Which employment laws apply to interstate compacts?

Federal is the safest bet.

The Missouri Court of Appeals recently ruled that an employee of an “interstate compact” could not bring claims against the compact under the state Human Rights Act. Instead, the Court said, the compact should have been sued under the applicable federal anti-discrimination laws.

What’s an “interstate compact”?

An interstate compact is an agreement between two or more states that often results in the formation of a government agency that administers a shared resource, such as public transportation. To ensure that the political power of individual states doesn’t interfere with federal government supremacy, the Compact Clause of the U.S. Constitution requires that Congress consent to the formation of interstate compacts.

There are currently more than 200 active interstate compacts in the United States. Of those 200, there are 22 that have 35 or more member states, and at least 30 with eight or more member states. Examples of well-known interstate compacts include the New York-New Jersey Port Authority Compact, the Washington Metro Area Transit Authority Compact, the Emergency Management Assistance Compact, and the Southern Dairy Compact.

The interstate compact at issue in the Missouri court’s decision was the St. Louis-based Bi-State Development Agency of the Missouri-Illinois Metropolitan District, also known as “Metro.” As its full name indicates, Metro provides mass public transportation for commuters and passengers in the metropolitan bi-state areas of Illinois and Missouri.

Which state’s laws, if any, apply to interstate compacts?

Generally, member states can’t enact legislation that unilaterally imposes burdens on the compact without the “concurrence” of the other member states. Most courts interpret this to mean that one member’s laws do not apply unless the other members expressly concur. However, Missouri is one of the few states that has allowed a compact to be subject to the legislation of one member – without the express concurrence of the other members – when the legislation is “complementary or parallel” to legislation of the other members.

Jordan v. Bi-State Development Agency

In 2017, an employee of Metro sued the compact under the Missouri Human Rights Act for retaliation and unlawful discrimination based on sex, disability, and race. However, at the time suit was filed, the Illinois Human Rights Act and the MHRA had different standards of proof. Simply put, the Missouri statute had a more “employee-friendly” burden of proof than the Illinois statute.

Under the Illinois statute, the plaintiff has to prove that the protected characteristic or status was a “motivating factor” in the employment actions taken. Under the Missouri statute, it had to be only a “contributing factor.” (The Missouri statute has since been amended to adopt the "motivating factor" standard.

Because of the differences in the plaintiff’s burden under the two statutes, Metro was able to get the lawsuit dismissed, and the dismissal was affirmed on appeal. The Missouri Supreme Court has declined to review the Court of Appeals decision.

Hindsight is 20/20. The plaintiff in this case could have sued Metro under federal law – Title VII and the Americans with Disabilities Act – instead of the MHRA. But could one argue that the current MHRA and IHRA are complementary or parallel? Maybe so. The best bet for plaintiffs at this point seems to be to assert both state and federal claims.

EDITOR’S NOTE: Before she joined Constangy, Katie Rhoten was one of the attorneys representing the plaintiff in the Jordan appeal.

Robin Shea has 30 years' experience in employment litigation, including Title VII and the Age Discrimination in Employment Act, the Americans with Disabilities Act (including the Amendments Act). 
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