Tag Archives: Uniformed Services Employment and Reemployment Rights Act

The Supreme Court Sharpens the Claws of the “Cat’s Paw” Theory

In our July 2009 newsletter, we highlighted then-recent decisions evaluating the “cat’s paw” theory of liability in discrimination cases.  Under that theory, an employer can be liable for discrimination where the supervisor who harbored discriminatory animus towards the plaintiff influenced an adverse action, but did not in fact make the ultimate decision.

In Staub v. Proctor Hospital, cited in that same issue, the plaintiff sued for discriminatory discharge in violation of USERRA, which protects members of the military.  He claimed that he was terminated due to the antimilitary animus of two supervisors.  The company contended that the termination decision was made by an individual in Human Resources who relied, in part, on information provided by the supervisors but who did not herself harbor antimilitary animus.  The plaintiff argued that Human Resources’ actions were insufficient, and that the company was liable for discrimination based on the animus of his supervisors, which led to his discharge.

While the jury agreed with the plaintiff, the Seventh Circuit did not.  Instead, the Seventh Circuit held that cat’s paw liability exists only where a non-decision making supervisor exercises “singular influence” over the decision maker, such that the discriminatory action was the product of “blind reliance.”  Because the ultimate decision maker in Staub did not rely solely upon the information of the hostile supervisors, but also investigated some of the facts relevant to the termination on her own, the court held that the employer did not violate USERRA when it discharged the plaintiff.

Last month, the Supreme Court reversed the Seventh Circuit’s ruling, finding that the plaintiff had in fact met his burden.  The Court specifically noted that the employer was 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.”  It found, therefore, that an employer is liable for USERRA-based discrimination using the cat’s paw theory where:

  • A supervisor performs an act motivated by antimilitary animus;
  • The supervisor intends for that act to cause an adverse employment action; and
  • The act is a proximate cause of the ultimate employment action.

The Supreme Court’s decision seemingly raises the bar for employers hoping to escape liability for employment decisions prompted by discriminatory animus, even when an unbiased decision maker made the final call after an impartial investigation.  Accordingly, employers should endeavor, whenever possible, to carefully investigate all of the facts and circumstances leading up to a supervisor’s request to terminate an employee, and not to take the supervisor’s version of events at face value.

Supreme Court Issues Decision Regarding “Cat’s Paw” Claims of Discrimination

In the recent case of Staub v Proctor Hospital, the United States Supreme Court addressed the so-called “cat’s paw” claim of discrimination under the Uniformed Services Employment and Reemployment Rights Act. In a cat’s paw case, the employee seeks to hold the employer liable for the discriminatory intent of a supervisor who was not the ultimate “decision maker” for the challenged adverse employment action. The Court’s holding in Staub now makes it easier for employees to establish liability in such cases where a biased supervisor has influenced someone else to take the adverse employment action. This case is sure to impact employers, as its holding potentially reaches beyond USERRA and into other types of federal discrimination cases.

Staub worked as an angiography technician for Proctor Hospital. He also served in the U.S. Army Reserve, and took leaves of absence from work in order to attend monthly drill. Staub’s immediate supervisor (Mulally), as well as Mulally’s supervisor (Korenchuk), were allegedly hostile towards Staub’s military obligations. Mulally issued Staub a corrective action for purportedly violating the hospital’s work rules regarding failure to remain in his work area whenever he was not working with a patient. The corrective action directed Staub to report to his supervisors when had no patients. A few months later, Korenchuk reported to the hospital’s vice president of human resources (Buck) that Staub had violated the corrective action by leaving the work area without notifying his supervisors. Buck relied on this report and, after reviewing Staub’s personnel file, made the decision to discharge Staub for failure to comply with the corrective action

Staub later sued the hospital in Federal court for wrongful discharge in violation of USERRA, claiming that his discharge was motivated by his obligations as a member of the Army Reserves. Significantly, that claim did not allege that the decision maker regarding his discharge (Buck) held a discriminatory motive. Instead, and pursuant to the cat’s paw theory, Staub claimed that supervisors Mulally and Korenchuk held discriminatory animus and that their actions influenced the discharge decision. The jury found in favor of Staub on this claim, but the Seventh Circuit Court of Appeals reversed. The Seventh Circuit held that since the decision maker conducted an albeit limited investigation of the facts, her decision to discharge Staub was not singularly influenced by the non-decision maker supervisors holding discriminatory animus. Staub then appealed to the Supreme Court, which reversed the appellate court’s decision.

