trial, matters of law.

After addressing when summary judgment is appropriate, the court turned its attention to the various claims of the Plaintiff. First, it is alleged that the Defendants engaged in race discrimination and retaliation under Title VII of the Civil Rights Act, which prohibits employment discrimination based upon race, color, religion, sex, and national origin. The initial legal inquiry when addressing such a complaint is whether the Board and/or executive director are deemed an “employer” as defined under Title VII. To be an employer under Title VII, the Defendant must have “fifteen or more employees” during the time period alleged in the complaint. During the time period in question, the Board had nine employees.

However, the court also addressed the issue of whether the Board members could be counted as determining the number of employees. By affidavit, it was determined that the seven Board members serve as volunteers, receive no salary, and maintain independent employment outside their service rendered to the Board. As noted by the court, jurisprudence and arguments offered by the Defendants support a finding that the Board is not an employer as defined by Title VII of the federal law. In addition, the court found that if the Board is not an employer as defined, its executive director cannot be an employer. In this conclusion, the court did outline the fact that under certain circumstances, an individual supervisor may be held liable as an “employer.” As a result, neither the Board nor the executive director were found to be an employer under Title VII.

The Plaintiff also alleged race discrimination under federal law, specifically 42 USC, Section 1981. Section 1981 prohibits race discrimination in making and enforcing private contracts. The court quickly disposed of this allegation determining that there is no private right of action under Section 1981 against a public employer. Thus, the Defendants were entitled to summary judgment on the Section 1981 claim.

Next, the Plaintiff argued for relief under 42 USC, Section 1983. Section 1983 prohibits discrimination by covered employers on the basis of race, color, religion, sex, and national origin. Again, the court noted that states and state subdivisions are protected by the Eleventh Amendment to the United States Constitution, which provides states with sovereign immunity and limits the authority of federal courts to hear lawsuits brought against state governments by its own residents, residents of another state, residents of a foreign country, and governments of a foreign country. Accordingly, the Section 1983 claim of Plaintiff against the Board was subject to summary judgment.

Further, and related to the Section 1983 claim against the executive director, the court held that the virtues of qualified immunity protect the state employee under delineated circumstances. Indeed, the Plaintiff bears the burden of overcoming the defense of qualified immunity and to do so must show a violation of a clearly established law, and show that the executive director’s conduct was not “objectively reasonable.” Citing previous precedence, the court noted that state employee acts are reasonable unless “all reasonable officials in the defendant’s circumstances would have then known that defendant’s conduct violated the United States Constitution. . .” Based upon the Plaintiff’s lack of response to this requirement in addressing the executive director’s motion for summary judgment, the court dismissed the Section 1983 claim.

The court next addressed the state law claims of outrage and intentional infliction of emotional distress. Under Mississippi law, to support a claim for intentional infliction of emotional distress the Plaintiff must show that the Defendant’s conduct was “so outrageous in character, and so extreme in degree as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.” Again, citing the lack of evidence produced by the Plaintiff, the court held the facts do not give rise to the level of outrageous conduct necessary to support the tort claims of outrage and intentional infliction of emotional distress.
Addressing the state law claim of negligent infliction of emotional distress, the court quickly ruled that such a claim was barred by the Worker’s Compensation statutes, which provide an exclusive remedy for negligence claims by employees against their employers.

Finally, regarding the state whistleblower claims, the court outlined the ap plicable law. The whistleblower statutes protect an employee from retaliation when they report improper government action to a state investigative body, which includes the Attorney General, the State Auditor, the Mississippi Ethics Commission, any district attorney in the state, and various other delineated entities in Mississippi. The whistleblower statutes do not apply to employees who do not report alleged employer misconduct to one or more of these state entities. In the current matter, the Plaintiff produced no evidence whatsoever that she reported such conduct to an identified state entity. Thus, the claims under the whistleblower statutes were also subject to summary judgment in favor of the Defendants. Based upon the dismissal of all claims, the court dismissed any notion of punitive damages and held in favor of the Defendants on its motion for summary judgment.

This case presents a tidy overview of the application of federal principles related to allegations of discrimination. Boards of pharmacy must remember that they act as employers as well as regulators of the practice of pharmacy and that personnel actions may result in allegations of wrongdoing. Board members are encouraged to ask to what degree they are involved in employment decisions and to what degree they should be involved.

Claiborne v Mississippi Board of Pharmacy, 2011 US Dist. LEXIS 93849 (US District Ct. MS 2011)