West Virginia Expands State Discrimination Law

Recently, the Supreme Court of Appeals of West Virginia further expanded the reach of the West Virginia Human Rights Act, which prohibits employers and others from discriminating against individuals in protected categories such as race, age, gender and disability. Finding that an insurance company acting in its capacity as a provider of insurance services is a “person” subject to liability under the Act, the Court determined that even third parties can assert a cause of action for allegedly discriminatory insurance settlements. Michael v. Appalachian Heating, LLC and State Auto Company, ___ S.E.2d ___ (W.Va. 2010).

In a new syllabus point, the Court held that “the West Virginia Human Rights Act, prohibits unlawful discrimination by a tortfeasor's insurer in the settlement of a property damage claim when the discrimination is based upon race, religion, color, national origin, ancestry, sex, age, blindness, disability or familial status.” Noteably, the Court rejected State Auto’s argument that because the West Virginia Unfair Trade Practices Act (“UTPA”) precludes a third-party action against an insurer, the plaintiff’s sole remedy is to file an administrative complaint with the Insurance Commissioner pursuant to the UTPA, thus effectively circumventing the ban on third-party claims under West Virginia law. 

Justice McHugh filed a partial dissent, noting that the majority opinion exceeded the scope of the Act, as well as its protections. Justice Ketchum titled his strong dissent, “Unfounded Judicial Expansion of Our Law.” Despite these strong dissents, employers and those who provide services and open their premises to the public should be mindful of the Court’s expansive reading of the Act when assessing potential liability under state discrimination law.

This article was co-authored by Erin R. Stankewicz and Erica Narrish, Jackson Kelly PLLC.