Tag: Supreme Court Decisions
On March 1, 2011, the U.S. Supreme Court unanimously held in Staub v. Proctor Hospital (.pdf) that an employer can, in certain circumstances, be held liable for employment discrimination based upon the bias of a supervisor who influenced, but did not make, the ultimate employment decision. The Court struck down a narrow version of this so-called “cat’s paw” argument, under which the employer could be held liable only if the biased supervisor exerted a “singular influence” over the ultimate employment decision. Unfortunately, the Court’s decision provides little guidance for employers as to what steps they can take to avoid liability for “cat’s paw” claims.
Vincent Staub worked for Proctor Hospital as an angiography technician until his termination in 2004. During his employment, Staub was a member of the United States Army Reserve, which required him to attend drill one weekend per month and to train full-time for two to three weeks per year. According to Staub, both his supervisor, Janice Mulally, and Mulally’s supervisor, Michael Korenchuk, were hostile to these military obligations. Staub claimed that Mulally was actively seeking to get rid of him, and that Korenchuk was aware of her efforts. In January 2004, Mulally issued a disciplinary directive to Staub that required him to report to Mulally or Korenchuk when he had no patients or when the angio cases were completed. Around April 2004, Korenchuk reported to Linda Buck, Proctor’s vice president of human resources, that Staub left his desk without informing a supervisor in violation of the disciplinary directive. Buck relied on the accusation and, after reviewing Staub’s personnel file, decided to fire him.
Staub filed a grievance challenging his termination, claiming that Mulally fabricated the allegations that had resulted in the disciplinary directive because of her hostility to his military obligations. After discussing the matter with another personnel officer, and without conferring with Mulally, Buck upheld her termination decision.
Staub subsequently sued Proctor Hospital under the Uniformed Service Employment and Reemployment Rights Act of 1994 (USERRA), claiming that his discharge was motivated by hostility to his military obligations. Staub did not argue that Buck harbored any hostility to his military obligations, but that Mulally and Korenchuk’s hostility influenced Buck’s ultimate employment decision. A jury found in favor of Staub, finding that his military status was a motivating factor in the decision to discharge him. However, the Seventh Circuit Court of Appeals reversed the jury verdict, holding that Staub’s claim could not succeed unless the biased supervisor exercised such a “singular influence” over the decisionmaker that the decision to terminate was the product of “blind reliance.” Because Buck took other factors into account in making the termination decision, the Seventh Circuit held that Proctor Hospital was not liable.
The Court’s Ruling
The Supreme Court unanimously reversed the Seventh Circuit’s decision. In a majority opinion joined by six Justices, Justice Scalia wrote that the Seventh Circuit’s narrow view of the “cat’s paw” theory “would have the improbable consequence that if an employer isolates a personnel official from an employee’s supervisors, vests the decision to take adverse employment actions in that official, and asks that official to review the employee’s personnel file before taking the adverse action, then the employer will be effectively shielded from discriminatory acts and recommendations of supervisors that were designed and intended to produce the adverse action.” Thus, the Court held that “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.”
In a separate concurring opinion joined by Justices Alito and Thomas, Justice Alito wrote that an employer should not be held liable “where the officer with formal decision making responsibility, having been alerted to the possibility that adverse information may be tainted, undertakes a reasonable investigation and finds insufficient evidence to dispute the accuracy of that information.” The majority, however, declined to adopt a hard-and-fast rule that the decisionmaker’s independent investigation and rejection of the employee’s allegations of discriminatory animus shielded the employer from liability. While not foreclosing the possibility that such an investigation could shield an employer from liability, majority observed that even with such an investigation, the biased adverse action could remain a causal factor in the dismissal if the decisionmaker took the biased action into account without determining that the adverse action was, apart from the supervisor’s recommendation, entirely justified.
Insights for Employers
This case is a clear victory for plaintiffs and plaintiffs’ attorneys, particularly in jurisdictions such as the Seventh Circuit (which encompasses Illinois, Indiana and Wisconsin) that had previously adopted more limited versions of the “cat’s paw” theory. While the case addresses a claim under USERRA, the Court’s decision makes it clear that the same analysis is likely to apply under nearly all federal laws prohibiting discrimination and retaliation in employment.
In light of the Court’s opinion, it is clear that having HR or a higher-level manager review an employment decision will not necessarily absolve an employer of liability for the bias of a subordinate. Nevertheless, this case makes meaningful review of employment decisions by HR and management even more vital, as the best way to avoid a lawsuit is to ensure that supervisors’ recommendations are well-supported and that questionable actions are reversed or postponed until they can be properly supported. Further, it is now all the more important to ensure that even first-line supervisors receive effective training regarding equal employment laws and how to properly document and support employment decisions.
Article courtesy of Worklaw Network firm Franczek Radelet.