Employer Liable for Discriminatory Adviser in Firing Supreme Court

Employers can be held liable for discriminatory conduct even if the person making the decision was not discriminatory but relied in part on those who were, the U.S. Supreme Court ruled March 1.

The court’s unanimous ruling in Vincent E. Staub v. Proctor Hospital supports what is called the “cat’s paw” theory of liability.

According to the opinion, Staub, an angiography technician at Proctor Hospital in Peoria, Illinois, was a member of the U.S. Army Reserve, which required him to attend drills one weekend per month and train full time two to three weeks a year.

Two supervisors reportedly were hostile to Staub’s military obligations, and one allegedly made a false complaint to the hospital’s vice president of human resources, who partially relied on that report to terminate his employment in 2004.

Staub sued the hospital under the Uniformed Services Employment and Reemployment Rights Act of 1994, or USERRA, alleging his discharge was motivated by hostility to his military obligations. A jury found that military status was a motivating factor in his discharge and awarded him $57,640 in damages.

However, the 7th U.S. Circuit Court of Appeals in Chicago dismissed the case, stating that a cat’s paw case “could not succeed unless the nondecision-maker exercised such ‘singular influence’ over the decision-maker that the decision to terminate was the product of ‘blind reliance,’ ” which was not the case here.

“Because the undisputed evidence established that [the HR vice president] was not wholly depending on the advice of [the supervisor], the court held that Proctor was entitled to judgment,” the 7th Circuit ruled.

However, the Supreme Court overturned the appeals court. Proctor “contends that the employer is not liable unless the de facto decision-maker … is motivated by discriminatory animus,” the high court said.

“If a supervisor performs an act motivated by anti-military 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,” the Supreme Court ruled.

The court ruled 8-0 in favor of overturning the 7th Circuit opinion, with Justices Samuel Alito Jr. and Clarence Thomas supporting a concurring opinion, and Justice Elena Kagan not taking part in the decision.

The high court remanded the case to the 7th Circuit with instructions to decide whether to reinstate the jury verdict or to order a new trial.

The Supreme Court had been expected to deal with the cat’s paw theory since 2007, when it accepted BCI Coca-Cola Bottling Co. of Los Angeles v. the Equal Employment Opportunity Commission for review. However, the case was withdrawn before it was heard.

Melinda Caterine, a Portland, Maine-based defense lawyer with Fisher & Phillips, said in addition to USERRA cases, the decision also applies to litigation under Title VII of the Civil Rights Act of 1984.

The decision will result in “claims that more than one person was involved in the decision-making” and that some of the people had discriminatory motives, said Caterine, who was not involved in the case.

While it will not necessarily lead to more litigation, it will make it easier for employees to “survive” summary judgments and could result in more trials, she said.
Caterine said although “employees are still going to have to prove that they were terminated for an unlawful reason,” it “will likely cause employers to do more thorough investigations before they terminate an employee” beyond just looking at a personnel file or an immediate supervisor’s report.

“They’re going to have to look beyond that and do an independent investigation and determine whether there is a legitimate nondiscriminatory reason” for the adverse action, Caterine said.  

Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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