Writing for the Court, Justice Scalia first noted that USERRA’s statutory language provides that an employer has violated the Act where an employee’s membership in the uniformed services is a “motivating factor” in the employer’s adverse employment action. Justice Scalia’s opinion pointed out that this language is similar to that found in another major Federal employment statute, Title VII of the Civil Rights Act of 1964 (which prohibits discrimination on the basis of race, color, religion, sex or national origin). The key issue for the Court was to define the term “motivating factor” within the context of a cat’s paw case where the decison maker was not motivated by discriminatory intent. 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.” Thus, the adverse employment action must be both the intended consequence of the non-decision maker’s conduct, as well as proximately caused by that conduct. The Court noted that proximate cause requires only “some direct relation” between the supervisor’s conduct and the adverse employment action. This holding apparently rejects any rule that a decision maker’s independent investigation prior to taking the adverse action automatically precludes liability for the employer. However, the Court left open the possibility that an investigation which leads to reasons unrelated to the supervisor’s biased conduct, and which would justify the adverse employment action, would allow the employer to avoid liability.

The Supreme Court’s decision in Staub will almost certainly encourage more employees to pursue “cat’s paw” litigation. Also, because of the similarity in statutory language with respect to the requirement that unlawful discrimination be a “motivating factor” for an adverse employment action, it seems likely that this decision will be applied in Title VII as well as USERRA cases. However, while the Court’s decision has made it easier for employees to advance a cat’s paw claim, employers should keep several important things in mind. First, the employee still has the burden of proving that the non-decision maker supervisor engaged in conduct motivated by discriminatory intent. Second, whenever the employer receives information which could prompt the taking of an adverse employment action, an immediate and thorough investigation should be undertaken. A decision maker must review all the facts and interview all relevant employee witnesses in order to make an informed and proper judgment as to the proper action. Lastly, employers should make sure that all supervisors are trained with respect to equal employment opportunity and anti-harassment laws, and that the employer’s policies in these areas are up to date. These steps still provide meaningful defenses to reduce the likelihood that any adverse employment action can be challenged successfully.

Fifth Circuit Rejects USERRA Hostile Work Environment Claims by Group of Continental Airlines Pilots

On March 22, 2011, the U.S. Court of Appeals for the Fifth Circuit issued its decision in Carder v. Continental Airlines, Inc., ruling that there is no cause of action for hostile work environment or harassment under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which prohibits discrimination against employees who serve in the uniformed services.  The Fifth Circuit is the first court of appeals to expressly address this issue.

Facts

Continental was sued by a group of its pilots who were also members of the Air National Guard and the Reserves. The pilots alleged that the airline had violated USERRA by subjecting them to a hostile work environment and harassment because of their military service obligations. For example, they complained that Continental managers made derisive comments to them such as:

  • “If you guys take more than three or four days a month in military leave, you’re just taking advantage of the system.”
  • “I used to be guard guy, so I know the scams you guys are running.”
  • It’s getting really difficult to hire you military guys because you’re taking so much military leave.”
  • “You need to choose between CAL and the Navy.”

The Fifth Circuit:

  • Refused to recognize a hostile work environment or harassment claim under USERRA because USERRA does not expressly provide for such claims and the language in USERRA is very different from that in other non-discrimination laws, such as Title VII of the Civil Rights Act of 1964 (Title VII) and the Americans With Disabilities Act (ADA), where hostile work environment and harassment claims have been recognized.
  • Reasoned that Title VII and the ADA prohibit discrimination against historically disadvantaged minorities with respect to the “terms, conditions, or privileges of employment.” In contrast, USERRA does not speak in terms of “conditions” of employment, but uses the more narrow language “any benefit of employment.”  Also, there is no indication that Congress considered members of the uniformed services to be a historically disadvantaged minority that needed special protection.
  • Concluded that if a service member suffers harassment to such a degree that it makes the workplace intolerable or otherwise adversely affects a benefit of employment, then the service member will have a claim against his/her employer for constructive discharge or other claim based on discrimination. Therefore, recognition of a hostile work environment or harassment claim under USERRA is unnecessary.

