Giving claws to 'cat's paw' theory of liability

By Kimberly Atkins
The Daily Record Newswire
The U.S. Supreme Court’s ruling holding an employer liable for the anti-military bias of a supervisor — even though another supervisor made the ultimate decision to fire the plaintiff — is expected to have significant implications for employers and employees. Despite the fact that the case, Staub v. Proctor Hospital, dealt with the so-called “cat’s paw” theory of liability under the Uniformed Services Employment and Reemployment Rights Act (USERRA), its application extends expressly to Title VII actions, and could reach even more broadly.

“The intent was for the Court to set an overall legal standard on imputing liability up through a corporation in an employment discrimination case,” said Professor Michael Foreman, director of the Civil Rights Appellate Clinic at Penn State University’s Dickenson School of Law, who submitted an amicus brief in the case on the plaintiff’s behalf.

“I think the Court is trying to signal that the same type of analysis will apply in employment discrimination cases in general, whether it’s USERRA, Title VII, the ADA or [the Age Discrimination in Employment Act],” Foreman said.

That analysis holds employers responsible when a lower-level supervisor’s discriminatory animus is the “proximate cause” of an adverse employment decision, even where the ultimate decision is made by another.

“This case is so significant because it rejects that it has to be an insular incident, and it rejects that it has to be blind reliance, and it rejects that an employer can be let off the hook for merely conducting its own investigation after the fact,” said Elizabeth A. Rodgers, a partner in the Boston firm of Rodgers, Powers & Schwartz and former president of the Massachusetts chapter of the National Employment Lawyers Association.

The Court’s unanimous judgment reversed a 7th Circuit ruling that a soldier fired by a senior manager after a lower-level manager expressed bias toward the employee’s military obligations could not bring a claim. “[I]f 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,” wrote Justice Scalia.

Further, he pointed out, the relevant statutory language is almost identical to that of Title VII.

The fact that the present case did arise under USERRA could have contributed to the Court’s decision to take it up, as well as to the unanimous judgment. (Scalia wrote for six justices, with Justice Samuel Alito writing a concurrence that was joined by Justice Clarence Thomas. Justice Elena Kagan recused herself.)

“It may be that the Court was particularly offended by hostility directed towards people in the armed services,” Rodgers said.

The justices could have been swayed by the “important government interest of being able to recruit people into the reserves” and protect them from discrimination elsewhere,she added.

Gregory D. Grant, who co-chairs the Employment and Business Litigation Practice in the Potomac, Md., office of Shulman Rogers, agreed.

He noted that the ruling comes at a time when the country has been involved in “active military operations of significant stature for a lengthy period of time.”

“The Supreme Court looks for the right case to make a decision,” said Grant, who represents employers and supervisors. “This case allowed the Court to deal with this aspect of the law and wrap the flag around it, which has so much more of an impact. People won’t bat an eye” at protecting fired solders based on antimilitary bias.

The Court had two previous opportunities to consider “cat’s paw” liability under Title VII — in the 2004 case of Hill v. Lockheed Martin, and again in 2007 when it took up BCI Coca-Cola Bottling Co. v. EEOC. Both cases settled before oral arguments, leaving the issue unsettled until Staub came along.

But the Staub ruling could backfire on employees in the military, Grant cautioned. Employers who fear that their managers may resent workers with military obligations may be less likely to hire reservists or other veterans.

“It kind of cuts both ways,” Grant said.

In the wake of the decision, one thing is certain: employers who turn a blind eye to the biased motivations of lower-level supervisors could be hit with a judgment later.

“It is going to ... leave an employer exposed to far greater liability because of things that happen with lower-level supervisors,” Grant said. “[Employers] must make decisions on a factual basis instead of just rubber stamping [decisions], and they have to make mid-level and lower-level managers stand up and defend and clarify their determinations.”

Rodgers stressed that the Court took a tort-based approach to “cat’s paw” liability, meaning that employers will be held liable when the intent of one supervisor is carried out through the act of another.

“One thing causes another,” Rodgers said, paraphrasing the Court’s rationale. “If one car bumps into another car, which bumps into a third car, that [middle car] does not interfere with causation.”

Employers must carefully consider all facts, as well as the possible animus of others, in  making adverse actions, Grant said.

“If you are a decision maker, [it says] you must look at lower-managers’ and middle-managers’ reports,” Grant said. “If you sign off on them blindly, you do so at your own risk.

You’ve got to peel back the onion a little bit.”

If that seems like a heavy burden, employers should remember that being exposed to a lawsuit is much worse.

“The costs involved in dealing with these types of claims are significant,” cautioned Grant. “Even claims that have questionable or little merit — fewer will be dismissed” after Staub.