by Noelle Phillips, The State

December 10, 2004

Two state chambers of commerce are drafting legislation to protect businesses with fewer than 15 employees from a variety of discrimination lawsuits.

The drafts are a response to an S.C. Supreme Court opinion that says people who work for a business with 14 or fewer employees may bring discrimination claims against the company. Before the Oct. 18 opinion, those small businesses were protected under federal law, said Michael Carrouth, a labor attorney with Fisher & Phillips in Columbia.

Officials with the chambers say the court’s ruling has opened up these companies to lawsuits where juries could award large payouts to employees who win their suits. It also fails to establish an administrative grievance procedure for settling claims, say attorneys who are working on legislation.

“This is a really dangerous situation, according to the attorneys I’ve talked to,” said Frank Knapp, president of the S.C. Small Business Chamber of Commerce. “They’re out there at a greater risk than even a big business.”

Any legislation could potentially affect thousands of South Carolina businesses and the people who work for them. The state has 94,440 businesses that employee 19 or fewer people, according to the S.C. Employment Security Commission.

However, some argue the Supreme Court’s decision only re-enforces what was already public policy of South Carolina — no business is allowed to discriminate.

“I don’t see that it’s much of a difference other than it’s telling everybody what they already knew,” said Victoria Eslinger, a labor law attorney with Nexsen Pruett.

The Supreme Court said employees who work for businesses with 15 or more employees must follow grievance procedures already set up by federal law.

However, the court said people working for smaller businesses can bring a claim to circuit court. Discrimination claims can be made on the basis of race, age, gender, religion and disability.

Malissa Burnette, a certified specialist in employment law, said people always have been able to file racial discrimination complaints, but those who worked at smaller businesses were left out when it came to claims for other types of discrimination.

“What this Supreme Court case did was acknowledge it’s not fair to allow discrimination on these other cases just because you’re a small business,” said Burnette, a lawyer with the Columbia firm of Burnette & Leclair. “Why should you be allowed to discriminate?”

Knapp said he agrees that small businesses should not have free rein to discriminate, but he also said they should not be at risk for greater penalties than big business.

Until the General Assembly addresses the issue, small businesses are advised to think about their policies, said Ashley Abel of Jackson Lewis in Greenville. He is working with the S.C. Chamber of Commerce to address the issue.

Their proposed legislation, which is separate from the small business chamber, is not finished, so he didn’t want to comment on the particulars.

“Our guidance for small employers is you need to be aware of this and be cautious,” Abel said.

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