What This Means for Employers

  • The Fifth Circuit’s decision only has controlling effect in the states within the court’s jurisdiction – Texas, Louisiana, and Mississippi.  Federal district courts in other states, e.g., Alabama and Tennessee, contrary to the Fifth Circuit, have recognized hostile work environment claims under USERRA. These lower court decisions will continue to govern in that state until the appellate court with jurisdiction over the state or the U.S. Supreme Court issues a different ruling. Employers should be familiar with the law in their own state on this issue.
  • The Fifth Circuit’s ruling does not mean that employers have a free pass to engage in harassment of employees who serve in the military or to ignore complaints by employees of harassment because of their military service. Rather, employers must be as vigilant in preventing harassment against service members and as quick in addressing claims of harassment by service members as they are with respect to claims of harassment by female, minority, disabled or other historically disadvantaged minority employees.
  • Many employers include military service or a generic assumption of all “prohibited” factors into their harassment policies. As a result, the employer’s existing policy may continue to impose some obligations on the employers and its employees or provide grounds for discipline, unless the policy is amended by the employer.
  • The failure of an employer to prevent or promptly address hostile work environment or harassment complaints by a service member could result in employer liability for constructive discharge or other claim of discrimination under USERRA.

Staub v. Proctor Hospital—Supreme Court Creates Uncertainty for Employers When Taking Adverse Actions Against Members of a Protected Class

In Staub v. Proctor Hospital, the Supreme Court confirmed that the “cat’s paw” theory of employer liability is valid with respect to many workplace discrimination claims. Staub involved the firing of a hospital employee, allegedly in violation of the Uniformed Services Employment and Reemployment Rights Act of 1984 (USERRA). In deciding this case, the Supreme Court reversed the Seventh Circuit’s decision that found an employer is only liable for the bias of a supervisor if the decisionmaker’s action is “singularly influenced” by the biased supervisor, and held:

“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.”

Because the “motivating factor” language of USERRA closely resembles that of many other federal workplace bias laws, this decision will affect many different types of employment discrimination claims, although there is some question whether it will extend to ADEA claims, in light of the Gross v. FBL Financial Services, Inc. holding that such claims are subject to a “but for” causation standard.

Staub’s ‘Cat’s Paw’ Case

In April of 2004, Proctor Hospital’s vice president of human resources Linda Buck fired an angiography technician named Vincent E. Staub. On the day of Staub’s termination, Buck was informed by Michael Korenchuk that Staub violated a disciplinary warning he had received in January of 2004 that directed him to stay in his work area whenever he was not working with a patient. While Korenchuk alleged that Staub had left his desk without informing a supervisor, Staub contended he had left Korenchuk a voicemail indicating he was leaving his desk to go to the cafeteria. Nonetheless, Buck investigated the complaint by reviewing Staub’s personnel file and thereafter issued Staub a termination notice explaining that his discharge was a result of violating his January 2004 disciplinary warning.

Staub filed a grievance, claiming that the disciplinary warning that he supposedly violated was wrongly issued by his supervisor, Janice Mulally, who allegedly was hostile towards his military obligations as a United States military reserve. Rather than discuss this allegation with Mulally, Buck spoke with another personnel officer, after which she decided Staub’s termination should stay in effect.

Staub alleged that Mulally’s hostility began in 2000, when Mulally was placed in charge of scheduling shifts for Staub’s department. Staub gave Mulally advance notice of his military and drill obligations that occurred one weekend per month and two weeks during the summer, although Mulally continued to schedule him to create scheduling conflicts for Staub, often requiring him to use vacation days to get out of his work obligations or take on extra shifts to make up his absence. Staub also submitted evidence that Mulally and Korenchuk made derogatory comments towards the military and Staub’s associated duties, that Mulally expressed her intent to “get rid of [Staub],” and that special rules were created just for him.

