Quirky Question # 145, Marital Status Discrimination

Quirky Question #145

I know you’ve written about the issue of terminating family members in other Blog posts.  And I know you recently discussed the nuances of terminating a family member in a closely held company.  We have a more vanilla issue.

Can we terminate a spouse of another employee we are terminating?  We just don’t think it would be a good idea to retain someone related to an embittered ex-employee.  Does this plan implicate anything relating to marital status?  (We are not terminating this individual because of her status as “married.”)  Your guidance would be appreciated.

Dorsey’s Analysis

You pose an interesting question., which is related to a number of questions previously addressed in this Blog.  In past analyses, we’ve explored whether terminating a spouse or family member of someone pursuing a discrimination claim could expose a company to potential liability.  We’ve also analyzed whether the termination of a spouse or family member might constitute retaliation, either against the employee already pursuing a claim or against the spouse him- or herself.

In your question, however, you have not suggested that the employee you first decided to terminate has brought any claims against the company at all.  In this context, you inquire, would it constitute “marital status” discrimination for the company to end its employment relationship with the terminated employee’s spouse.

As you likely know, there is no federal law prohibiting marital status discrimination.  Therefore, whether an employer may discharge someone because he or she is married to an employee being terminated is dependent on state law.  Some state statutory schemes, including Minnesota’s, prohibit “marital status” discrimination.  Historically, at least in Minnesota, courts limited the scope of this legal theory to contexts relating to the “status” of being married, i.e., an employer was precluded from basing a hiring or firing decision, or some other job action, on whether a person was single, married, separated or divorced.

A recent decision from the Minnesota Court of Appeals, however, has given the Minnesota prohibition on marital status discrimination a far broader interpretation.  In Taylor v. LSI Corporation of America, No. A09-1410 (April 27, 2010), Minnesota’s intermediate appellate court, the Minnesota Court of Appeals, rejected a narrow reading of the statutory proscription.

The Taylor facts were relatively straightforward.  The appellant, LeAnn Taylor, began working at LSI in 1988.  LSI was acquired in 1999 by Sagus International (Sagus).  Shortly thereafter, Sagus appointed Gary Taylor as President of its LSI subsidiary.  The following year, Gary Taylor started dating LeAnn, and the two were married in 2001.  (The appellate court suggests that LeAnn Taylor may have received some undeserved beneficial treatment at the company once her relationship with Gary Taylor commenced, but these facts really have no bearing on the narrow question examined by the appellate court.)

In 2006, Sagus’ CEO became concerned about the performance of LSI, based in part on numerous complaints by the company’s customers and suppliers.  These complaints led to a thorough assessment of LSI’s management and performance, followed by the terminations/resignations of six of LSI’s top 25 managers, including its President, Gary Taylor.

According to appellant, when the CEO accepted her husband’s resignation, he advised her husband with respect to her, “it would probably be uncomfortable or awkward for [your wife] to stay.”  Appellant further alleged that in a direct conversation with her, the CEO stated that because her husband was leaving LSI, “he probably will be [relocating], which means you’ll be relocating as well.  So we just decided to eliminate your position.”  Sagus disputed these allegations, though the CEO conceded he did ask Gary Taylor whether his wife would welcome the opportunity to resign rather than be terminated in order to “save face.”

Appellant’s employment ended in August 2006 and she sued LSI soon thereafter based on the Minnesota Human Rights Act (MHRA) § 363A.08, subd. 2 (2006), the prohibition against marital status discrimination.  The District Court granted LSI’s motion for summary judgment and LeAnn Taylor appealed.

As the Court of Appeals pointed out, the Minnesota legislature did not define “marital status” when it initially passed this statutory provision.  After the statute was enacted, the Minnesota Supreme Court has had two opportunities to analyze and apply this statutory prohibition.  In one case, the state’s high court broadly defined “marital status” and found that a company’s anti-nepotism policy violated the statute when the company precluded an employee from moving from part-time to full-time employment because she was married to another employee of the company.  (Kraft, Inc. v. State by Wilson, 284 N.W.2d 386 (Minn. 1979)).  A few years later, however, the court decided not to extend the definition of “marital status” to protect an employee from discrimination based on her spouse’s political views or associations.  (Cybyske v. Indep. Sch. Dist. No. 196, 347 N.W.2d 256 (Minn. 1984)).  The Cybyske court distinguishedKraft, stating, “the anti-nepotism policy in that case amounted to a refusal to hire a married couple, which was a ‘direct attack on the husband and wife as an entity and is contrary to the legislative judgment [that] reflects the protected status the institution of marriage enjoys in our society.’” (Quoting Kraft; citations omitted.)

Following the Cybyske decision, the Minnesota legislature amended the MHRA’s marital status provision for employment discrimination claims.  Marital status was defined to “include[ ] protection against discrimination on the basis of identity, situation, actions, or beliefs of a spouse or former spouse.”  This 1988 version of the statute had not been challenged in any case that has reached the Minnesota Supreme Court.

Although the Minnesota Court of Appeals recognized that courts in other jurisdictions had reached different conclusions on parallel factual patterns (citing to decisions from Alaska and Michigan), the court found that the statutory language in those states was not the same as the language of the MHRA.  As the court observed, “By its clear terms, Minn. Stat. § 363A.03, subd. 24, prohibits an employer from discriminating against an employee based on the identity or situation of the employee’s spouse.  The crux of appellant’s claim is that LSI terminated her based on the identity and situation of her spouse, a co-employee whose forced resignation was occurring at the same time.  This claim falls squarely within the statutory definition of “marital status.””(Emphasis added.)  The appellate court reversed the grant of summary judgment and remanded the case for further development of the record.

As the Taylor case illustrates, in Minnesota at least, an employer faces potential liability if it terminates an employee solely because it also is terminating the employee’s spouse.  If you act on your concern that it would best to discharge your employee merely because you consider it imprudent to “retain someone related to an embittered ex-employee,” you are exposing your company to a claim for marital status discrimination.

There is no need to assume that risk.  In Taylor, for example, LSI apparently thought Gary Taylor might relocate and that this would mean the end of LeAnn’s employment as well.  Rather than make assumptions, LSI should have let these events play out.  If their prognostication was correct and Gary and LeAnn Taylor relocated, the problem would have been resolved.  Similarly, if LeAnn had concluded that she did not want to work for the company that had terminated her husband, again the situation would have been resolved amicably and without litigation.

The Taylor decision adds another arrow to the employment plaintiff’s quiver.  In addition to potential claims of associational discrimination and retaliation in contexts where the first-fired spouse already is asserting claims, an unsupported or ill-conceived discharge of the other member of the couple also may implicate claims under the MHRA’ prohibition of marital status discrimination.  In short, you should move cautiously in this area.

Finally, there may be beneficial reasons to retain the non-fired spouse.  First, he or she may be a terrific employee who would be hard to replace.  Second, there may be strategic reasons for retaining the spouse of the discharged employee.  If you would like to explore some of those reasons, see, Quirky Question # 62.

Dorsey & Whitney

Dorsey is a business law firm, applying a business perspective to clients' needs. We make it our first priority to know the context in which you do business - your market, your competitors, your industry.

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