On March 1, 2011, the U.S. Supreme Court issued a decision in Staub v. Proctor Hospital analyzing the so-called “cat’s paw” theory of discrimination.  Plaintiffs argue that the cat’s paw theory applies when a biased supervisor or manager influences, but does not personally make, an employment decision, and the actual decision maker is not demonstrably biased.  In the Staub decision, the Supreme Court held that employers can be held liable for cat’s paw discrimination.  Unfortunately, the decision provides little guidance on what steps employers may take to avoid cat’s paw liability.

Background

Vincent Staub was an employee of Proctor Hospital and a member of the U.S. Army Reserves.  His supervisors at Proctor allegedly expressed open hostility toward his military service.  In January 2004, Staub received a written warning for purportedly violating a company rule, which Staub argued did not exist, and that even if it did, he never violated it.  In April 2004, Staub’s co-worker reported that Staub had violated the terms of the written warning.  Staub’s supervisor reported the violation to Human Resources.  The vice president of Human Resources relied on the supervisor’s accusation, and after reviewing Staub’s personnel file, discharged Staub.  Staub challenged the discharge through Proctor’s grievance process, claiming that his supervisor fabricated the underlying corrective action out of hostility toward his military service.  Proctor did not follow up with the supervisor, but did follow through with Staub’s discharge. 

Staub filed suit under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), 38 U.S.C. § 4301 et seq., claiming that his discharge was motivated by his military service.  Staub’s contention was that his supervisor influenced the ultimate employment decision by Human Resources to discharge him.  The jury found in Staub’s favor, but the court of appeals reversed, holding that a cat’s paw case could not succeed unless the non-decision maker exercised such “singular influence” over the decision maker that the decision to terminate was the product of “blind reliance.” 

In the Supreme Court

The Supreme Court focused on the phrase “motivating factor in the employer’s action,” which is found in USERRA and other discrimination statutes, including Title VII.  Drawing upon general tort law principles, the Court held that the ultimate decision maker’s exercise of his or her own judgment does not automatically render the non-decision-making supervisor’s bias irrelevant.  That is, a supervisor’s bias could be a motivating factor in a decision, even if the decision maker’s unbiased judgment was also a motivating factor.  Specifically, the Court held that “if a supervisor performs an act motivated by discriminatory 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.” 

In the course of reaching this conclusion, the Supreme Court rejected the employer’s argument that an independent, good faith investigation by the decision maker automatically insulates the employer from liability for the supervisor’s bias.  In some circumstances, however, an independent investigation may protect the employer from liability.  Wrote the Court:

[I]f the employer’s investigation results in an adverse action for reasons unrelated to the supervisor’s original biased action . . . then the employer will not be liable.  But the supervisor’s biased report may remain a causal factor if the independent investigation takes it into account without determining that the adverse action was, apart from the supervisor’s recommendation, entirely justified.   

Applying these principles to Staub’s case, the Court held that there was evidence that Staub’s supervisor's actions were motivated by hostility towards his military obligations and were intended to cause Staub’s discharge.  There also was evidence that Staub’s supervisor's actions were causal factors underlying the decision to discharge Staub, which occurred immediately after his supervisor told Human Resources that Staub had failed to adhere to the requirements of the written warning.  Accordingly, a reasonable jury could find that the employer was liable under the cat’s paw theory.

Lessons for Employers

The Staub decision raises more questions than it answers.  While the decision affirms that employers can be liable under the cat’s paw theory, that proposition was never really in doubt. 
The more important issues for employers are how broadly the theory will be applied and what employers can do to avoid cat’s paw liability.  Staub suggests that the cat’s paw theory may apply to a broad range of non-decision maker conduct.  As for how employers avoid cat’s paw liability, the decision suggests that at least some independent investigations will prevent cat’s paw liability. 
It is not clear, however, exactly what employers must do by way of independent investigation in order to avoid liability.

Staub also serves as a timely reminder to employers that discrimination based on military service is just as unlawful as race, sex, age and other forms of illegal discrimination and can have similarly serious consequences.

© 2011 Perkins Coie LLP