Staub brought a discrimination claim pursuant to USERRA, claiming he was fired because of his military obligations. USERRA provides in relevant part:

“A person who is a member of…or has an obligation to perform service in a uniformed service shall not be denied initial employment, reemployment, retention in employment, promotion, or any benefit of employment by an employer on the basis of that membership,…or obligation…An employer shall be considered to have engaged in actions prohibited…under subsection (a), if the person’s membership…is a motivating factor in the employer’s action, unless the employer can prove that the action would have been taken in the absence of such membership.” 38 U.S.C. §4311(a), (c).

This claim was brought under a “cat’s paw” theory, alleging Proctor Hospital was liable for the animus of Staub’s supervisor, Mulally, who did not make the actual decision to fire him, but did induce Buck, the decisionmaker, to fire him based on the animosity she had towards Staub from his membership in the Army Reserves.

The term “cat’s paw” refers to Jean de la Fontaine’s “The Monkey and the Cat,” a fable that describes a devious monkey who persuades an unsuspecting cat to take chestnuts from a fire. In doing as asked, the cat burns its paws, while the monkey eats the chestnuts from the cat unscathed. Although it was the cat that was burned, the monkey induced the cat to take such action, making the cat an agent of the monkey’s devious purpose. The “cat’s paw” theory applied in the context of employment discrimination imputes liability to an employer for an adverse employment action taken by a nondiscriminating decisionmaker (the cat) that was induced into taking such action by the discrimination of another employee (the monkey).

A jury found in favor of Staub and awarded him $57,740 in damages, determining that Proctor Hospital was liable for Staub’s termination based on his supervisor’s hostility toward his military duties. On appeal, the Seventh Circuit emphasized that the “cat’s paw” theory applies only to impute a nondecisionmaker’s animosity to a decisionmaker where the nondecisionmaker had “singular influence” over the decisionmaker. The Seventh Circuit court reasoned that no reasonable jury could determine that Mulally exercised “singular influence” over Buck’s decision to terminate because Buck used other sources of information and conducted an investigation before making her investigation; thus, Mulally’s animus could not be imputed to Buck. Based on this analysis, the Seventh Circuit court reversed the trial court’s decision and remanded to enter judgment in favor of Proctor Hospital.

Supreme Court Decision

In granting certiorari, the Supreme Court addressed the question:

“In what circumstances may an employer be held liable based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision?”

Unlike the Seventh Circuit’s focus on “singular influence,” the Supreme Court focused on construing the statutory phrase “motivating factor in the employer’s action” found in the language of USERRA, specifically in the case where an “official has no discriminatory animus but is influenced by previous company action that is the product of a like animus in someone else.”

The Supreme Court decided this case based on principles of tort and agency law. Principles of tort law instruct that, for intentional torts, it is the intended consequences of an act, not simply the act, that determines the state of mind required for liability. Further, principles of agency law provide that both the “cat” and the “monkey,” if both acting within the scope of their employment, are agents of the employer and, thus, their wrongful conduct may be imputed to the employer. Importantly, tort and agency principles do not provide a safe harbor for employers that perform independent investigations, particularly where the independent investigation does not justify the adverse action without taking into account the supervisor’s discrimination motivated action.

On March 1, 2011, Justice Scalia delivered the majority opinion of the Court. Basing its opinion on these tort and agency principles, the Court held:

“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.”

The Court concluded further that the evidence suggested that a reasonable jury could have inferred that “Mulally’s and Korenchuk’s actions were motivated by hostility toward Staub’s military obligations,” and that “Mulally’s and Korenchuk’s actions were causal factors underlying Buck’s decision to fire Staub.” Thus, the Court reversed the Seventh Circuit opinion, and remanded for further proceedings to determine whether a new trial is warranted. The Court noted that to rule otherwise would have the unintended consequence of allowing employers to discriminate by simply “isolat[ing] a personnel official from an employee’s supervisors, vest[ing] the decision to take adverse actions in that official, and ask[ing] that official to review the employee’s personnel file before taking the adverse action.”

