Showing posts with label board authorization. Show all posts
Showing posts with label board authorization. Show all posts

Monday, July 21, 2008

Ohio Appellate Court: National Bank Act Pre-empts Ohio Discrimination Claim, But Question Exists Whether Board Properly Terminated Plaintiff under NBA

Late last month, the Summit County Court of Appeals held that the National Bank Act pre-empted the state law gender discriminatory treatment claims of a discharged business banking officer, but not her state law retaliatory discharge claims. Boesch v. Champaign National Bank, No. 2008-Ohio-3282 (6/30/08). While the undisputed evidence showed that the plaintiff was a bank “officer” who was appointed by the bank’s board of directors, there was an evidentiary question as to whether she was discharged by the bank’s president or the board because of the manner of preparation and presentation of the board’s minutes and an amendment concerning her termination.


The Court recognized that the power granted to banks by the National Bank Act “to appoint and dismiss officers at ‘pleasure’ conflicts with the Ohio statutory provisions precluding employment discrimination and retaliation.” While the National Bank Act, 12 U.S.C. § 24 (Fifth), gives national banks the power: "[t]o elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places, " the Ohio Civil Rights Act State Act, O.R.C. § 4112.02(A), in contrast provides that “ it is an unlawful discriminatory practice: [f]or any employer, because of the race, color, religion, sex, national origin, disability, age, or ancestry of any person, to discharge without just cause, to refuse to hire, or otherwise to discriminate against that person with respect to hire, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment.” Moreover, “[w]ith respect to retaliation, state law provides that it is an unlawful discriminatory practice: [f]or any person to discriminate in any manner against any other person because that person has opposed any unlawful discriminatory practice defined in this section or because that person has made a charge, testified, assisted, or participated in any manner in any investigation, proceeding, or hearing under sections 4112.01 to 4112.07 of the Revised Code."


The court was faced with deciding whether the National Bank Act preempted state law under the constitution’s supremacy clause and recognized that the Sixth Circuit regularly recognized this preemption. Because the plaintiff had been properly hired by the bank president with authority from the bank’s board of directors and the decision was properly ratified by the bank’s board, the court found that the evidence showed that she was a bank “officer” covered by the National Banking Act. Therefore, the court concluded that her state law discrimination claims were pre-empted by federal law.


However, the Court also concluded that there was an evidentiary question as to whether her discharge was authorized and/or ratified by the bank’s board of directors. The bank’s president discharged the plaintiff and during litigation submitted an affidavit asserting “that the bank's board of directors terminated [plaintiff] and that such action is reflected in an amendment to the minutes of the meeting in which the board made that decision.” The plaintiff questioned the authenticity of the board minutes because “the amendment was undated and dealt with no other bank business . . . [and the bank] did not provide the original minutes of the board's meeting. She alleges that the amendment appears to have been created for litigation purposes and concludes that there is a question as to whether the ratification was "prompt" and appropriate under the NBA.” The Court agreed that these were valid evidentiary issues for a jury to resolve. Moreover, the court was “unable to determine from the record whether the board had delegated its authority to Lamping to terminate Boesch. . . . [raising] the issue of whether [plaintiff’s] termination was accomplished by the board of directors, or whether it was an individual action” by the bank president.


Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/9/2008/2008-ohio-3282.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.