(Published in New Hampshire Bar News, May 2011)
The United States Supreme Court issued its long awaited decision on the “cat’s paw” theory of liability on March 1, 2011. The “cat’s paw” seeks to hold employers liable for discrimination by employees who played no part in the ultimate employment decision but influenced the decision in some way. The case of Staub v. Proctor Hospital (No. 09-400) represents a significant victory for employees and is also remarkable for the fact that it was a unanimous decision by a court which has until now been sharply divided on employment issues.
Staub was employed as an angiography technician by Proctor Hospital. During his employment he was a member of the United States Army Reserve. Both his immediate supervisor and her supervisor were demonstrably hostile to Staub’s military obligations. As a member of the reserves, Staub was required to attend military training one weekend per month and two weeks during each summer. There was evidence during trial, which the jury accepted, that Staub’s supervisor showed animosity toward these obligations and that the department head made derogatory remarks about the military.
The evidence was that Staub had been counseled for such issues as poor attitude, lack of professionalism, and ability to work with others. His supervisor gave Staub disciplinary warnings which included a directive requiring him to report to her or her supervisor when his cases were completed and to get permission if he wanted to leave his work area. After receiving a report from the supervisors that Staub had violated the Corrective Action, Proctor’s vice president of human resources reviewed Staub’s personnel file and made the decision to fire him. Staub claimed that he had not violated the directive and had left a voice message with his supervisor letting her know that he was going to lunch. The VP of Human Resources never followed up to check the veracity of that statement. Staub filed a grievance, claiming that his supervisor had fabricated the allegation underlying the warning out of hostility toward his military obligations, but the VP of Human Resources adhered to her decision.
Staub sued Proctor under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which forbids an employer to deny “employment, reemployment, retention in employment, promotion, or any benefit of employment” based on a person’s “membership” in or “obligation to perform service in a uniformed service,” 38 U. S. C. §4311(a), and provides that liability is established “if the person’s membership . . . is a motivating factor in the employer’s action,” §4311(c).
Staub did not allege that the VP of HR who terminated him was motivated by hostility to his military obligations, but rather that his supervisors were, and that their actions influenced the decision to terminate him. A jury found Proctor liable and awarded Staub damages. The Seventh Circuit reversed, holding that Proctor was entitled to judgment as a matter of law because the decision maker had relied on more than the supervisor’s advice in making her decision. The Seventh Circuit had developed the “singular influence” standard to “prevent the cat’s paw theory from spiraling out of control.” (560 F.3d 647, 656 (7th Cir. 2009)). Under that standard, if a “decision maker is not wholly dependent on a single source of information, but instead conducts its own investigation into the facts relevant to the decision, the employer is not liable for an employee's submission of misinformation to the decision maker.”
The Supreme Court found that the Seventh Circuit erred in holding that Proctor was entitled to judgment as a matter of law. Both supervisors were acting within the scope of their employment when they took the actions that allegedly caused the VP of HR to fire Staub. There was also evidence that their actions were motivated by hostility toward Staub’s military obligations, and that those actions were causal factors underlying the termination decision. Finally, there was evidence that both supervisors specifically intended to cause Staub’s termination.
The Staub Court held in the end that if a supervisor performs an act motivated by discrimination that is intended by the supervisor to cause an adverse employment action, and if the act is the proximate cause of the adverse employment action, then the employer is liable under USERRA.
Of significance in the decision is that the Court did not necessarily excuse employers who undertake their own investigations of the circumstances leading to the action. There remains the potential after this case, however, that a court will not find liability if there is a truly independent investigation that shows the adverse employment action was entirely justified even without the supervisor’s recommendation. Moreover, the decision is restricted to supervisors influencing the decision maker. It is unsettled as to whether the standard articulated in Staub applies when co-workers are providing the misinformation to the decision maker.
Although this decision is specific to USERRA, the Court clearly recognized the similarity between its “motivating factor” standard and that of Title VII. This will likely lead to similar standards in all but age discrimination cases under federal law. Consequently, similar standards will apply in Title VII and ADA cases.
The Staub case follows closely on the heels of Thompson v. North American Stainless, LP which broadened the protections of Title VII’s antiretaliation provision to include third parties who are in a “zone of interests” with an employee who has complained of discrimination.
The message to employers is that they will need to evaluate carefully the practices they employ in making termination decisions and conducting investigations. Employers must be careful to look at the process leading up to each termination, including who provided input into the decision and what their motivation might be. It is critical that decision makers avoid “rubber-stamping” decisions rather than conducting independent investigations into the underlying facts and motivation.There are likely to be fewer cases decided on summary judgment and increased litigation as a result of this decision. These cases are expected to focus on the scope and conduct of investigations. Employers should focus their efforts on making certain that mid-level managers are adequately trained in management techniques, documenting performance, and anti-discrimination policies and that decision makers are armed with the skills to conduct independent and unbiased investigations into workplace disputes.
Jennifer L. Parent and Charla B. Stevens are directors in the Litigation Department and Employment Law Practice Group of McLane, Graf, Raulerson & Middleton, P.A. Jennifer serves as chair of the Employment Law Practice Group and can be reached at 628-1360 or [email protected]