Who Can't Be Sued for Discrimination?

Your company may be exempt from employment laws, but you can still get sued. Here's what you need to know.

There are a number of factors that make some employers immune from lawsuits. American Indian tribes are "Sovereign Nations" under the treaties they signed to give away America and be confined to reservations. As Sovereign Nations, tribal organizations are immune from most employment laws. Religious organizations are also exempt from many suits because of the First Amendment's "Establishment Clause" prohibiting the government or its employment laws from interfering with religion-based organizations. However, there are exceptions to immunity and to people's attempts to cloak themselves in the immunity.

Chiropractic clinic was not a tribal business. Even though all stock was owned by the Cherokee Nation, a chiropractic clinic was incorporated under the state laws of Oklahoma. It operated off of the reservation, contracted to serve a U.S. Army base. It was open to business for all of the service members and civilians on the base and others, overwhelmingly non-Cherokees. A fired technician filed age-discrimination and Title VII suits. The clinic moved for dismissal, claiming Sovereign immunity. The court denied the motion: A "separate legal entity" status incorporated under Oklahoma law precluded it from sharing in the Cherokee Nation's sovereign immunity. Somerbolt v. Cherokee Nation Distributors (10th Cir., 2012).

Salvation Army waived immunity when it took federal money. Many organizations have a legal or constitutional exclusion from suit, but when you take the money, you take the rules that come with the contract. Even though the Salvation Army is clearly a religious organization and immune from many employment laws, it can be sued by a rejected job applicant with a disability. It took federal money to provide social services. The Rehabilitation Act applies to all contractors who receive federal funds. Taking the money was a voluntary waiver of any immunity from suits under that act. Doe v. Salvation Army (6th Cir., 2012).

Bob Gregg, a partner in Boardman & Clark LLP, shares his roundup of diversity-related legal issues. He can be reached at rgregg@boardmanlawfirm.com.

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