Supreme Court Affirms Employer Liability Under “Cat’s Paw” Theory

Supreme Court Affirms Employer Liability Under “Cat’s Paw” Theory
In Staub v. Proctor Hospital, 562 U.S.___ (2011) LW 691244, Case No. 09-400 (March 1, 2011), the United States Supreme Court affirmed employer liability under the “Cat’s Paw” theory,1 which attributes an intermediate supervisor’s animus toward the employee to the disciplining supervisor despite the disciplining supervisor’s lack of knowledge of the intermediate supervisor’s animus toward the disciplined employee.

The Facts
Vincent Staub was an angiography technician at Proctor Hospital and a member of the United States Army Reserve. Staub’s immediate supervisor, Mulally, and Mulally’s supervisor, Korenchuk, were hostile toward Staub because his military obligations created scheduling difficulties. As a result of this hostility, Mulally issued Staub a false “Corrective Action” disciplinary warning for purportedly violating a company rule requiring him to stay in his work area when he was not working with a patient. The Corrective Action also directed Staub to report to Mulally or Korenchuk when he had no patients and his angiography cases were complete. The Corrective Action was false because no such company rule existed. Korenchuk later informed Buck, the company’s V.P. of Human Resources, that Staub had violated the Corrective Action directive. Relying on Korenchuk’s accusations, Buck reviewed Staub’s file and then decided to fire him. The termination notice stated it was based on Staub’s failure to comply with the Corrective Action directive.

The Legal Proceedings
Staub brought suit under the Uniformed Services Employment and Reemployment Rights Act (USERRA), alleging his termination was motivated by hostility to his military obligations in violation of 38 U.S.C. § 4311. Staub did not contend Buck was hostile toward him based on his military obligations. Rather, he argued that Mulally and Korenchuk were hostile toward him and Buck based her decision to terminate his employment on their influences. In the district court, a jury found that Staub’s military status was a motivating factor in Proctor Hospital’s decision to terminate his employment.

The Seventh Circuit reversed. It observed that Staub had brought a “Cat’s Paw” case: seeking to hold
his employer liable for the unlawful animus of a supervisor who didn’t make the ultimate employment
decision. Under Seventh Circuit precedent, Cat’s Paw liability could not be established “unless the
non-decision maker exercised such ‘singular influence’ over the decision maker that the decision to
terminate was the product of ‘blind reliance.’” Because Buck had gone beyond the accusations of
Mulally and Korenchuk and had conducted a review of Staub’s personnel file, the Seventh Circuit
concluded Proctor Hospital was entitled to judgment in its favor.

The Analysis
In reversing the Seventh Circuit, the Supreme Court first noted that USERRA is very similar to Title VII,
which prohibits employment discrimination because of race, color, religion, sex, or national origin and
imposes employer liability when one of those factors is “a motivating factor” for an adverse employment
action. The Court then began its analysis with “the premises that when Congress creates a federal tort
it adopts the background of general tort law.” As the Court stated: “Intentional torts such as this, . . .
generally require that the actor intend the consequences of an act, not simply the act itself.” (Internal
quotes omitted). Moreover, the unlawful action must be a “proximate cause” of the resulting injury. However, the Court noted, there can be more than one “proximate cause.” Thus, even where the employer conducts an independent investigation that results in adverse employment action, the employer can still be liable. “. . . [T]he supervisor’s biased report may remain a causal factor if the independent investigation take it into account without determining that the adverse action was, apart from the supervisor’s recommendation, entirely justified.” “The employer is at fault because one of its agents committed an action based on discriminatory animus that was intended to cause, and in fact did cause, an adverse employment decision.”

The Holding and its Implications
Utilizing the common law tort “proximate cause” analysis, the Supreme Court concluded: “. . . 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.”

While the Court’s holding in Staub is specific to USERRA, the Court’s discussion indicates it very likely
will apply this “proximate cause” analysis to any number of federal statutory schemes under which
“Congress creates a federal tort.” In particular, the Court’s reference to the similarity between
USERRA and Title VII predicts its application to Title VII discrimination claims and other federal
discrimination statutes, such as the Age Discrimination in Employment Act and the Americans with
Disabilities Act.

Impact on Employers
Before disciplining an employee based on a recommendation from a lower level supervisor, the
supervisor who imposes the discipline should conduct an independent evaluation which is sufficiently
thorough to assure the recommendation is not based on an unlawful bias, but rather a legitimate
reason that warrants the proposed discipline.

If you have questions about the Staub decision, “Cat’s Paw” liability or liability based on the actions of
your supervisors, please feel free to contact one of our labor and employment lawyers.

The Cat’s Paw Doctrine – Liability for Supervisor Bias

A. What is it?

1. The courts have recognized a theory of liability for an employer for discrimination when the employer
relies on the comments/records/information provided by a biased subordinate supervisor when taking an
adverse employment action against an employee even when the supervisor doesn’t make the adverse
decision.

2. Applies in situations where there is no evidence that the actual decision maker was biased or
engaged in any discriminatory behavior himself or herself.

3. The term originally was coined in the case law by Judge Posner (7th Circuit) in the case of Shager v.
Upjohn, 913 F.3d 398 (7th Cir. 1990). The term “Cat’s Paw” originally comes from a fable authored by
Jean de La Fontaine and means getting someone else to unwittingly do one’s bidding.

THE CAT, THE MONKEY, AND THE CHESTNUTS

An Aesop Fable

One day a cat and a monkey sat watching some chestnuts put into the fire to roast. “How good they must be!” said the monkey. “I wish we had them. I am sure you can get some out. Your paws are so much like hands.”

The cat was much pleased at these words. She put out her paw for the chestnuts. She took one out but
burned her paw.

“How well you did that!” said the monkey. “I am sure you can get them all.”

So the poor cat pulled out the nuts one by one, burning her paw each time.

At last they were all out. Then she turned around, but only in time to see the monkey crack and eat the last of the nuts.

So the poor cat had only her burnt paw for her pains.

B. Related doctrine – “rubber stamp” theory of liability applies in situations in which the subordinate
affirmatively recommends an adverse employment action and the person or persons with authority to
implement the decision do so based on the supervisor’s recommendation without conducting an
investigation.

C. The different federal court circuits are split on their application of Cat’s Paw liability but all recognize it as a valid theory of liability.

1. The more liberal view (followed by the majority of circuits, including the 9th Circuit). Employer can
be liable for an “adverse employment action taken in reliance on factors affected by another decision
maker’s discriminatory animus.” Galdamez v. Potter, 415 F.3d 1015, 1026, fn. 9 (9th Cir. 2005).

2. The middle view – e.g. the 10th Circuit. Looks at the level of influence of the biased subordinate
supervisor. EEOC v. BCI Coca-Cola Bottling Company of Los Angeles, 450 F.3d 485 (9th Cir. 2006).
Problem with this viewpoint is the court’s look at the adequacy of the investigation or review done by the
decision maker. The court in EEOC held that merely reviewing the employee’s personnel file and prior
disciplinary record before making the adverse employment decision was “inadequate as a matter of law.”

3. Strict view – the 4th Circuit. Biased subordinate supervisor must be “principally responsible” for the
adverse employment action.

D. How to Protect Yourself Against the Cat’s Paw.

1. Don’t simply rely on what you are being told by your supervisors or simply rely on records.

2. Always conduct an independent review and investigation of allegations brought against an
employee. Investigation needs to be prompt, fair, neutral, thorough and complete – especially in
termination situations.

3. Always ask the employee for his or her side of the story before taking action.

4. Look at all the facts before taking action.

5. Get the supervisor out of the process.

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www.harrang.com

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