Justices Alito and Thomas concurred with the majority opinion, but argued that an employer should not be held liable where an adverse employment decision was made after a decisionmaker conducted his or her own investigation. In this case, there was no such investigation, since Buck accepted Korenchuk’s accusation of Staub “at face value,” even though there was in fact evidence that discrimination of military duties was a motivating factor. Thus, Proctor Hospital could not have been shielded from liability on this basis.

This decision is broadly perceived as a victory for employees, as it will create a greater degree of uncertainty for employers in taking adverse actions against members of a protected class. Based on this decision, only nondecisionmaker motivating factors that are too remote, contingent, or indirect will relieve employers of liability, although the Court has not provided clear guidance on how to make such a determination. Moreover, although the Court’s decision suggests that an employer’s independent investigation which results in termination “for reasons unrelated to the supervisor’s original biased report” may protect an employer from liability, the Court does not clarify to what extent, or under what conditions, an independent investigation will ultimately protect an employer. Nonetheless, while Staub makes clear that an independent investigation will not preclude liability in all instances, it does reinforce the fact that a thorough independent investigation remains a prudent employer practice.

In its decision, the Supreme Court explicitly compared USERRA to Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination on the basis of race, color, religion, sex, or national origin, where one of those factors “was a motivating factor for any employment practice, even though other factors also motivated the practice.” 42 U.S.C. §200e-2(a), (m). Thus, the ruling in Staub will be applied more broadly and include discrimination claims brought under Title VII and similar statutes, such as the ADA, which employ a “motivating factor” standard.

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Supreme Court Rules On “Cat’s Paw” Liability: Bad News for Business

Sly Bertrand and Ratto in company, sat

(The one was a monkey, the other a cat)

Co-servants and lodgers;

More mischievous codgers

Never messed from a platter, since platters were flat.

Can an employer be liable for discrimination even if the person who makes the decision in question did not discriminate? The answer, now, is “maybe.” On March 1, 2011, the Supreme Court issued its decision in Staub v. Proctor Hospital, (http://www.supremecourt.gov/opinions/10pdf/09-400.pdf ) holding that an employer may be liable for discrimination where a supervisor, motivated by some unlawful animus, performs an act that is intended to cause an adverse employment action against an employee, and the supervisor’s act is a proximate cause of the ultimate adverse employment action. This legal theory, which the Supreme Court addressed at length for the first time in Staub, is known as “cat’s paw” liability.

The concept of “cat’s paw” liability is common in the law and a source of substantial litigation. The term “cat’s paw” derives from a Jean de la Fontaine poem (partially quoted above, and which poem in turn comes from anAesop fable) about a cat who is persuaded by a monkey to steal chestnuts from a fire. The cat burns his paws, while the monkey eats all of the chestnuts. The cat, in the story, is the dupe. He is induced to do the dirty work of the monkey, who receives all of the benefit, and none of the pain. Seventh Circuit Court Judge Posner injected the term “cat’s paw” into the legal sphere in a 1990 employment discrimination decision, though, as the Supreme Court noted in Staub, the term has, at most, marginal relevance to employment law.

Until Staub, no consensus existed as to the application of the “cat’s paw” theory of liability, with courts falling into one of three categories. Some courts found employers liable for discrimination only where the discriminatory actor was the actual decision-maker or the person principally responsible for the ultimate adverse employment action. Other courts asked whether the biased reports, recommendations, or other actscaused the adverse employment action. Other courts simply considered whether a biased non-decision-maker influenced a tangible employment decision. The Supreme Court did not adopt any of these three interpretations, instead fashioning its own “cat’s paw” test in Staub.

Vincent Staub worked as an angiography technician for Proctor Hospital and currently served as a member of the U.S. Army Reserve, a position that required him to attend training one weekend per month and full time for two to three weeks per year. According to Staub, two of his supervisors were openly hostile to his military obligations, as they made several comments regarding the “strain” that Staub’s military obligations put on the department, and voiced the opinion that reservist training was a waste of taxpayers’ money.

