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Nevada Supreme Court Affirms Exhaustion of Administrative Remedies Requirement, Puts Burden on Corporation to Prove Privilege in Defense of Defamation Claim

Volume 4, Issue 8
July 22, 2005

In late June, the Nevada Supreme Court addressed three issues of first impression: 1) whether an employee who brings discrimination claims in the district court without first presenting them to the administrative agency has failed to exhaust administrative remedies; 2) whether Nevada's anti-discrimination statute supports a claim for retaliation when a third party, not the complaining party, was the person that engaged in allegedly protected activity; and 3) whether statements made to police before criminal proceedings are commenced should be subject to an absolute privilege or only a qualified privilege.

In Pope v. Motel 6, No. 37771, 121 Nev. Adv. Op. 31 (June 23, 2005), Juanita Pope filed a complaint against her employer for wrongful termination because of her race and/or national origin, failure to promote because of race or national origin, retaliatory termination, defamation, and intentional infliction of emotional distress. Ms. Pope was originally employed by Motel 6 as a housekeeper, and later promoted to the position of head housekeeper. She was warned by the Motel 6 manager about spreading gossip to other employees. When Ms. Pope continued to say negative things about the manager and Motel 6 in general, Ms. Pope was terminated. She subsequently filed a charge of discrimination with the Nevada Equal Rights Commission ("NERC") claiming only that she was terminated because her husband, another former employee, had previously complained about sexual harassment and had filed a charge with NERC.

The Nevada Supreme Court first addressed the failure to exhaust administrative remedies issue as Ms. Pope's charge of discrimination made no reference to race or national origin discrimination and the new claims were not reasonably related to the allegations of the administrative charge. Thus, the Court held that "an employee who brings unrelated claims in the district court without first presenting them to NERC has failed to exhaust her administrative remedies."

With respect to Ms. Pope's contention that she was retaliated against due to her husband's prior report of sexual harassment, the Nevada Supreme Court rejected the claim, finding that NRS 613.340(1) limits the initiation of retaliatory discrimination actions to people that have opposed unlawful employment practices or participated in state law proceedings related to the same. Ms. Pope had no involvement in her husband's sexual harassment charge and thus could not sue for retaliation.

Ms. Pope's defamation claim involved statements made by a Motel 6 manager to the police and other an area Motel 6 manager that she and her husband had stolen items from the motel. The district court concluded that the statements to the police were absolutely privileged and the statements to the area manager were privileged as an intra-corporate communication. The Nevada Supreme Court, on the other hand, held that citizens making informal complaints to police should not enjoy blanket immunity from defamation actions. Rather, the Court concluded that only a qualified privilege exists for complaints which are made in good faith. The Court also determined that Motel 6 must bear the burden of establishing that the statements made to the Motel 6 area manager were made in the regular course of the company's business, which the district court did not require. Thus, those claims were remanded to the district court for further action.

Overall, this opinion was favorable for employers, but highlights the substantial risks associated with making allegedly defamatory statements. Managers and supervisors should know that they can face personal liability for such claims in addition to creating potential liability for the company.

The full decision of the Nevada Supreme Court in Pope v. Motel 6, No. 37771, 121 Nev. Adv. Op. 31 (June 23, 2005) is available at: http://www.leg.state.nv.us/

Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.