Staub’s supervisors issued him a disciplinary warning for violating a company rule and, through a “Corrective Action,” directed Staub to report to them when he had no patients. A few months later, one of his supervisors informed the Vice President of Human Resources, Linda Buck, that Staub had violated the Corrective Action. Staub contended that the factual bases for both the Corrective Action itself and the alleged violation of the Corrective Action were false. After reviewing Staub’s personnel file, Ms. Buck decided to rely on the supervisors’ allegations and terminated Staub.

Staub sued Proctor Hospital under the Uniform Services Employment and Reemployment Rights Act (“USERRA”), which prohibits employers from discriminating against members of the uniformed services. Finding that the supervisors’ hostility to his military obligations did indeed motivate Staub’s discharge, the jury awarded Staub $57,640 in damages. The Seventh Circuit reversed, holding that, under that Circuit’s precedent, a “cat’s paw” case could not succeed unless the hostile non-decision-maker (here, the supervisors, or, the “monkeys”) exercised such a “singular influence” over the decision-maker (here, Ms. Buck, or the “cat”) that the termination was based on “blind reliance.”

The Supreme Court in turn reversed the Seventh Circuit’s decision, remanding the case to the Circuit to determine whether the case could succeed under the Supreme Court’s new interpretation of “cat’s paw” liability. Under this new interpretation, an employer may be liable for discrimination where (i) acting within the scope of employment, a supervisor performs an act motivated discriminatory animus; (ii) the supervisor intends the act to result in adverse employment action against the employee; and (iii) the act is a proximate cause of the ultimate adverse employment action.

Proximate cause requires only “’some direct relation between the injury asserted and the injurious conduct alleged,’ and excludes only those links that are’ too remote, purely contingent, or indirect.’” Because it is common for injuries to have multiple proximate causes, the decision-maker’s (Ms. Buck’s) exercise of judgment does not negate the relevance of the non-decision-makers’ (the supervisors’) discriminatory actions. An employer may escape liability only if it can show that the ultimate adverse employment action was unrelated to the original biased action.

Although Staub was decided under USERRA, the Supreme Court suggested that the framework of the decision will also influence cases brought under Title VII and any other statute that allows for employer liability where a discriminatory act is a proximate cause (not necessarily the only proximate cause) of the ultimate adverse employment action. As Justice Alito explained in his concurring opinion, employers are left wondering how they may avoid liability, considering that an employer may be held liable if it innocently takes into account adverse and discriminatory information provided by a supervisor, and perhaps even by a low-level employee.

How to Avoid Employer Liability In Light of Staub

  • Establish strong anti-discrimination policies. Train supervisors, even those without ultimate decision-making authority, on these policies, and provide procedures for employees to raise concerns about policy violations
  • Complete performance reviews on a regular basis, documenting employee performance issues that might later be cause for adverse employment action.
  • Conduct an independent investigation before taking an adverse employment action. Buck’s cursory independent investigation in Staub was not enough to avoid employer liability. Employers must ensure, to the greatest extent possible, that the investigation is thorough, and that the ultimate adverse employment action is unrelated to discriminatory biases. At minimum, discuss the situation with the affected employee before taking the adverse action and follow up on the employee’s concerns.
  • Obtain input from multiple sources before taking an adverse action.
  • When dealing with a reduction in force, record the business necessity underlying the reduction. Further, use objective criteria in determining how individual employees will be affected, and document these objective criteria along with their application to individual employees.
  • Note and take special care in cases in which an employee has conflict with a particular supervisor or manager. In this case, Straub actually challenged his discipline. In many cases, this may be enough of a red-flag to alert employers that they should consider some type of additional investigation to insulate the employer from cat’s paw liability.

In most courts, employees will now have an easier time establishing that a supervisor’s animus had the requisite causal effect under anti-discrimination statutes. Because Staub provides little guidance for employers in how to avoid liability, it is crucial that employers be aware of potential liability imputed from supervisors who may not make the ultimate decision, take precautionary steps where appropriate, and consult with legal counsel to ensure that their anti-discrimination polices and practices are sound.